Ireland’s unemployment rate, including for young people, has dropped below the eurozone average over the past year, according to Eurostat figures.
However the International Labour Organisation warns they expect it to begin increasing again after next year, largely because of economic turmoil and growing and persistent inequality.
The numbers out of work in the euro area are at their lowest since August 2012, but remain stubbornly high at 11.4%.
While Greece had the biggest decrease after Estonia and Bulgaria, just over a quarter of their workforce remains jobless — the highest percentage in the EU. They are followed by Spain at close to 28%.
These figures reflect the huge cohort of youth unemployment in both countries where more than half are without a job. They are followed by Croatia (44.8%) and Italy at 42%.
The ILO, in its world employment and social trends report for the year, warns the recovery in Europe remains uneven and fragile, with the modest growth seen last year fading generally.
Unemployment levels in Ireland will remain elevated, according to their report, dropping to 10.7% next year and increasing to 11% by 2019. They warn growing and persistent inequality and uncertain prospects for enterprise investment have made it difficult for countries to rebound from the crisis.
“If low wages lead people to consume less, and investment remains subdued, this obviously has a negative impact on growth. Income inequality, in some advanced economies, now approach levels observed among emerging economies. By contrast, the emerging economies made some progress in reducing their high levels of inequality,” said Guy Ryder, head of the ILO.
It warns income inequality will continue to widen with the richest 10% earning 30% to 40% of total income, while the poorest 10% earn between 2% and 7%. This trend has undermined trust in governments and social unrest is highest in countries where youth unemployment is high.
The figures will bring little comfort in the ongoing drive to lift growth and create jobs in the EU. While the European Commission’s investment plan is projected to create 1.3 million jobs, this will create just a small dent in the 24 million people currently out of work.
The ILO said the design of the fund is crucial. The Commission hopes to leverage around €315bn investment for research and infrastructural projects, which will create more than two million jobs by mid-2018, lowering the unemployment rate by around 1%.
However, the analysis warns, the funds must go also to the countries most in need. As an example, it cites the European Investment Bank — an integral part of the new fund — has invested more in Austria, with the lowest unemployment figures, than in Portugal — and considerably more outside the EU than in Greece.
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