Flexicurity

When asked how to help workers affected by globalization, economists often recite the stock phrase "education and retraining." But the evidence on the effectiveness of job retraining programs is mixed and it's hard to push strongly for costly job retraining programs without demonstrable benefits. One place to look for evidence of benefits from job retraining programs is Denmark. In the Danish system, workers are protected, but jobs are not. Danish workers are among the most easily laid off workers anywhere, but only one in ten workers expresses concern over job security:

For the Danish, A Job Loss Can Be Learning Experience, by Marcus Walker, WSJ: After graduating from high school, Susanne Olsen spent 10 years at the local slaughterhouse... It was arduous, unskilled work that left her ill-equipped for most other jobs. Then the slaughterhouse closed down last year, leaving 500 people without jobs... But unlike ... laid-off workers in similar circumstances elsewhere in Europe, Ms. Olsen was sure she was going to find a new job. Now she's an apprentice golf landscaper, with her salary subsidized by the state while she takes four years of training paid for by the government and her new employer...

Most of Western Europe is fighting to hold on to its traditionally strong job protections... Denmark has gone the other way. The government allows liberal hiring and firing as in the U.S. And it has imposed limits on the duration of its high unemployment benefits. But it also invests more than any other country, as a percentage of its gross domestic product, in retraining the jobless -- a combination it calls "flexicurity." Its unusual mix of the free market and big government has helped Denmark cut its unemployment rate in half, from about 10% in the early 1990s to U.S.-style levels of under 5% now. The economy has been relatively robust, growing 3.4% last year. Meanwhile, France and Germany are at or above the Danish jobless rate of a decade ago.

Even though Danes are among the most easily laid-off workers in Europe, polls show the country's workers are the most secure about their future. ... Danes change jobs more frequently than any workers in the developed world except Americans and Australians... But fewer than 10% say they're concerned about job security, compared with nearly 40% in Germany and more than 60% in Spain. Most Danes believe they can always find work... In the interim, they get security from a dole that replaces up to nine-tenths of their last wage, the highest level in Europe.

Critics say the experiment might not be easy to replicate. For one thing, Denmark is small, with just 5.4 million people. And close-knit Scandinavian countries historically have had a higher tolerance for taxes. The system isn't cheap: Denmark spends about 4.4% of its GDP every year on supporting and retraining the jobless, the most expensive labor-market policy in the world. ...

Kirsten Thomsen prepares the "bottleneck analysis" that makes Denmark's peculiar hybrid possible... Every three months, Ms. Thomsen has the ... polling firm Gallup survey employers ... on what jobs they will need in coming years, and uses the feedback to identify the next labor shortages. ... The consultants who deal directly with unemployed people use her reports in picking training courses for individuals. "In our system, we can make supply and demand match," Ms. Thomsen says.

The true test is how the system deals with low-skilled, manual laborers in declining industries. ...  Finding new work for the 500 laid off at Hjørring ... was a double challenge. Most of the workers didn't want to leave their home town. ... In addition, the meatpackers weren't qualified for new employment, says Jim Jensen, ... Despite Hjorring's spate of large-scale factory closures, new vacancies keep appearing in Denmark's flexible labor market. ... Where qualifications are lacking, the state pays for courses at vocational colleges, often sharing the cost with a new employer...

Ten months after the slaughterhouse closed, some 300 ex-workers have found new professions in addition to the 80 who got other jobs as meatpackers. Others from Hjørring are in full-time education, or chose retirement... Today, only 60 of the 500 laid-off workers from Hjørring are still on unemployment benefits.

Comments

[reason]

Wow! And it only costs 4.4% of GDP. But it saves 5% unemployment, so the net cost is significantly lower.
Of course Denmark is special, not exactly for the reasons you mentioned, but because it is physically so small. People can travel throughout the whole country in a couple of hours (at least if they are reasonably central they can).

But I think this is impressive and worth taking seriously as a model.

[save_the_rustbelt]

Ohio has more people and more land than Denmark, so I doubt this applies very well to the U.S.

In the past decade the U.U. lost( traded away) more manufacturing jobs than Denmark has people.

Those in the U.S. who sing the education and retraining chorus have yet to answer the pivital question, retraining for what?

Maybe we should just admit the truth, the elites in this country are willing to destroy a large swath of blue collar America very quickly to see their globalist dreams come true.

"Do you need a cart today?"

[save_the_rustbelt]

Free trade working for U.S., Gutierrez says

Commerce secretary concedes to Dearborn audience idea a tough sell for Mich. autoworkers.

