On 2nd of October 2023 the German newspaper FAZ published an article stating that the unemployment rate in the 20 eurozone countries in august 2023 was 6.4% (10.9 million people). The headline of the article is: “Unemployment rate in the euro area at record low”. This claim turns out to be mostly true.
taken from FAZ, 05 October 2023
The German newspaper FAZ has published an article saying that the unemployment rate in the eurozone countries reached a low in August 2023. The unemployment rate was 6.4%, which means that around 10.9 million people were affected by unemployment that month. This numbers accord to the Eurostat statistic about unemployment in august 2023.
The topic of unemployment has played a major role, especially since the coronavirus pandemic, and the figures have varied significantly since then. This is why we thought it is relevant to take a closer look at this topic.
How is unemployment defined?
The claim accords to the statistic of Eurostat. Eurostat is the statistical office of the European Union. Its task is to provide high-quality statistics and data on Europe. To achieve this, Eurostat works together with national statistical offices and authorities.
The statistics about the unemployment rate are compiled on a monthly basis. The data is collected for both: the 20 countries of the eurozone and the 27 countries of the European Union. As the claim relates to the eurozone, only these figures will be discussed in the factcheck.
It is also important to clarify in advance which people are included in the study by Eurostat and how unemployment is defined. Therefor Eurostat uses the definition of the International Labour Organization (ILO):
“Unemployed persons are persons aged 15 to 74 who:
- are without work;
- can start work within the next two weeks;
- and have actively looked for work during the previous four weeks.
The unemployment rate is the number of unemployed as a percentage of the labor force. The labour force is the total number of people employed plus unemployed.”
How can the Eurostat statistics figures be classified?
According to the study of Eurostat, which can beidentified as the primary source for the claim, the average unemployment rate in the eurozone in August 2023 is 6.4%.
The chart below shows that the unemployment rate in the eurozone (red graph) has fallen immensely. Since 2015, the number of unemployed people has tended to fall. With the start of the covid pandemic the figures rose rapidly again, but they still did not come close to the peak in 2013. Just as quickly as the number of unemployed people rose at the start of the pandemic, they fell again at the end of the coronavirus pandemic at the end of 2021. The numbers have been falling steadily since 2022 and reached their lowest point in 2023.
If you take a closer look at the figures, you will see that the unemployment rate of 6.4% was already reached once before in June of this year. The “record low” mentioned in the claim has therefore not been reached for the first time in percentage terms. If we look at the absolute figures, we see that 10.874 million people were unemployed in June and 10.856 million in August, i.e. 18 fewer people.
In terms of the study and the pure figures it provides, the claim coud be classified as “true”. But it is striking that the unemployment rates varied greatly between the different countries. There are only a few countries that lie around the average value of 6.4%. Rather, there are countries in which the unemployment rate is very low and then again countries in which unemployment is strikingly high.
There are many upward and downward outliers in the statistic, which is why it is difficult to generalize the unemployment rate of 6.4% in August 2023.
Why is the unemployment rate in southern European countries so much higher than in northern European countries?
The table above shows that the unemployment rates in southern European countries (e.g. Spain, Italy, Greece) in particular are comparatively high. Carsten Brzeski, chief economist at ING and a recognized expert on economic and political developments in Germany and Europe, explains this phenomenon as follows: ” This is still mainly due to the economic and euro crisis we had from 2010 to 2014. The savings strategies introduced at that time are still being felt today, particularly in southern Europe. One effect of this is that unemployment in southern Europe tends to be higher than in northern Europe”.
Furthermore, the southern countries are structurally disadvantaged, according to Brzeski. Due to industrialization over the last 30 years, the northern European countries have benefited greatly from the national economy, e.g. through engineering and car manufacturing, which is why unemployment has been kept quite low here. Southern Europe is better known for tourism and services and is rather weak in terms of industry, which means that higher unemployment can be expected.
Due to the fact that there is structurally less work in the southern European countries, it is also more difficult for young people in particular to enter working life after leaving school. This also increases the youth unemployment rate and pushes the average general unemployment rate in these countries even higher.
Nevertheless, Brzeski assumes that the gap between northern and southern Europe will continue to close. The southern European countries in particular can profit greatly from the energy transformation and create many jobs in this sector. In this context, the northern countries are structurally disadvantaged, which is why unemployment could tend to rise again in these countries.
Conclusion
In short we can say, according to Eurostat statistics, the average unemployment rate in the eurozone reached a record low in August 2023. But this record low cannot be generalized to all countries.
According to Carsten Brzeski, it can also be assumed that unemployment in Europe will rise again in the near future. This is mainly due to stagnating economic growth and demographic change in the eurozone. If you look at the Eurostat statistics on unemployment in the eurozone from September 2023, you can also see that the unemployment rate has risen again to 6.5%. Because the falling unemployment rate can only be seen as a short-term phenomenon and the differences between the various eurozone countries are so significant, we classify the claim “Unemployment rate in the eurozone at record low” as mostly true, despite the figures clearly speaking in support of the claim.
RESEARCH | ARTICLE – Nele Engelbrecht and Jonas Vogelsänger, Jade University of Applied Sciences, Germany
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