A google search on civil unrests will return quite a few news items from the very recent past. 2011 has so far witnessed a large number of civilian unrests around the world. Most notably Tunisia, Egypt, Libya, Yemen, Syria.
But England? Weren’t civilian unrests meant for the third world? Perhaps not.
A search on US civilian unrest will reveal commentators speculating about similar unrest in the US. We just have to wait and watch.
But is there an economic explanation to this recent phenomena. Historically, there have been several reasons for the unrests- unhappiness with the monarchy (French revolution), high prices (Argentina), protests against totalitarian regimes (Burma), religious persecution (Iran) and unfair labor practices (numerous). And many more.
I am going to go on a limb here and assume that when people are happily employed and can afford most goods and services, they have less or no reason to come out on the street (barring the few anti social elements who exist in every society).
Perhaps there are some indicators that may predict the onset of civilian unrests or at least attempt to explain why they happen. From an economic point of view, the two most important metrics we could look at are unemployment and prices.
Let’s look at unemployment in the European union.
FYI, the Euro Zone consists of 17 countries that share a common currency (Euro). The European Union (EU) consists of 27 countries that have a common economic union. The EU includes UK but UK is not part of EZ, and hence it still maintains it currency (GBP). Wikipedia has a Euler diagram that illustrates the Euro map nicely.
For the purposes of our discussion here, let’s look the EU also called EU27.
Data for European Economy is available from Eurostat, the official statistics provider for the Europe. There are several places on the web site that provides detailed data by countries or for the region as a whole. The principal European economic indicators are available on this page.
Notice that UK’s unemployment rate, while lower than the average EU27 rate, has been flat since 2009. Every economy has it’s ups and down, but any indicator that shows no signs of improvement for a prolonged period will test the patience of the public.
Incidentally, Tottenham where the riots started, had one of the highest unemployment rates in the London area.
Data for this chart was obtained from the Bulk download section of Eurostats Statistics Database.
There is a list of all database files from where you can download tsv files and create your own charts.
The unemployment data file is lmhr_m.tsv.gz
Unzip the file to obtain the Excel file. The Excel file has statistics for all demographics such Males older than 25 etc. This chart displays total unemployment.
In a recent blog post, we discussed the US Federal deficit. The European countries are in no better shape with high debt and higher deficits. The recession led to lower tax collections for the government, which in turn led to lowering of spending on social programs such as employment assistance. The unemployed are not being helped by either the private sector or the public sector. Until the employment situation improves, expect the unrest to simmer.
How about Consumer prices in the European Union? Have the prices increased so much that would “justify” a civilian unrest. You can create your own chart by taking the consumer price data from the following web site.
US has had its share of civilian unrest in the past but mostly in the context of socio-cultural conflict (Vietnam war, Rodney King). Will the US also see similar unrests in the future? The unemployment rate has been flat for quite a while now.
In a recent conversation, someone remarked that US will also see civilian unrests but for more than one reason-the huge disparity between the rich and poor, or more accurately, the rich and the middle class was cited as another important reason.
Sources of Data for EU : Eurostat