Labor Protections Hurt Young Workers In Europe

See Young, European and Broke. From the WSJ. Excerpts: 

"The towering cost of labor protections that have provided a comfortable life for Europe's baby boomers is now keeping their children from breaking in."

"The older generation benefited from decades of rock-solid job protection, union-guaranteed salary increases and the promise of a comfortable retirement. All this has allowed them to weather Europe's longest postwar crisis reasonably well.

By contrast, many younger Europeans can hope for little more than poorly paid, short-term contracts that often open a lifelong earnings gap they may never close. Employers in many countries are reluctant to hire on permanent contracts because of rigid labor rules and sky-high payroll taxes that go to funding the huge pension bill of their parents.

The breach is widening: Median income for people over 60 rose between 2008 and 2012 in nearly every European Union country, according to Eurostat; it declined for people under 25 in almost half the EU countries, including in Spain, Portugal, the U.K. and Holland."

"The employment rate of Italians under 40 fell nine percentage points since 2007, while it rose the same amount for those between 55 and 64 years, according to Eurostat."

"youth unemployment, which climbed to a new record high of 43.7% in June."

"In 1998, 20% of Italians under 25 were temporary workers. Today more than half are, according to Eurostat.

But that created a labor market split between young people and baby boomers and opened a stubborn earnings gap. Entry-level wages began dropping in Italy in the early '90s and continued to fall, according to a 2013 Bank of Italy analysis, dropping nearly 30% between 1990 and 2010 for men. Subsequent salary increases never caught up."