Joel J. Smith / The Detroit News

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Gutierrez's speech pushed the White House's policy of staying the course on the economy while seeking a permanent tax cut and adding job retraining funds. go See full image

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DEARBORN -- U.S. Commerce Secretary Carlos Gutierrez stuck to the Bush administration's line that free trade policies are good for Michigan during a speech Monday in Dearborn.

The U.S. economy is the envy of the world and does not need the protectionist policies some say could help the state's sagging economy and the struggling auto industry, Gutierrez told the Detroit Economic Club.

But he conceded that position is a tough sell to the tens of thousands of workers in Michigan and elsewhere whose jobs are in jeopardy as auto companies, including General Motors Corp. and Ford Motor Co., plan to close plants and cut jobs to better compete against more efficient foreign rivals.

"It's very difficult to explain to someone who has lost a job that our economy is in great shape," Gutierrez told reporters after his speech. "I don't want to minimize anything to suggest we don't take it seriously when someone loses their job. It will be tough for those that are affected.

"What we have to do looking forward is to help people get retrained quickly and we have to continue attracting investments. That will create new jobs."...........

[a]

Great artcile: I am so glad to see the report on the Denish system. Five years ago I read about the German system: millions of low pay job vacancies with high unemployment rate and the problem reported was that unemployment benefit is higher than the salary of those jobs... I was wondering why the government did not subsidize those low pay jobs, and I thought maybe it was because it was not doable. Now I know it is doable. I think a system that subsidize low pay/starting jobs is better than a system over subsidize unemployment.

In contrast, this country (and down to state level) is too far away from Denmark, where the citizens have so much more say in how to run their country. The big problem for this country is not trade, is that the country seems to be desgined for corporations, politicans and special interest groups.

As for people who keep asking retraining for what, just google H1B jobs and you will see what kind of jobs are being taken by foreigners. And one wonders why there is a need to hire foreigners --- to be sure, the salary for these professions advertised (IT, ENGG, Medical, Accounting, Teaching) are not so appallingly low that no Americans want to take. In fact, they are well paid jobs.

If you ride subway in NYC you will see that even New York city is willing to hire foreigners as teachers and sponsor their h1b...

Each year 65,000 + 20,000 H1b (master and up degree) are given to foreigners, and the quota is only running out fast (the count starts each year in Oct, and typically by Feb or March, it is gone).

Some of them are hard to be "retrained", but training properly from high school is not even there. Last time I asked person graduated from computer science master program in Carnegie Mellon (one of the best in computer science programs in the country), out of 10 students in his class, only one American.

[anne]

Notice the spreading dispute in France involves loosening company limits on worker retention, but with no compensating provision for those workers who are not retained. The French workers too are looking to Finland and Denmark.

[Dave Meyer]

Interesting title. It reminds me of "flexploitation," the term used by Pierre Bourdieu to describe the use of competitiveness pressures and liberalised labor markets to extract concessions from workers. He's just a sociologist though.

[anne]

http://www.nytimes.com/2006/03/20/national/20blackmen.html?ex=1300510800&en=57e0d1ceebcbc209&ei=5090&partner=rssuserland&emc=rss

March 20, 2006

Plight Deepens for Black Men, Studies Warn
By ERIK ECKHOLM

BALTIMORE — Black men in the United States face a far more dire situation than is portrayed by common employment and education statistics, a flurry of new scholarly studies warn, and it has worsened in recent years even as an economic boom and a welfare overhaul have brought gains to black women and other groups.

Focusing more closely than ever on the life patterns of young black men, the new studies, by experts at Columbia, Princeton, Harvard and other institutions, show that the huge pool of poorly educated black men are becoming ever more disconnected from the mainstream society, and to a far greater degree than comparable white or Hispanic men.

Especially in the country's inner cities, the studies show, finishing high school is the exception, legal work is scarcer than ever and prison is almost routine, with incarceration rates climbing for blacks even as urban crime rates have declined.

Although the problems afflicting poor black men have been known for decades, the new data paint a more extensive and sobering picture of the challenges they face.

"There's something very different happening with young black men, and it's something we can no longer ignore," said Ronald B. Mincy, professor of social work at Columbia University and editor of "Black Males Left Behind" (Urban Institute Press, 2006).

"Over the last two decades, the economy did great," Mr. Mincy said, "and low-skilled women, helped by public policy, latched onto it. But young black men were falling farther back."

