Millions of jobs were lost in the 2008 global financial crisis, and with growth slowing, the job market is looking shaky once again.
The U.S. shed 8.3 million jobs during the recession and only 43 percent of the lost jobs have been recouped in the last 34 months.
Younger workers in particular are facing the worst job prospects in recent times. The unemployment rate for young workers in the euro zone is over 22 percent; in Greece and Spain it is over 50 percent.
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With this in mind, we’ve put together a list of countries with the highest unemployment rates among the world’s 50 largest economies. The ranking is based on 2011 annual average unemployment rates from the International Labour Organization (ILO). The ILO gathered the numbers from national statistics sources.
So, which major economies around the world have the highest jobless rates?
1. South Africa
Unemployment rate: 24.7%
2011 GDP growth: 3.1%
South Africa, Africa’s largest economy, has the highest unemployment rate among the world’s 50 biggest economies. Unlike rising joblessness in Europe though, the situation in South Africa is nothing new; the country's unemployment rate has been over 20 percent since 1997.
A key factor behind South Africa’s high unemployment rate is the country’s apartheid history, which has created a black market for jobs, according to Theo Sparreboom, senior labor economist at the ILO. The country also has a well-developed social security system. "Some people can afford to look for jobs and do not necessarily take up any sort of work," Sparreboom adds.
In the first quarter of this year, the unemployment rate jumped to 25.2 percent from 23.9 percent in last quarter of 2011. While jobs were created in the manufacturing and retail sectors, construction, mining and quarrying all shed jobs. Only a fraction of the 1 million jobs lost during the recession have been recouped, and economic growth remains well below the 7 percent expansion the government says is needed to make a substantial dent in unemployment.
High unemployment has also led to rising household debt in the country, which stands at 75 percent of disposable income, according to the central bank. Those with jobs often support their extended families, paying for school fees and medical bills. Experts fear that South Africa’s debt problem will get worse as banks push into unsecured loans.
Unemployment rate: 21.6%
2011 GDP growth: 0.7%
Spain, the fourth largest economy in the euro zone, has the highest jobless rate in the euro zone.
Spain tipped into recession in mid-2008 after a property bubble burst, sending key construction and services sectors tumbling. That prompted mass layoffs and more than doubled the number of unemployed. In the first quarter of this year, unemployment grew to 21.3 percent, which is more than double the EU average. A whopping 4.9 million of its 45 million people are out of work as the unemployment rate hit a 14-year high.
The growing number of people out of work is having a major impact on domestic consumption, which in turn, is affecting Spain’s GDP. Retail sales posted their sharpest decline in more than two years in March, falling 8.6 percent year-on-year.
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Some major job cuts in 2011 included media group Prisa’s plans to shed 2,500 jobs — 18 percent of that company's workforce. The public sector saw a reduction of 32,000 in the government’s payroll in the first quarter of this year.
Unemployment rate: 17.7%
2011 GDP growth: -6.9%
Greece's recession has put more than one in five people out of work, leading to a record high unemployment rate of 21.7 percent in February after an average of 17.7 percent through 2011.
About 54 percent of those between the ages of 15 and 24 are without jobs. Overall, 1.1 million are unemployed, 42 percent higher than in February a year ago. Unemployment is highest in Greece's biggest urban centers, particularly Athens.
Greece's roughly $300 billion economy has been shrinking for a fifth consecutive year. The sharp deterioration in the labor market, added to cuts in pay and pensions as part of austerity measures has fueled anger against pro-bailout political parties, which suffered major losses in May's elections.
Because budget cuts imposed under the terms of the EU/IMF bailout have caused a wave of corporate closures and bankruptcies, life has gotten worse for many of those still working. Greece slashed its minimum monthly wage by about a fifth — it's now about $720 — to encourage hiring.
The lack of jobs and deteriorating quality of life has also had a big psychological impact. Suicide rates jumped 40 percent in the first half of 2011 compared to the same period a year earlier.
Unemployment rate: 14.4%
2011 GDP growth: 0.7%
Ireland ended 2011 with a shrinking service industry and an average unemployment rate near a 20-year high, double that of Germany, the euro zone’s leading economy.
Ireland's seasonally adjusted unemployment rate of 14.3 percent for May is a long way from the 4.5 percent recorded in 2007 before Ireland’s fiscal and banking crisis took hold. Some notable job losses include Bank of Ireland’s 1,000 job cuts. The bank, the only Irish lender to avoid nationalization after a group of North American investors came to its rescue last year, had 13,200 employees at the end of 2011, down from a peak of over 16,000 at the height of Ireland’s property boom in 2008.
High unemployment rates have prompted a steady stream of workers to return to school or to find work abroad in recent years. Only their exodus has prevented the jobless rate from jumping to the 23 percent recorded in Spain and the 18 percent in Greece.
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Workers desperate to leave the gloom of Ireland’s struggling economy have become increasingly attracted to Western Australia’s resource boom, where miners can earn as much as $150,000 a year. Ireland ranks third among countries whose nationals are being granted Australian visas for skilled migrants.
Unemployment rate: 12.7%
2011 GDP growth: -1.5%
Although unemployment in Portugal was at 12.7 percent through 2011, the rate jumped to a record high of 14.9 percent in the first quarter of this year as the country battles its deepest recession since the 1970s. Youth unemployment also rose to 36.2 percent.
Sectors that have been hit hard by the country’s debt woes include the once booming shipping industry, with Naval Shipyards — the only yard in Portugal still building new vessels — cutting its workforce to 700 people from over several thousand in the past few years.
Tough austerity measures implemented by the government in return for a $116 billion European Union/International Monetary Fund bailout package has made it difficult for Portugal to create jobs. In addition, unemployment is already above the 13.7 percent level forecast for 2012 in the bailout agreement; if it goes higher, the government willl likely have to pay more in unemployment benefits.
Click here for the full list of Countries With the Highest Unemployment Rates.