Economic Decline in Europe
- Makayla Taylor
- May 8
- 5 min read
Researched by Makayla Taylor
Over the past few centuries, the European lifestyle, especially in trades and manufacturing, has gone extinct and modern services have taken their place. While some countries adapted to this change rather easily, others are unable to keep up with the demands of modern times, becoming economically unstable. When countries or areas suffer economic hardship, typically caused by a subsequent systemic lack of opportunity for locals, the inhabitants are disproportionately far-right leaning and usually favor populist campaigns (Rodríguez-Pose et al. 953). However, the caveat to this behavior is that interpersonal inequality—disparity of income, education, health, and influence, to name a few—must be present to a noticeable degree (953). This inequality factor is exacerbated when employment competition is high and the workforce is unspecialized, ultimately resulting in lower-cost outsourcing. Extreme social support for far-right, anti-immigration policies is a characteristic of the ‘geography of discontent’ (956). Places in the EU such as Belgium, North-Eastern France, North England, and North Italy are recognized as being part of the geography of discontent (956). All of these places are historically industrialized, relying on manufacturing for the majority of income, as well as being heavily dependent on global trade. Industrial trades in developed countries aren’t profitable anymore due to the modern ability to outsource unspecialized labor in developing countries for less cost.
A prevalent middle class is demonstrative of a healthy economy due to the integral role this wealth balance fulfills. Studies show that the middle class causes an increase in aggregate demand, investment in education, and entrepreneurship (Derndorfer and Kranzinger 914). On the other hand, places with a lack of middle class likely experience overarching household debt, then scramble to decrease their financial consumption, causing financial instability as a result (914). This drastic decrease in economic activity among most of the population could possibly be a driving factor of economic instability, which is observable on a national scale and affects a country’s global trade dynamic. Therefore, it can be inferred that places with downward middle class movement are experiencing economic decline. Separate studies find that social policy, presence of democratic politics, and quality of governance improves with the prevalence of the middle class (915). Hence, maintaining a socio-economic power balance may be integral for the future of democracy and socialist freedoms that Europe enjoys. The effects of middle class movement are less observable in countries with a larger economy, and amplified in countries with a smaller or compromised economy. According to data collected between 2004 to 2014, the middle class seems to be increasing in large Northern and Western European countries by both downward and upward class movement, while the middle class is decreasing across Europe, mainly in smaller countries (921). Notably, class movement was upward for France, Poland, and the UK, and downward for Germany, Spain, Belgium, and Italy (921). A key nuance to take note of is that in Germany and Belgium the middle class grew due to downward movement by the upper class, implying governmental wealth redistribution tactics, or in Belgium’s case, perhaps a strong economic recession (921). In Spain and Italy, the middle class shrank due to downward movement, suggesting unfavorable economic conditions (921). In the UK and Poland, the lower class decreased during the time which the middle class was increasing, indicating favorable economic conditions (921).

Economic trends in job tenure are related to the nature of most available jobs; the shift from industrialization to modern service work promotes the transfer of soft skills. The globalization of modern workforces inadvertently creates infrastructure around making job searching easier, optimizing the process of resettling and, as such, making relocation more desirable if the working conditions don’t suit employees. Other conditions like economic robustness play a major role in job tenure trends based on a lengthening or shortening business cycle (Goulart and Oesch 333). Some countries, such as Spain and Germany, displayed a noticeable increase in job tenure, approximately between 2005-2010, while Italy exhibits a growth in job tenure from about 2008 to 2020 (336). The UK and Poland have a lower overall job tenure than other Western European countries (336). Italy and France have the highest job tenure baseline, while Spain seems to have experienced the most drastic change from a low job tenure trend until around 2008, when job tenure rises very quickly and continues on an upward trajectory (336). Germany experienced a gradual increase in job tenure from 2000 to 2010 (336). Data from European Working Conditions Surveys (EWCS) correlates a negative inverse relationship between working conditions and job tenure (336). It can be inferred that the decline in working conditions is an effect of high job demand and low availability of desirable jobs, leading to a lack of competition in the job market and, by consequence, worsened conditions in the workplace. Additionally, Goulart and Oesch argue that an increase in job tenure could also be driven by the excessive destruction of low-tenure jobs (334).
Europe as a whole consists of polarized economic states as many smaller countries are in perpetual economic havoc, especially from extreme wealth gaps created by a dwindling middle class. Meanwhile, many indicators of economic collapse signify that Italy, France, and Spain were in a long-term economic recession during recent years that will be difficult to recover from. Other countries, including Germany, the UK, and Poland seem to be thriving, according to the metrics used to assess their economic health. Belgium’s history as an output-dependent country makes it vulnerable to the state of its trading partners, and thus more likely to be affected on a large scale by unfavorable conditions compared to larger European countries. Generally, the size of some of Europe’s countries might play a part in economic resilience; if a country is ‘too small,’ its margin for change will be slimmer in its population size and composition, as well as having a lower capacity for the industries it can sustain, though if a country is too large for its government it becomes difficult to manage. Being too large is not much of a concern in Europe, due to both the established background of larger countries and government investment in the socio-economic stability of the country. Correlation establishes a potential connection between land size and prosperity as a contributing factor in economic outcomes.
Resources/References
Derndorfer, Judith, and Stefan Kranzinger. “The Decline of the Middle Class: New Evidence for Europe.” Journal of Economic Issues, vol. 55, no. 4, 2021, pp. 914–38, https://doi.org/10.1080/00213624.2021.1982338.
Goulart, Kimberly, and Daniel Oesch. “Job Tenure in Western Europe, 1993–2021: Decline or Stability?” European Journal of Industrial Relations, vol. 30, no. 3, 2024, pp. 329–46, https://doi.org/10.1177/09596801241268144.
Rodríguez-Pose, Andrés, et al. “Left-behind versus Unequal Places: Interpersonal Inequality, Economic Decline and the Rise of Populism in the USA and Europe.” Journal of Economic Geography, vol. 23, no. 5, 2023, pp. 951–77, https://doi.org/10.1093/jeg/lbad005.
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