Many of the new studies go beyond the traditional approaches to looking at the plight of black men, especially when it comes to determining the scope of joblessness. For example, official unemployment rates can be misleading because they do not include those not seeking work or incarcerated.

"If you look at the numbers, the 1990's was a bad decade for young black men, even though it had the best labor market in 30 years," said Harry J. Holzer, an economist at Georgetown University and co-author, with Peter Edelman and Paul Offner, of "Reconnecting Disadvantaged Young Men" (Urban Institute Press, 2006).

In response to the worsening situation for young black men, a growing number of programs are placing as much importance on teaching life skills — like parenting, conflict resolution and character building — as they are on teaching job skills.

These were among the recent findings:

¶The share of young black men without jobs has climbed relentlessly, with only a slight pause during the economic peak of the late 1990's. In 2000, 65 percent of black male high school dropouts in their 20's were jobless — that is, unable to find work, not seeking it or incarcerated. By 2004, the share had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts. Even when high school graduates were included, half of black men in their 20's were jobless in 2004, up from 46 percent in 2000.

¶Incarceration rates climbed in the 1990's and reached historic highs in the past few years. In 1995, 16 percent of black men in their 20's who did not attend college were in jail or prison; by 2004, 21 percent were incarcerated. By their mid-30's, 6 in 10 black men who had dropped out of school had spent time in prison.

¶In the inner cities, more than half of all black men do not finish high school....

[save_the_rustbelt]

I have observed that aliens, most of them probably illegal, have taken many entry level jobs that could be taken by young blacks.

Cleaning offices at $6 an hour is not a career, but it beats unemployment.

Odds are the illegals are getting less and kicking some back to a labor boss, and likely no taxes are being paid.

And of course staying in school would help.

It is time to enforce the law in this country, even if some employers don't like it.

[anne]

Yes, helpful comments; about the relative size difference between America and Finland, I would like to see sets of local development programs experimentally implemented rather than looking to a national initiative.

[cm]

At the end of the day, any social insurance scheme can work only at the margin, that is to the extent it can be "financed" out of the "fundamental" fruits of aggregate production. Retraining and reassigning "surplus" workers requires for one thing that the new jobs are there (and not elsewhere), and that not too many workers are "relieved" at any given point in time.

[cm]

a: Germany does not as of today have minimal wage laws, but they are being discussed. The prevailing mode of operating the labor market has been that of "tariff autonomy" (from government meddling with wage levels). The effective mechanism of implementing minimal wage levels is provision of baseline welfare and unemployment benefits. That unemployment and in cases welfare pay more than many "entry-level" jobs is a feature, not a bug, under that system (effectively reducing people's urgency to take *any* job just to survive, or pay the rent).

And as long as we both don't have to consider taking one of those jobs we can conveniently discuss what is efficient for others, no? I'm making good money now, but I have lived in modest circumstances for a while, and have some experience with unemployment and living in a tough labor market in the immediate and broader family.

[Lord]

Of course Americans believe unemployment is the fault of the unemployed and believe assistance would be counterproductive.

[Winslow R.]

Mark,

I'd be interested in how economists calculate return on such a program.

From my prespective the more people working, the more 'real' wealth that is created. It sounds like some economists believe that to get people working and producing actually consumes more wealth than is eventually created.

[Mark Thoma]

I think the total amd marginal costs are fairly easy to compute, at least conceptually.

The benefits may be a bit harder. One way to get at this is to imagine a person taking two different paths, one that passes through job training programs, and one that doesn't. Then you would want to measure the incremental benefits over and above the outcome that would occur without the training. Even without retraining programs, people will find other jobs, so the benefit needs to be measured relative to this alternative. And that is where there is room for debate, in defining the (counterfactual) baseline path for the individual.

Econometrically, you could compare two groups of people, one that goes through the program, and one that doesn't, with control variables added to try to hold "all else equal" while comparing the two sets of outcomes.

[Winslow R.]

Thanks,

Mark wrote:

"Even without retraining programs, people will find other jobs, so the benefit needs to be measured relative to this alternative. And that is where there is room for debate, in defining the (counterfactual) baseline path for the individual."

My thoughts...
*If it is fair to assume a 'job' is found immediately the base line could vary from negative to positive. If the only alternative job is a drug dealer, thief, or couch potato the baseline would be a net negative contributer to real wealth.

