The sense of feeling productive, or the absence of it, has both psychological and physical repercussions both on the individual and throughout the society. Most economics students have studied about the “Great Depression” of the 1930’s and the image that comes to one’s mind are those of long unemployment lines and a general sense of gloom and pessimism in the society. The most severe consequences of a recession are borne by your everyday workers. The first physical signs of a recession are cuts in employment and, even following a recovery, employment is the last to recover. The United Nation’s International Labor Organization (ILO) estimates that by 2012, around 202 million people will be unemployed; Keep in mind that the unemployment figures include only the people who  are of working age and actively seeking a job.

A significant portion of the unemployed happen to be concentrated in the Euro Zone which contributes to around 20% of the global output.  One of the worst hit countries is Spain with around 24% unemployment rate. The largest economy, the United States, has also failed to make significant progress in cutting back Unemployment with the latest data showing that growth has not picked up as forecasted.   Also troubling is news from emerging markets like India and China that employment has also stagnated.

The ILO reports lead author points out that labor market reforms in Europe have been “Ill conceived” especially in a crisis situation and has further aggravated the problem. The suggestion is for a medium term solution where austerity is given priority, but not at the cost of a possible slide into another recession. The strength of the Euro Zone and the United States is crucial to global economic recovery. The main problem facing emerging economies are the slump in exports contributed by a fall in consumption in developed nations. It is thus unlikely that a full swing recovery can take place in the absence of a strong US and European economy. The age of isolated economic prosperity seems to have drawn to a close.