Challenges and Risks of Global Crisis in the European Labour Market

• Author: Georgeta Dragomir - Mariana Trandafir
• Position: Professor, PhD, Danubius University of Galati, Faculty of Economic Sciences, Romania - Associate Professor, PhD, Danubius University of Galati, Faculty of Economic Sciences, Romania
• Pages: 472-479

European Integration - Realities and Perspectives 2012

472

Challenges and Risks of Global Crisis in the European Labour Market

Georgeta Dragomir

1

, Mariana Trandafir

2

Abstract: The world enters in the year 2012 facing a stark reality, one in three workers in the labor force

is currently either unemployed or poor. According Eurostat, 24.325 million men and women in the EU-

27, of whom 16.92 5 million were in the euro area EA-17, were unemployed in January 2 012. These data

reflect acute problems in labor markets, in part created by the financial crisis and, if labor conditions

remain unfavorable for a long period, these problems could transform into a nother chronic problem. This

paper takes, according to the statistical da tabase, a comparative perspective on the labor market impact of

the actual global crisis on Romania and Europea n area. It starts from the reality that global crisis had a

significant impact on the development of unemployment in Europe countries, the rise in unemployment,

being in relation to GDP reductions, varies. In this reality, only economic a nd social policies are fair,

consistent, well-focused, efficient, which can reduce risks and keep a balanced budget and social order.

Keywords: global crisis; labor market prospects; Europe 2020

JEL Classification: E31; E52; E58

1. Introduction

From the economic crises of underproduction in agriculture (by mid XIX

th

century) to industrial

overproduction or crises centered around growth differences between countries, to exchange, bank

crisis or profiled on a simultaneity of phenomena, which succeed on large time intervals at global level

as well, all affect the labor market and fuel unemployment. The current financial crisis and recession

that has followed reflect the acute problems in labor market (Tarullo, 2011): out of a global labour

force of 3,3 billion, 200 million are unemployed and a further 900 million are living with their families

below a US$2 a day, the poverty line. (International Labour Office, 2012)

The crisis has brought new challenges, being more generalized, a persistent increase in unemployment

in advanced economies, and the targeted measures and objectives should be adjusted in relation to the

dynamics of current events. Time and time again, Europe has not found the right answers to extreme

situations, it did not know how to coordinate policies oriented towards growth and stability and it was

incapable to manage the social and economic phenomena, in order to prevent or correctly manage the

recession and unemployment. The malfunctions of labor market policies and the social protection

systems inefficiency worsened unemployment. The Member States have a good network protection

against income loss during unemployment, but there is the tendency to provide a passive income

which emphasized the long-term unemployment. The European Employment Strategy Work Force

primarily aimed at supporting Member States and social partners in their effort to modernize and adapt

to the current labor market requirements. Lisbon strategy brings a novelty in the way of approaching

the European Employment Strategy, as in the employment issues begin to be seen in regional terms,

considering that at this level there can be developed strategies and there can be found solutions that

would take into account the local peculiarities.

1

Professor, PhD, Danubius University of Galati, Faculty of Economic Sciences, R omania, Address: 3 Galati Blvd, Ga lati,

Romania, tel: +40372 361 102, fax: +40372 361 290, Corresponding author: gretadragomir@univ-danubius.ro

2

Associate Professor, PhD, Danubius University of Galati, Faculty of Economic Sciences, Romania, Address: 3 Galati Blvd,

Galati, Romania, tel: +40372 361 102, fax: +40372 361 290, e-mail: marianatrandafir@univ-danubius.ro