*If a meat packer could find a different job why would they need retraining? What if 10% of meat packers were out of work at all times, though any one meat packer would work 90% of the time on average. Only 10% of meat packers need to be retrained and their 'baseline' should be zero not 90% as long as their retraining increased the employment of the other meatpackers from 90% to 100%.

Labor cannot be stored, so waiting for a job is wasted time that may as well be 'spent' in training. The 'costs' of training then are reduced to the 'cost' of the trainer. I find it difficult to believe a trainer cannot increase the output of a 'nonworker' if he is worth his salt as an educator. Most training is almost 'costless' to produce like all intellectual property, one educator should be able to multiply the output of multiple trainees.

[a]

cm, I understand that one must not be forced to take any jobs just because one is unemployed. The Danish system also allows time for the unemployed to conitnue their old career if they can find a job, hence the program goes (from http://www.um.dk/Publikationer/UM/English/Denmark/kap3/3-2.asp)
:
"Employees and the self-employed have the right to unemployment benefit after a minimum of a year's membership of an unemployment insurance fund and a minimum of 52 weeks' work within the last three years; the newly qualified have the right to daily cash benefits (82% of the full benefit) a month after the end of their training; the period during which this benefit can be given is five years, split into a period with daily cash benefit (the first two years) and an active period (the last three years); during the active period the unemployed person has the right and duty to receive job training and education. Young unemployed under 25 have the right and duty to receive job training and education after only 6 months on daily cash benefit."

Note that, in France and Germany, there is this big mis-match of available jobs and unemployment (and it is highest among young people). For majority of the people unemployed, they don't mind any jobs as long as the financial pay offs make sense (better than staying home and get unemployment benefit). In France for example, with the wave of retirement, they have problem finding skilled workers to take over the jobs, meanwhile, for unskilled workers, it takes time to train them and during the training period, the employers probably found it too costly to pay them good wages, and the low wages certainly lower the supply of labours...

Note that in the report, the Danish government actually researches on the types of jobs that would have labour shortage and prepare their people for jobs --- how many unemployed people are like you and me? Most of them just don't know what jobs they can train themselves for. The type of Danish retraining is more for people need a retraining program.

I also have highly professional friends being out of jobs, but within a year, they get back into better jobs.

I think the Danish system works wonderfully. In a way it is like the WOTC, but more substantial. And I certainly would like to know more details about it.

[cm]

a: My point was about incentives. When the government accomodates/subsidizes low-paid jobs (e.g. by grossing up worker income to above welfare level), more of them will be created. Yes, that will give people jobs, but are those jobs productive in the bigger picture? I have been hearing a lot rhetoric that executives are so highly paid because they produce so much value. Well, if those lowly jobs are lowly paid, maybe they are not productive, and hence not worthwhile? Then why is industry looking to fill them? Apparently this rhetoric doesn't cut both ways.

I have also heard how this helps people getting into the job market and move up. Pray tell, where? Most of those lowly jobs are dead-end jobs.

With subsidizing low-paid jobs, or conscripting welfare beneficiaries, there is also the danger that better-paid jobs of similar descriptions are effectively converted to lower-paid or stand-by labor. For example, when a city can send welfare recipients to clean parks or streets, it may cut down on its city employees, or reduce giving this business to cleaning companies. In effect the cleaning company will then lay off their staff, and they will clean the city for welfare. Or, by subsidizing $3/hour cleaning jobs by paying workers $3/hour extra, a cleaning company paying $5/hour may lose business to a cheaper competitor taking advantage of the new rules, or be forced to cut to $3/hour as well. This accomodates a race to the bottom.

Then we get howling about why their is consumption restraint in the population, and researchers explore "why are German consumers so miserly".

"after a minimum of a year's membership of an unemployment insurance fund and a minimum of 52 weeks' work within the last three years"

In Germany the principle it is similar, with varying parameters. I believe there is even some kind of "buffer" accounting to the effect that each X weeks of using benefits incrementally reduces remaining eligibility, but each Y weeks of work incrementally restores it. That applies for example to people like e.g. in construction who are periodically on temporary layoff.

BTW, that's one big snag for career starters (youth unemployment) and the long-term unemployed -- you have to get a first job to obtain initial eligibility.

[cm]

The job multiplier BTW works both ways too. You cut off benefits to the unemployed to "encourage" them to take cheap jobs, and suddenly you get revenue shortfalls, cost cutting, and job losses higher up in the pyramid as they have lower income, have to spend their money for going to work and canteen lunches instead of undeserved consumer goods, diss the hairdresser for the clipper, and switch to supermarket beer instead of going to the pub at night.

