With the Republicans basically preparing to destroy the US economy over the debt ceiling, we might wonder what severe austerity means in human terms. For this, we can go back to 2009 and review the wonderful “achievements” of austerity in Latvia, as displayed in the video below, where an unusually extreme form of it was imposed on the population.
At one point Latvia’s unemployment rate hit 20.1% (December 2009), and by some reports was 22.9% in January 2010, the worst in the EU (it is unclear whether this is data from the Latvian State Employment Agency which provides the official registered unemployment rate, or a better estimate). In the first quarter of 2011, the unemployment rate was 16.9%, and the reported registered unemployment rate as of July 2011 was a lower but still disastrous double-digit figure of 12.4% (and that might, at any rate, be an underestimate).
GDP growth in Q1 2001 was a miserable 0.2%. All in all, a wretched result after the level of suffering that was inflicted on the country.
The export-led growth that the country has experienced in 2010–2011 could have been achieved by currency depreciation, which would have allowed a space for stimulating the domestic economy as well.
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If Latvia is exporting its unemployment, who is paying on the other side?
ReplyDeleteWhat do you mean "exporting its unemployment"?
ReplyDeleteJust keep on drinking, the keynesian cure for hangover ;) Hangover anyway? You have simply drunk too little. See, this is where austerity leads to ;)
ReplyDeleteIt's better to look at the total employment figures in Latvia, as they have huge emigration because of the austerity and joblessness. Part of the decrease in unemployment is simply workers moving abroad.
ReplyDelete//HarPe
I'll follow up with this chart:
ReplyDeletehttp://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=119.ESA.A.LV.N.1000.TOTEMP.0000.TTTT.N.P.A
2011 and 2012 are only forecasts, but they match the growth levels well. Jobs aren't being created, working age people are simply moving abroad or leaving the workforce due to age.
Now, the net emigration has been an ongoing process for some time already, but the crisis has accelerated it.
Jobs have fallen from 1.127.660 (2008) to 936.940 (2011). The projected net increase from 2010 to 2011 was something like 4.000 jobs, while the projected increase for 2010 is something along the same trajectory. The reported number of workers per job opening is around 37-1. Pathetic.
Before 2008, the working age population of Latvia was skyrocketing, after 2008 it's decreasing.
In the article:
http://www.dw-world.de/dw/article/0,,15031719,00.html
"55-year-old Ligita Snorina looks after a disabled elderly woman in the town of Martinsthal in the south-western part of Germany, and is feeling disillusioned.
"The economic situation in Latvia forces me to do a job like this. I have two Bachelor's degrees and a Master's degree in pedagogy as well and, frankly speaking, the work I do - changing the nappies for the elderly - is embarrassing to me.""
This is the result of hardcore budget balancing. It's brutal and a crime against humanity.
//HarPe