The Demographics of the Euro Crisis

Over the past several days, the news has been heartening that Greece and Italy seem to be instituting the kinds of austerity measures necessary to bring their economies under control in the face of the huge global financial crisis. The underlying reasons for the global crisis, especially the impact on southern Europe--Greece, Italy, Spain, and Portugal, in particular--are many and varied, and are well laid out, in my opinion, in Michael Lewis's bestselling book, "Boomerang: Travels in the New Third World." But there is also a long-term underlying demographic component to the question of "why southern Europe"? And, no, it's not the aging population--all of Europe is dealing with that. Rather, the issue is the status of women. Greece, Italy and Spain have the lowest percentage of women in the labor force of all European countries, according to data from the OECD, a Paris-based think tank. They are squandering huge economic resources in the same way that Japan does. When you add to that the fact that Greece and Italy have the lowest retirement ages in Europe, the waste of human productivity is even more noteworthy. So, it is not just austerity that is required in these countries. They also need to have what amounts to a cultural revolution to bring women more fully into the labor force and to keep people in the labor force for many more years than is the current practice.