In an analysis of the impact that the crisis is having on Europe's welfare state, the NYT told readers that: "Demographics, too, are a challenge. On the one hand, workers fear that as they age, they will be at a disadvantage when competing for scarce jobs against younger, less expensive workers. Experts also fear a shortage of skilled workers, as Europe’s population ages and becomes more of a burden on budgets." Let's see, older workers fear that they won't be able to compete with younger workers for scarce jobs. So the problem is too few jobs, and too many workers. Would the situation of older workers be better if they were a relatively smaller share of the population and had more younger workers to compete against? Of course the next sentence tells us that Europe has the opposite problem when it comes to skilled workers, too few workers and too many jobs. There is one problem with this story, the ratio of the wages of highly-educated workers to the wages of less educated workers is lower in Europe than in the United States. This is not consistent with a shortage of skilled workers in Europe. The article also includes the claim that France has a 21.5 percent youth unemployment rate. It is worth noting that the main reason that the youth unemployment rate is higher in France than in the United States is that most French college students do not work, while most college students in the United States do work. (The unemployment rate is the percentage of the unemployed among the labor force, those either working or looking for work.) Approximately the same share of young people are unemployed in France and the United States.
--Dean Baker
