In these soaring Mediterranean temperatures, spare a thought for the peoples of southern Europe and consider the similarities between what is happening there – and here in Ireland.
The Mediterranean economies are large, historical countries with profound civilisations and substantial populations, but they risk becoming denuded of young people because – as in Ireland – youth unemployment is corroding the very heart of the societies and the young are leaving.
Consider some statistics on unemployment and emigration for a minute and then let us pause and think about the consequences for all societies.
Specifically, let us think about how likely is it that the Irish experience of my generation will be repeated?
By that I mean, my generation – myself included – emigrated in enormous numbers in the late 1980s and the early 1990s.
However, we came back in our thousands in the late 1990s and the early 2000s because the growth rate, driven largely by the Irish economy “catching up” technologically with the rest of Europe, created opportunities.
These opportunities were then enhanced by the arrival home of people whose skills had been boosted by their experience abroad. Ireland experienced the virtuous cycle much spoken of, but rarely actually seen, whereby emigrants returned and greatly contributed to the society they had left years earlier.
The amount of our young people in Australia hit home while watching the thousands of Irish Lions fans in Sydney and Melbourne. Will these young Irish come home, as my generation did?
And if they don’t, what are the implications for us? A similar exodus has occurred in southern Europe; what happens if they don’t come home either?
The statistics about the human impact of the recession are quite startling and made more so when we acknowledge that behind every statistic and number is a person, a family and any number of intertwined lives.
Right now, there are more Spanish people on the dole than there are citizens of Denmark. There are almost 15 million Europeans below the age of 30 not in work, education or training. Fifteen million is about the population of the highly populated Netherlands. In Italy alone, there are 2.2 million people under 30 doing nothing – that’s one in four of all Italian young people.
Like Ireland, many thousands of young people all across the Mediterranean are not hanging around, they are moving. According to the BBC: “Greek emigration to Germany jumped by more than 40pc last year. A recent study by the University of Thessaloniki found that more than 120,000 professionals, including doctors, engineers and scientists, have left Greece since the start of the crisis in 2010.”
Emigration from Italy rose by nearly a third last year to 79,000. Those aged 20 to 40 made up 44.8pc of the total, up from 28.3pc in 2011. In a new development, many of the Italians who are heading off are not from the traditional emigration hotspots of the south, but from the historically much richer north of Italy – the heartland of Italian industry, technology and design.
The situation in Spain is even more worrying. In February, a study showed that “70pc of Spaniards younger than 30 have considered moving abroad”.
Across the Iberian border, more than 2% of Portugal’s population has emigrated in the past two years. Most were young, highly educated people heading to Switzerland, Brazil or the oil-rich former Portuguese colony of Angola. Here in Ireland, during the past four years, more than 300,000 people have emigrated: 40% aged between 15 and 24.
In Ireland, you regularly hear people saying something like, “If it was not for emigration, we’d be doubly screwed because the unemployment figures would be much higher”. But this is only half the picture.
When people leave a country they take their skills and enthusiasm with them. They contribute positively to other countries and obviously they pay tax and create businesses in other countries too.
The countries that suffer from emigration end up older and less productive by definition. This can have a permanent impact on economic growth if the emigrants don’t come home.
Public pension systems all across Europe are essentially pyramid schemes. By this I mean the income of those retiring at the top of the pyramid are dependent on the amount of young workers coming in at the bottom of the pyramid. The more workers coming in and paying tax, the more money there is for the older ones who are retiring.
In order to get money for pensions, when the demographic dynamic changes for the worse, taxes will have to go up. As the rates of taxation in the periphery go up to maintain the previous commitments to the older populations and without extra tax revenue of the younger workers, the societies are left in a bind.
This wouldn’t be so bad if the government debt ratios of the countries on the periphery of Europe were small and manageable, but they are not. As we have seen over the past few years, peripheral Europe is flirting time and again with bond market and government debt crises, which have only been staved off by massive central bank intervention (implicit and actual) in the debt markets of all the afflicted countries.
As a result, the recent calm in these government debt markets has been rented not earned.
So governments can’t borrow to keep the system ticking over and as tens and hundreds of thousands of young people leave the countries of the periphery, these governments will have to make a choice between either debt service or pension and welfare provision – or of course the more obvious route of changing their currencies.
If they want to stay in the euro, keep their pensions, not default nor restructure their debts, then someone else will have to pay and that someone else is going to have to be the countries of northern Europe who themselves are recipients of the migrants.
Is it any wonder Mrs Merkel wants to avoid such a daunting choice at all costs?
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He heeee….
Hi David, Return to Ireland? That’s a hard sell let me tell you. i spent 2011-2011 in Ireland, having not lived there for 13 years, the industry I work in doesn’t exist in any meaningful way in Ireland so the next job that came along took me out of the country. I have a life where I am that would simply not be possible in Ireland, and I don’t have to face the daily grind of negativity and misery that seems to have enveloped the place. Taking a wider view, its hard to pick a place where one’s future is… Read more »
I have two younger brothers abroad (USA & NZ) and neither of them have any intention of returning to this place…..and could ya blame them…absolutely not; Even considering going again myself as present administration are the same self serving oxymorons as the previous bunch.!! New politics and methods are required but the turkeys (electorate in general) unfortunately do vote for christmas on this isle..!!
