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Wednesday, 3 June 2015

Did Dutch PM Mark Rutte do a good job for the domestic employment, with his two Cabinets? Eurostat unemployment data tends to state: “No, he did not!”

Lars Boelen is one of my older Twitter friends and readers. He is the personification of someone who is ‘entrepreneurial, but yet green and sustainable’, an avid blogger himself and a genuine social-democrat with, in my opinion, his heart at the right spot.

A few days ago, Lars made an outcry on Twitter that during the two Dutch Cabinets  with PM Mark Rutte at the helm, the Dutch unemployment had soared to 650,000 people.

Tweet of Lars Boelen regarding the
latest populist outburst of PM Mark Rutte of The Netherlands
Screenshots courtesy of: and
Click to enlarge
Lars did so, after PM Mark Rutte himself had uttered one of his infamous platitudes, concerning 'people, who should not immediately run for their unemployment benefit after having been fired, but instead try a little harder to get a new job’ during a speech at a congress of the VVD (Dutch liberal-conservative party). 

What Mark Rutte conveniently "forgot" to say, however, is that people are obliged to register themselves at the UWV (i.e. the institution which settles the unemployment benefits in The Netherlands) as being unemployed, within 14 days after being fired. When they fail to do so, unemployed people might forfeit their entitlement to unemployment benefits. Being a hero of liberal-conservative politicians is one thing, but having a family and no unemployment benefit after becoming unemployed, is another.

Personally, I try to halt myself from being annoyed once more by the ‘populist bleating’ of the Dutch Prime Minister and therefore ignore it most of the time. Nevertheless, the complaint that my friend Lars made about the soaring Dutch unemployment during the last five years could very well be a legitimate one.

Therefore Lars' remark was definitely worth a little bit of research; especially when I learned today that my dear, former employer ING scrapped another 400-500 steady jobs at the head office in Amsterdam: people who might have been my direct colleagues in the past. 

Of course these new unemployeds in the banking industry are not to blame on PM Mark Rutte; directly or indirectly. Nevertheless, my initial question was: did both Cabinets of Mark Rutte cause some positive change with respect to unemployment in The Netherlands? Or to the contrary: did the Dutch situation deteriorate with him at the helm?!

Secondly, I wanted to compare the situation in The Netherlands with a few other, relatively successful Euro-zone countries, in order to place PM Mark Rutte’s achievements during the last five years in a European context.

The latter is the reason that I created my charts based upon the European unemployment data of Eurostat and did not use the Dutch unemployment data, as generated by the Central Bureau of Statistics.

To start with the Dutch employment and youth unemployment itself, I created two charts based upon the (youth) unemployment development during the last 9 years.

Youth unemployment in The Netherlands from 2006 - 2015
Chart created by; Ernst's Economy
Data courtesy of: Eurostat
Click to enlarge
With respect to the youth unemployment in The Netherlands, you can at least say that the situation did not deteriorate with Mark Rutte at the helm as Prime Minister. The youth unemployment rate nowadays is exactly the same as the youth unemployment rate was 5 years ago (2010), according to the Eurostat data. However, when the same question would have been asked one year ago, Rutte’s unemployment figures would have been much poorer.

I tend to believe that rather the cautious economic growth in the European Union, as well as the European attention for this devastating phenomena, helped to diminish the Dutch youth unemployment (15 – 25 years) by 3%, than the “visionary approach” of Cabinet Mark Rutte II.

And there is something more, especially with respect to the kinds of jobs that youngsters have nowadays. Where less than 15 years ago youngsters below 30 could still quite easily acquire a job with a fixed contract, this has become virtually impossible in 2015: youngsters get jobs with temporary contracts, with zero hour contracts, through a temporary employment agency or as a freelancer, but no steady jobs with open ended contracts.  

This means that the recent improvements in youth unemployment could be over in a jiffy, when economic growth in The Netherlands starts to falter. The flexible layer of working youngsters with temporary jobs or freelance jobs can be dismissed very easily, while the older workers with fixed contracts are still much harder to fire. This means that youth unemployment will probably remain quite volatile in the coming years. That is something to keep in mind very well.  

Common unemployment in The Netherlands from 2006 - 2015
Chart created by; Ernst's Economy
Data courtesy of: Eurostat
Click to enlarge
And the area where the approach of Cabinet Mark Rutte I + II definitely did not help much yet, is the common unemployment (age category 25 – 74 years). This unemployment rate soared, with almost 2.3% extra unemployment during the five years with Rutte at the helm. 

Of course, in comparison with other countries the Dutch unemployment is still very low, but one should remember that it rose by more than 50% since Rutte’s cabinets commenced in 2010: to 6.2% in 2015 from 3.9% in 2010.

To compare the achievements of The Netherlands regarding unemployment with other countries, I acquired the unemployment data of five other, quite successful Euro-zone countries: Germany, France, Finland, Belgium and Austria.

Although all these countries endured their share of economic hardship since the economic crisis started (France(!)), they are still among the strongest economies in the Euro-zone and neither belong to the PIIGS-countries, nor to the Eastern European Euro-zone members.

Youth unemployment in six strong
Euro-zone economies from 2006 - 2015
Chart created by; Ernst's Economy
Data courtesy of: Eurostat
Click to enlarge
Among these six strong economies, The Netherlands is still firmly in the Top Three of countries with the lowest youth unemployment. Slightly to my surprise, the youth unemployment in The Netherlands is much lower than in France, but also in Belgium and Finland. I must credit Mark Rutte for that.

On the other hand: where Austria and Germany managed to respectively keep youth unemployment stable or even diminish it strongly during the last 9 years, the youth unemployment in The Netherlands climbed with a considerable 6% between mid-2008 and early 2014 and is even nowadays still 3% higher than in mid-2008, when the credit crisis started.

Common unemployment in six strong
Euro-zone economies from 2006 - 2015
Chart created by; Ernst's Economy
Data courtesy of: Eurostat
Click to enlarge

Again, The Netherlands is firmly in the Top Three, when it comes to the lowest common unemployment, lagging only to Austria and Germany. Again Belgium, Finland and France are doing much, much worse.

Nevertheless, where the unemployment situation in Germany strongly improved and where it remained stable in Austria, the situation in The Netherlands deteriorated as we saw earlier on the separate chart.

So, if you ask the question whether the policies of the Cabinets Mark Rutte I + II have been successful, regarding the diminishment of (youth) unemployment during the last five years, the answer must be a firm ‘No’.

It seems that my friend Lars was right indeed, with his angry outcry against Mark Rutte!

1 comment:

  1. Sorry, but it is totally unimportant whether Rutte actually 'succeeds'. It is important whether Rutte can make the *impression* that he succeeds, and that his party is succesful.

    In the present Dutch political climate, the facts don't count. It is how you sell the facts. Or rather, some facts. Or rather, Rutte's version of some of the facts.

    Remember this is a democracy, stupid! In a democracy, the facts don't count, but *opinions* do count. No one understands this better than our prime minister, leader of the biggest political party. A party that steadfastly implemented the economical policies that led up to the present crisis. A party that has governed during 40 of the past 50 years.

    The VVD has induced an economical crisis, shifted the responsibility to 'the left', sold out the public sector, maintained >90% of mortgage subsidies, and got away with it, including the near-future flat-rate tax which they will undoubtedly implement with the help of their political friends AND enemies.

    You have to admit: from a VVD perspective, Rutte is doing a marvellous job. He is a present-day Macchiavelli.

    And that is NOT because of the facts.