iStockphoto/Rob Friedman

Floyd Norris is being overly hasty in his seeming advocacy of a European approach to job protection for the United States. For he does so in the midst of an unusually severe global economic downturn that is still far from fully playing out and that is very likely to reveal that the presently marginally lower unemployment rate in Europe than in the United States will prove to be ephemeral.

In making his case for a European approach to job protection, Floyd Norris overlooks two key points. The first is that the European recession is significantly deeper and is likely to last significantly longer than that in the United States with clear implications for the relative trajectory of unemployment rates in Europe and the United States over the next year.

Recent data reveal that whereas the US economy contracted at an annualized 6.4 percent rate in the first quarter of 2009, the European economy contracted at an annualized 10 percent rate while the German economy contracted at over 15 percent. The more intractable problems in the European banking sector than in the United States, coupled with Europe's very much less aggressive monetary and fiscal policy response to the crisis than in the United States, makes it highly probable that Europe will be very much slower to extricate itself from recession than the United States.

The second and more important point that Floyd Norris overlooks is the enormous risks that Europe's rigid labor market poses to the survival of the Euro in its present form. The asymmetric shocks to which the individual European economies are now being subjected underscores the need for very much greater labor market flexibility than Europe presently enjoys if unemployment in many European countries is not to rise to politically intolerable levels. Without very much increased wage flexibility, it is difficult to see how countries like Ireland, Greece, Portugal, and Spain can regain the substantial amount of international competitiveness that they have lost with respect to Germany since the Euro's launch in 1999. It is similarly difficult to see how Ireland and Spain might cope with housing busts that make those in the US pale without very much greater inter-European labor market mobility.

The bottom line is that the United States would be well advised to wait and see how the present global economic cycle plays out before even thinking about abandoning a flexible labor market model which has served it so well in favor of a European model which is about to be severely tested.

Desmond Lachman is a resident fellow at AEI.