JoetheInvestor's  Instablog

The young people of Greece, Ireland and now Spain are leaving their home country to look for work abroad because there is nothing to be had inside their borders. (1) (2) (4) (5) (7) In some cases, young people are being asked to leave their country because there is no work to be had. Will this happen all over Europe? We seem to be moving in that direction. The trend seems to be that after austerity measures get passed in a given country, the unemployment picture gets much worse. This tendency will not reverse any time soon. Where can Europeans go to find jobs? Many of them are going to Germany, but will this lead to a flood of workers over there? (4) Some are going to Brazil - particularly the Spanish and Portuguese. (2) The US has an unemployment problem of its own - as does Canada. The emerging markets still have a large surplus of workers, and the wages are not as high as the developed world. In places where high unemployment does not exist, once people go there and look for work, jobs will disappear there as well.

If high unemployment is a given, what are the effects? If people are leaving their families and having to settle in unfamiliar places, there will be a high social cost. Most people are leaving in distress in order to survive, which has to have a toll on everyone involved. Much of the tradition that has built in most places will be destroyed and new traditions will be created. Much of the growth in the past came from housing and related expenditures. If people have to switch countries frequently, will this still happen? Why would you buy a house if you are forced to sell it 3 years later? The ramifications of the employment scenario run a lot deeper than it appears, and unexpected effects will likely occur as a result.

Sources:

1) http://singularspain.com/general/unemployment-the-drama-of-the-spanish-young-people/

2) http://online.wsj.com/article/SB10001424052970203550304577137174048327642.html

3) http://www.wsws.org/articles/2012/may2012/spai-m01.shtml

4) http://www.bbc.co.uk/news/world-europe-17041969

5) http://bangordailynews.com/2012/02/12/business/irish-urge-their-children-to-leave-to-find-jobs/

6) http://www.therecord.com/news/world/article/701676--why-ireland-s-best-and-brightest-are-leaving

7) http://articles.chicagotribune.com/2012-04-10/news/ct-met-kass-0410-20120410_1_young-people-taxi-drivers-greece

8)

http://business.financialpost.com/2012/04/28/families-leaving-greece-in-droves-to-stay-afloat-financially/

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.