[Winslow R.]

cm wrote:

"For example, when a city can send welfare recipients to clean parks or streets, it may cut down on its city employees, or reduce giving this business to cleaning companies.In effect the cleaning company will then lay off their staff, and they will clean the city for welfare. "

Political solution that does not solve problem of labor oversupply? Why suggest this is what will happen? Many years ago I got a summer job helping run a summer work program for youth. No city employees were displaced and over 800 youth were placed in summer jobs in a town with a population of around 70,000. Welfare to work participants were working in parallel. Drive around any city in America and there are unlimited unmet needs.

cm wrote:

"Or, by subsidizing $3/hour cleaning jobs by paying workers $3/hour extra, a cleaning company paying $5/hour may lose business to a cheaper competitor taking advantage of the new rules, or be forced to cut to $3/hour as well. This accomodates a race to the bottom."

As long as all companies had access to the same workers the arguement does not hold water. A company that was losing an advantage by paying $5/hr could just offer the government subsidized worker $3.25/hour and lure the 'advantage' away.

cm wrote:

"The job multiplier BTW works both ways too."

I agree, this is why it is important to increase spending in times of labor surplus. To create income requires someone to spend.

[cm]

Winslow: Everything can be argued from different angles.

The unspoken assumption behind my example(s) is that under (apparent) funding constraints, there is a greater propensity to tinker with existing activities than creating new activities.

That is, the city would rather use their standy-by army of laborers to replace spending on park cleaning than meeting new needs.

To beat my old monetary drum, Germany may also face tougher budget constraints than the US -- it cannot simply print more Euros, but has to actually back goods and energy imports with exports. That leads to more (forced) credit/spending restraint at all levels, trickle-down style. This is what tempers aggregate internal demand, for the city as well as the citizens.

I admit that I'm not proposing solutions (and I hardly ever do), but what I heard so far (not just here) is not fundamentally compelling.

And as I said earlier, I presume everybody is free to meet those unmet needs that apparently nobody wants to pay for, as long as it's not us.

In the way of solutions, BTW, one thing I could imagine is taxation of non real estate assets, with a reasonable deductible. Germany used to have that, but it was scrapped.

[cm]

As opposed to the current trend towards mostly payroll and earned income taxes.

[Winslow R.]

" -- it cannot simply print more Euros, but has to actually back goods and energy imports with exports."

Maastricht Treaty allows 3% of GDP deficit...and France and Germany spend more...how is this not printing Euros?

"In the way of solutions, BTW, one thing I could imagine is taxation of non real estate assets,"

Why not real estate, ownership is simple to find?

[a]

cm, first, in the Danish program, they don't really cut-off benefit to "encourage" work. They ensure 5 years of unemployment benefit (90% of their original salary), while in the first 2 years you can "do nothing"; only after 2 years you are oblidged to training. This is way better than US unemployment benefit to say the least. I have to yet compare it with the German/France (I am asking my French and German friends, but I am sure if I google the key words, I will get the picture myself).

This website has some information on France (2 years maximum at 75% of original salary with some declining rate) :
(http://www.easyexpat.com/paris_en/work_unemployment-benefits.htm)

Second, as intrusive the program looks, one has to look at the alternative:

I have friends in France who told me, bakery shops, for example, is hard work and has low pay (to begin with): one gets up at 4am and work till 4pm... People would rather stay unemployed than start a career like that.

Let's say, you are giving people 10,000 Euro a year for unemployment benefit. And if they start working and take the bakery job for 7,000 euro a year, they would get nothing from the unempoyment benefit. So who would work for the bakery job then? Illegal immigrants. Like in the US, even with minimum wage requirement, low wage jobs are being filled, and hence US does not have problem that on one hand there is massive unemployment, on the other hand, there are lots of jobs no one cares to do, and, on the third hand (if one has any), government is paying people NOT to work.

In pure market economy, with suplus in certain labour segements, the salary can always be too low. That is why US and many countries has minimum wage to to enforce a "humane" feature in the society. And there is unemployment benefit to help people coping with bad luck. All of these is already against market rules. The question, in my opinion, is not one should or should not disrupt market, but given that the society requires intervention, and in countries like Germany with excellent unemployment benefit that seems to intervene with the market in an unproductive way, is there a better way to make the intervention less unproductive.

It is from this angle, I hailed the Danish model.

Certainly more empirical study needed to quatify the benefit/damage of this program to economics. But intuitively, it just looks wonderful.