David, can you please outline some potential scenarios, which could lead to solutions. Particularly can we hear some thoughts about making those who have lost their money take their loss and also, why we are bailing out banks instead of letting bail in’s occur, so those who’s money is gone, just accept that’s life and stop putting this crisis onto everyone, including the younger generations as you describe above.
It’s zero sum game, when money is lost, it’s lost and that loss will manifest itself in one way or another, but it will manifest itself, otherwise it wouldn’t be lost.
I think young emigrants will come home as soon as there is a recession/economic difficulties with the global economy, especially in the country they emigrated to.
It would be better for them to be in Ireland (where they have family/friends and feel more at home with the culture they grew up with as kids) and unemployed than abroad and unemployed.
There’s a knock on to this story insofar as the “Herd of professionals”, so aptly put, may be accepted in the host country by their peers, ostensibly middle class. But working class(I hate that description) emigrants are never as well received amongst their peers due to perceptions of job taking and culture dilution. We were no better here in relation to the mass immigration of eastern europeans during the Great Swindle. I don’t know the figures for sure but we can’t be far off the greatest displacement of young people ever seen in history. And look what happened when huge… Read more »
This is an article that for me is getting to the nub of the matter of sustainability in an economy. It also highlights how better government policies and better run nations attract the talent while the rest wallow with lower average IQ to eventually turn into tourist destinations or locations for professionals who work remotely in pastoral idylls – migrating seasonally to maintain a pleasant climate – while giving their best to the highest bidder nation. Meanwhile in WALLOW land, the dynamics of youth unemployment derives preliminarily from risk. Risk for companies employing and training someone inexperienced and then having… Read more »
It is up to nations to develop / encourage a diverse range of industries to support people of different educational / aptitudes. Look at the US now encouraging / being promoted as a manufacturing base once again via low cost energy via shale gas & higher productivity via superior intellectual technology. US / EU competing vigorously for plane orders through Boeing / Airbus, as this sustains high end technical / engineering jobs in Germany / France, similar to supports offered to the Auto industry, as these industries provide the backbone to the associated professional services that subsequently feed of these… Read more »
Hi All, Well as the wicked witch said” be careful for what you wish for.”In this case a Federal EU.Of course people will migrate to work.All you have to look at the US for this.The average American moves eight times in their lives.States that are poor lose pouplations on a generational basis,however they do have the advantage of speaking English,something that we dont have bin the EU a national lingua franca.THAT will be a fun one to decide as well… My biggest mistake was ever coming back here eighteen years ago,but family and duty to it comes first.However,even before the… Read more »
Hi, You ask the following question “What if our brilliant young never come home” in a way which implys there would be an enormous loss to Ireland if they don’t. Your are not observing how really and truly fucked up Irish society really is in asking that question so let me explain: We (the Irish) are perfectly prepared to export our best and brightest kids to good opportunities and salaries abroad and substitute them at home with equally intelligent and well qualified DIRT CHEAP Eastern europen labour. The answer to the question is sadly nothing whatsoever a very sad reflection of… Read more »
Good examination of the obvious reality. This country is spending borrowed money plus its austerity taxes helping maintain a top tier elite and loads of sacred cows. Michael D. is lauded for his anti austerity rant while allowing his personal advisers to breach the salary cap. The Irish language soaks up much needed millions. The motto of ‘what we have we hold’is our mantra. If you’re young and mobile and have a choice of scaling the ramparts and overthrowing the gombeens or taking your chances and getting out you will take the latter. The country within 10 years will be… Read more »
It’s funny how the more ‘trivial’ things can be telling. Back in 1993 I spent some time in Germany (was going out with a German girl at the time) and being over there was a real eye – opener. They had remote control garage doors, a swimming pool in the basement, and 2 widescreen TV’s. The father drove an Audi S2 Avant, the mother a Golf GT … both brand new. These people weren’t rich, but saved their money and worked hard. The same story was replicated all over the neighbourhood. Practically everyone was driving a late – model car:… Read more »
[…] “In these soaring Mediterranean temperatures, spare a thought for the peoples of southern Europe and consider the similarities between what is happening there – and here in Ireland …” (more) […]
So David,
You accurately called out the crash (I was given the Pope’s Children in 2006), warning those who would listen.
Is there anything you would similarly warn us about, now?
