EU plans for job-rich recovery

The unemployment rate in the European Union hit an all-time high at 10.2% in February 2012. Although 1.5 million jobs were created between 2008 and mid 2011, 6 million jobs were lost over the same period. Things are even worse in the Euro area, where unemployment is the highest since the launch of the common currency.

A Eurobarometer survey on the social impact of the crisis, published in April 2012 reveals that 80% of Europeans think poverty has increased in their own country over the past 12 months. This is a significant rise in comparison to the last round of surveys in 2010. In all but four countries, more respondents feel that their financial situation has worsened in the past year and only 14% of EU citizens think their household's financial situation will improve in the next year. Difficulties with the affordability of services such as health care, childcare and long-term care are perceived as a problem by more than one third of Europeans. Feelings of job security and optimism about the present and future economic developments have fallen, particularly in Southern-European countries. The findings show in general that the crisis is having a social impact.

With EU unemployment hitting record levels and forecasts of a grim economic outlook for the months ahead, the European Commission has come forward, on 18 April 2012, with a set of concrete measures to boost jobs. The ''Employment package'' is a political response to the call by Heads of State and Government in January and March 2012 for a bigger focus on job creation.

The policy communication underlines the need for a stronger employment and social dimension to EU governance and lays down ways to involve employers' and workers' representatives more in setting EU priorities. This policy communication identifies the EU's biggest job potential areas and the most effective ways - in today's difficult economic and social climate - for Member States to create more jobs. In the current difficult economic situation of stagnation or even recession, it is imperative to mobilize labour for growth. Jobs are not a consequence of growth, but they help create it, as more people are able to work, earn and spend. Economic and employment policies need to focus on creating favourable conditions for job creation and encouraging labour demand.

The employment package reviews a number of tools that can positively impact on labour demand and offers advice on the design of such tools so as to maximize their employment impact. The employment package also sets out action plans for areas with the biggest job potential for the future: the green economy, health services and information and communication technologies (ICT). It provides a medium-term agenda for EU and Member States action to support a job-rich recovery and reach Europe's 2020 goals for smart, sustainable and inclusive jobs and growth. It is accompanied by nine working documents of the Commission.

Content of the Employment package

The employment package urges Member States to strengthen their national employment policies. In particular it includes proposals for Member States to:

·         Create the right conditions for job creation and labour demand such as hiring subsidies that create new jobs, a (budget neutral) tax shift from labour to environmental taxes, or support for self-employment.

·         Exploit the big job potential areas for the future such as the green economy where 20 million jobs could be created between now and 2020 and to include green employment into their’ National Job Plans, strengthening green skills intelligence.

·         Improve health workforce planning and forecasting to match the demand and supply of health professionals better while offering them long-term job prospects and stimulate exchange on innovative and effective recruitment and retention strategies for health workers. The Commission is also launching a consultation on employment opportunities in personal and household services.

·         Support an increase in highly qualified ICT labour and promote digital skills across the workforce.

The Communication also lays down key areas for reform so that labour markets become more dynamic and inclusive and therefore more resilient to economic change. These proposals include:

·         Drawing on the lessons learned from the crisis such as stimulating internal flexibility to reduce job insecurity and fiscal costs;

·         Establishing decent and sustainable wages and avoiding low-wage traps;

·         Ensuring appropriate contractual arrangements to prevent the excessive use of non standard ones. The Commission also stresses the need to deliver on opportunities for young people, as well as developing lifelong learning which is key to security in employment and to productivity.

·         With 4 million jobs still vacant across the EU, the "employment package" calls for higher investment in skills to address the skills mismatches in Europe’s labour markets, as well as better anticipation of skills needs. It puts forward specific instruments to improve the recognition of skills and qualifications and bring the worlds of education and work closer together.

The "employment package" also aims to create a genuine EU labour market:

·         To improve labour mobility, the Commission is fully committed to removing legal and practical obstacles to the free movement of workers such as improving the portability of pensions, the tax treatment of cross border workers or awareness of rights and obligations. It calls on Member States to allow for the export of unemployment benefits for jobseekers in another country (for a period of up to 6 months). It is also sending a strong message to governments to lift restrictions on labour market access to workers from Bulgaria and Romania and to allow nationals from other Member States access to jobs in the public service.

