Chapter 12 Outline |
VII. UNEMPLOYMENT IN EUROPE |
A. Impediments to Hiring |
| 1. In most European countries, minimum wages are higher than in the United States. |
| 2. Labor unions in most European countries are more powerful than those in the United States. |
| 3. The relatively high social security and other payroll taxes that European firms must pay discourage hiring. |
| 4. Because it is costly to discharge workers, firms are reluctant to replace workers. |
| 5. In many European countries, government regulations and controls make it difficult for entrepreneurs to start or expand new firms. |
B. Impediments to Accepting Employment |
| 1. Unemployment benefits in most European countries are relatively higher and can be drawn for a longer time than in the United States. |
| 2. High tax rates combined with loss of unemployment and other benefits reduces the incentive for unemployed persons to accept employment. |
C. Conclusion |
| 1. Unemployment rates in most European countries are higher than in the United States. |
| 2. To lower unemployment rates, policy-makers must reduce or eliminate impediments to hiring and accepting employment. |