Being that we are in a ponzi-banking gangster economy is it any surprise that the young and the not so young are handled by the power elites as human canon fodder.
times , they are a-changin’
Enda Kenny and his coalition government are on course to push through the protection of life in pregnancy bill, which will allow for abortions only when a woman’s life is under threat if her pregnancy continues or if she is suicidal.
http://www.guardian.co.uk/world/2013/jul/11/enda-kenny-ireland-abortion-reform-bill
An excellent and timely piece. I have been living in Sydney for 11 years (9 down on Bondi beach surprise surprise). I have had a lot of Irish friends come and also go. One thing I know for a fact Irish people want to go home, just give them an excuse. I was lucky in some respects, while I was slightly a victim of the Dotcom bubble, I wanted to travel, I wanted to see the world. I had also spent 2 years living and working in the States. Though it has been sobering to meet the more newly arrived… Read more »
DAVID – DO YOU WANT TO KNOW ABOUT OUR BRILLIANT YOUNG? ENDA WANTS TO ADD IRELAND TO THE LIST OF COUNTRIES THAT MURDER DEFENCELESS LITTLE CHILDREN WHAT AN ADVANCEMENT OF IGNORANCE. SAVITA? -> DEATH BY DELAYED INTRODUCTION OF ANTI-BIOTIC? WHY IS THERE NO INVESTIGATION INTO HOW THIS INDIAN WOMANS WATERS BROKE? WHERE IS THE INVESTIGATION FOR THE INDIAN LITTLE GIRL? SO SUICIDE? -> WHO SAYS KILL A LITTLE CHILD SO I CAN LIVE? WHAT KIND OF PERSON IS THAT? ENDA WANTS TO GIVE IN TO BLACKMAIL FROM THREATS OF VIOLENCE? WHERE IS THE STATE TO PROTECT THE RIGHTS OF THE… Read more »
Sitting in Hamburg airport heading home to Dublin. 40% time working in Dublin, 60% in Germany. It’s a short flight and reasonable, so could be a good option for anyone who can’t get full employment in Ireland. There’s plenty of work, you almost always need to have the lingo.
Just caught up on Irish news now. Mad!
http://www.ucc.ie/en/iss21/currentresearchprojects/ieichmis/
The article poses the question, “What if our brilliant young never come home?” and its answer is “Bye Bye Pensions”
Alas the Pension Ponzi Scheme is presently unfolding.
“Irish Government warned of unfolding pension ‘catastrophe” http://www.rte.ie/news/2013/0712/462089-pensions/
So, no jobs for the young, no pensions for the retired. The Money Creators Monetary Model is reaching its end game.
+ 1 Adelaide We focus too much on Money/ Bond Yields/ GDP/ Export numbers and so on. But really all of these can show amazingly positive trends in an environment of high social injustice or structural weakness…e.g. aging demographic of the working population, distribution of prefessional classes and so on which can be very worrying signs that can jump out and bite you. The key problem for me is how you measure the health of an economy. Current measures are downright misleading. For example, GDP – can increase if you have a natural disaster or if you rev up and… Read more »
“…measure the health of an economy?”
You may be interested in this engaging documentary on that very topic.
“Who’s Counting? Marilyn Waring on Sex, Lies and Global Economics”
http://www.nfb.ca/film/whos_counting/
FYI She was the youngest member of the Parliament of New Zealand at 23 and single-handily brought down the government in 1984. Her best known work “If Women Counted” is the subject of the documentary but it covers a lot more and Waring herself is worth the watch.
This is why I am optimistic. Let the youth fly and stand back…
Jack Andraka: A promising test for pancreatic cancer … from a teenager http://ted.com/talks/jack_andraka_a_promising_test_for_pancreatic_cancer_from_a_teenager.html #TED Air: http://goo.gl/2Aftm
Well David. I am impressed that you can admit to not knowing what the solution to the problems are. But not impressed that you have no answers!! We do know that the most overriding problem is debt. We know that it is endemic and far reaching. There are a few other things we know too. The primary one is that our money system is debt based and designed to enslave and impoverish. It is a fact that all fiat central bank currency is loaned into existence. Therefore 95% of all money is an IOU. We know it is created out… Read more »
It is popular, and populist in the Beppe Grillo sense, to be “flumoxed”. But there is no excuse for it. Perpetrating “flumoxification” is endearing, but as things careen to the next crash looming ahead, others seize the moment :
Bill to restore Glass-Steagall unnerves Wall St
Wall Street and London are not flummoxed at all, and see what is coming down the line at them, make no mistake about it.
This is not going to be pretty!
Bonbon..you seem to be passionate and earnest about economics. I try to be better informed if sometimes none the wiser about where we’re heading. I read everyone’s contribution with respect and interest. I’m reasonably bright about some things and not so bright about others. I’ve tried to digest this triple curve business with limited success. Can you explain in simple non-technical language and in a few short sentences what the triple curve is, and it’s relevance/importance to the ordinary Man/woman in the street? Kind Regards..
There are a lot of places one can go to. The grass is always greener on the other side of the fence. I emigrated for personal reasons rather than economic directly. Those friends of mine who stayed put did well enough by working and maintaining local roots.
Many countries are falling into fascist societies. one may well be better at home than in a foreign land. Better the Troubles you know!!
http://dollarvigilante.com/blog/2013/7/14/tdv-week-in-review-july-14-2013-police-morphing-into-domesti.html
According to the use of electricity , the US and many other countries too , are in recession. (Depression). The economies are not expanding in economic terms only in monetary terms. Can you spell stagflation yet?
Soon the monetary economy (bonds ) will follow.
Gold and Silver Markets are Looking Up Stock and Bond Markets are Looking DownMark J. Lundeen
http://www.pbs.org/wgbh/amex/duel/peopleevents/pande17.html
Alexander Hamilton’s credit runs out.