ABSTRACT
This chapter discusses the possible causes of high European unemployment and the solutions which would be implied by those causes. It is highly appropriate that employment was one of the major themes at the Birmingham Summit. In the United States, it is clear that the demand for skilled people has risen faster and the demand for unskilled people has fallen faster than the change in the pattern of skill levels in the labour force. The employment characteristics of people in the labour pool should not be evolving in a way that has wage flexibility lead to greater wage inequality. In the very bad old days, people thought that unemployment could permanently be reduced by stimulating aggregate demand. This belief has died everywhere, in Britain in 1976 and in France in 1982. A society which accepts mass unemployment, mitigated by hand-outs, will leave millions with empty lives.
