Employment Rates

The New York Times


September 30, 2006
Off the Charts

A Statistic That Shortens the Distance to Europe

Europe has high unemployment, brought on by tight labor laws that make it hard to fire workers and therefore discourage hiring them. The United States, on the other hand, has low unemployment thanks to its vigorous and flexible economy.

That has long been the consensus view, and it is supported by official unemployment rates, which are much lower in the United States. But there is another rate that can be considered the employment rate and that shows that the differences are narrowing, if not vanishing, for those in the prime working ages. The employment of women in Europe has been rising at an especially rapid pace.

The employment rate simply shows the percentage of a given population with jobs. Unlike the unemployment rate, which ignores those who are not seeking jobs, the employment rate is not affected by the reason people are not working.

A decade ago, in 1995, the employment rate in the United States for men aged 25 to 54 was 87.6 percent. In Europe, including the 15 countries that were then members of the European Union, the rate was 85.3 percent, a difference of 2.3 percentage points. By 2005, the United States figure had slipped and the Europe figure was up, leaving a difference of just 0.3 percentage point.

Statistics released by the Organization for Economic Cooperation and Development, as compiled by the Center for Economic and Policy Research, show that in that age bracket European employment was higher than that of the United States in 2002 and 2003, when the American economic recovery was producing fewer jobs than it has since. The return to a higher employment rate in the United States probably does reflect the faster-growing American economy.

Among women, the percentage of workers in that age group slipped over the decade in the United States, to 72 percent from 72.2 percent, while in Europe it rose to 69.8 percent from 61.1 percent. That cut the gap from 11.1 percentage points to just 2.2 percentage points.

The accompanying charts show the differences between six major European countries and the United States. A decade ago, all of the European countries had fewer men and women working than did the United States. Now both men and women in Britain are more likely than those in the United States to have jobs, and while French men remain a little less likely to be employed, French women are more likely to have jobs.

Some of the most impressive changes have come in the countries that traditionally were least likely to provide jobs for women. In 1995, three out of five Spanish women aged 25 to 54 were not employed. By 2005, the proportions had reversed. Italy also experienced a surge in female employment.

Whether or not those changes are good is not clear from the statistics. A rise in the number of women with jobs may reflect greater opportunity, or a greater need for a second income in a family. And of course they say nothing about the quality of a job, or how well paid it is.

It should also be noted that younger and older people in Europe are still less likely than Americans to have jobs. Youth unemployment is an issue of considerable concern in some countries, and many European countries have adopted policies aimed at increasing retirement ages and removing or reducing incentives to promote early retirement.

But when it comes to those in their prime earning years, Europe and the United States are much closer than they were in terms of providing jobs for their citizens.