Many economists attribute Europe’s high employment rate to its welfare policies. They say as huge unemployment benefits and strong labor unions harm a company’s profits and entrepreneurship, policies supporting those should be changed. In other words, they want to turn Europe’s labor market into American style one.

A closer look, however, reveals that they are wrong. While the economy in Europe has been growing steadily, the U.S. economy has suffered a long-term slump leaving the employment rate of the critical labor group aged 25 to 54 almost same as that of Western Europe. According to OECD reports, the U.S. employment rate of the critical labor group stood at 78.3%, which is not very far above from the average 77.2% of the 15 European nations which joined the EU in its early era. The difference of 1.1% does not qualify as a rationale for European countries to overhaul its welfare system that has been around for decades. The U.S. employment rate for the male population of the critical labor group is 86.9%, higher mere 0.3% than its counterpart.

For sure, there is a huge gulf between the U.S. and Europe in terms of the employment rate for younger generation. Some may argue that European system falls behind the U.S. system on this ground, but one should note that some gaps are arising from Europe’s unique educational policy. In Western Europe, university education and sometimes trainings after that are offered at a considerably low cost or for free. Many students get subsidies from their governments to help make their living. On the other hand, college tuition in the U.S. is incredibly high that many young people have to work to pay tuitions and make their living.

There are also debates for or against European and American model regarding secondary education. But the point is that whatever others say, European countries are well aware that many young people choose to study more instead of getting jobs as their burden of educational fees is small but supports they get as a student is big. That is one of the very aims of the European welfare policy.

Claims that the European policies lead to stagnation and high unemployment are hardly held up. It is time to cast away distorted views on Europe.


Thank you for reading and your comments!
And I've got some questions.

1) What other words could replace the expression "employment rate"?
I don't want to use the same words repeatedly.

2) Do you use the term 'critical labor group'?
It means people aged 25 to 54 who are supposed to be critical in a country's workforce.

I deeply appreciate your help!!