[a]

Anne's point about the current dispute over the CPE labour law in France is an excellent point as well.

There is a high likelihood that people are over-reacting to CPE. But they have a valid point: they don't want their tradition of strong work contract and strong worker's right to be eroded.

The french is facing the problem that it is very hard for business to create jobs. It is not just minimum wage that makes some jobs unavailable (no restaurant deliver boy in Paris, because no restaurant owners can afford to may the wages to have delivery boys), but also once you hire someone you have to give him/her a permanent contract. That is discouraging hiring and job creation.

In reality, the French companies are trying their best to circumvent the laws already.

Again, the Danish program is shiting the burden of the empoyers to the society. If the society wants certain way for moral reasons, maybe this externality SHOULD be beared by society (through unemployment insurance program and funded by tax money). In fact, it is less intrusive to the market.

In contrast, recently the US congress just passed the law to weaken the pension contract. So the worker's right in US is weakened in all fronts.

says...

Winslow: Real estate is already being taxed. I meant taxation of "all assets".

[cm]

And of course the EU is printing some amount of new Euros, but not nearly as many (in relative terms) as the US prints dollars. No as much help from oil nations and Asian money sterilizers, you know.

Also Germany has been a major driver of European unification, and a major net payer into EU funds. Some of the money is "coming back" via EU-internal trade and other transfers, but in governments' accounting only what comes from taxes is there. And those have been shifting more towards earned incomes. The "rich" had their general asset taxation scrapped as I said, and influential corporations are able to extort substantial breaks to "create jobs" in one place versus another, or in order not to move them from here to there.

All the while public discourse is about "competitiveness", mostly a euphemism for lowered standards on the part of workers.

[Winslow R.]

cm wrote:

"The "rich" had their general asset taxation scrapped as I said, and influential corporations are able to extort substantial breaks to "create jobs" in one place versus another, or in order not to move them from here to there."

I agree this is a negative as it would increase wealth consolidation. I did not realize Germany had general asset taxation nor that it was scrapped. It would seem difficult to implement. A general 'inflation' tax is much easier to implement and 'collect' when the 'rich' refuse to be taxed.

[cm]

Winslow: Sparse links on the Web indicate that it was basically 1% anually on assets with an exemption of DEM120,000 (~EUR60,000) per family member, and further exemptions by asset category. Non-cash assets were subject to assessment and valuation rules.

This sounds like quite a bit, but real assets and productive assets (e.g. your residence) were discounted and/or had larger exemptions.

[cm]

And "inflation tax" cannot effectively reach those who are sitting close to the through, as they can push it on to others, "grossing up" their income by taking larger cuts. CEO compensation anybody?

[carlos9900]

Googling I find Jim Tressor here...

Here I paste a comment I left in my blog, talking about this idea of Flexicurity. (I'm from Spain, lived and worked in the US, but not doing a PhD in Denmark)

"Thanks Jim. That article you share has an interesting point of view. But I think the author it’s a little bit confused, the flexicurity concept it’s not applied in all Europe (if only). I think it’s only carried out in Scandinavia. The article, though, makes a distinction between the Northern and Southern Europe. It would also be important to notice the unemployment rates http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=teilm020&tableSelection=1&plugin=1 with f.e. Denmark 5.5% and Spain 18.1% (April 2009) In the case of Spain it’s hard to hire/fire (actually there are 2 type of contracts: permanent and temp, and temp is easy and the other quite hard, that makes 2 class workers, usually being the young the ones taking the bullet). Concerning government support for the unemployed it’s not only about giving them money, which this is done more or less all over Europe, the point of the flexicurity, is that the government will do as much as possible to find you a job. If you get money, you still have to perform some working tasks (supposed to be actively engaged looking for a job), different from Southern Europe."

[carlos9900]

typo: "not doing a PhD" correct: "now doing..."

For the Flexicurity to be implemented in the US. The goverment should take over the monster.coms and alike. They should subsidize the unions so they can offer an unemployment insurance, put the minimum wage a 20 dollar per hour, give the unemployed 90% of their salary over a year, give 11 month maternity/paternity paid leave, 6 week paid vacation, tax the people at a 60% with a sales tax of 25%... Things completely out of the mind of any American economist (and not economist:), while basically implemented in Denmark and other countries. And while the unemployment rate methodology is different, (in the U.S. the real one is higher), the latest official data show almost a double unemployment rate in the U.S. than in Denmark. Go figure...