·         To improve the matching of jobs with job-seekers, the package proposes to transform the EURES job seeker portal into a true European placement and recruitment tool and foresees (as of 2013) innovative online self-service applications to provide users instantly with a clear geographical mapping of European job offers.

Finally, the employment package paves the way for reinforced coordination and monitoring of employment policies at EU level in line with EU economic governance. From 2013, and as part of the European Semester, the Commission plans to introduce a scoreboard to keep track of Member States’ progress in implementing their National Job Plans. To reinforce the involvement of EU and national social partners in employment policy making the Commission has put forward plans for EU-level exchanges of views and monitoring on wage developments. Finally, the package stresses the important link between policy and EU financial instruments (like the European Social Fund) in supporting countries' employment priorities and reforms.

Fighting unemployment by promoting a green growth

By exploiting the big job potential areas for the future such as the green economy, over 20 million jobs could be created between now and 2020. Transition towards a low-carbon and resource-efficient economy is a structural trend which will also redefine many existing jobs.

Smart investment plans are needed to capitalise on job opportunities arising through the greening of the economy. This includes investment in new skills and in the capacity of public employment services to prepare and match jobseekers with "green" vacancies. The Commission aims to facilitate the mobilisation of EU funding leveraging private investments in the green economy and having important employment potential. For instance, construction will be one of the sectors directly benefiting from investments in energy efficiency and climate adaptation measures such as extending coastal defences, reinforcing buildings and infrastructures, and water management.

A well-functioning labour market is a prerequisite for a successful green transition and to overcoming the challenge of skills obsolescence and displacement costs. Growing sectors may offer opportunities to use skills acquired from workers employed in declining sectors.

The job creation potential of the health sector

Healthcare is a highly labour intensive activity and one of the largest sectors in the EU. In 2010 there were around 17.1 million jobs in the healthcare sector which accounted for 8% of all jobs in the EU. Even during the economic crisis, employment in the healthcare sector has continued to grow.

There will be about 7 million additional job openings till 2020 due to replacement needs. Most jobs will require highly qualified people (more than 5 million) while the need for medium qualified personnel will remain rather significant (around 3 million). Around 200 000 job openings are expected for low qualified people.

With an ageing population and the rising demand for healthcare, the sector will remain a key driver for providing jobs in the years to come. In addition, emergence of new care patterns to cope with chronic conditions of the elderly and the rise in new technologies will require new skills. Budget constraints will mean that innovative solutions need to be found through use of new technologies, products and organisational changes.

Though health is mainly a national competence, the EU dimension of the issue is on the rise. The next step will be the launch of a Joint Action on workforce planning by the end of 2012. With the help of the Commission, a partnership of Member States and professional organisations will share good practices and develop new methodologies on forecasting the health workforce and its skill needs.

The demand for ICT professionals

The demand for information and communication technologies (ICT) professionals continues to grow while many other jobs are disappearing. Even during the crisis, the number of ICT practitioners grew at around 3% a year. By the end of 2010, 4.1 million Europeans worked as ICT practitioners in the narrowest definition (programmers and computer assistant staff), up from 2.7 million ten years earlier, with another 1.1 million in closely related occupations. Furthermore, labour demand is already outstripping the supply of ICT practitioners, and will continue to do so. By 2015, Europe is expected to face a shortage of approximately 700,000 ICT practitioners. In order to fill this gap, education in science, technology, engineering and mathematics needs to be strengthened and the career image of these fields improved, in particular for women.

Matching of jobs and job-seekers across borders

The European Employment Service (EURES) was set up in 1994. It is a European network between the European Commission and the Public Employment Services (PES) of the EEA Member States (the EU countries plus Norway, Iceland and Liechtenstein) and partner organisations. Switzerland also takes part in EURES co-operation [see section 6.4.2]. With only 25 000 employers registered and some 150 000 job placements/recruitments per year, EURES has not yet made full use of its direct employment potential.

The Commission therefore intends to focus EURES on matching, placement and recruitment, giving it the biggest possible outreach and coverage capacity, by rolling out innovative self services in all European languages and full semantic interoperability in the exchange of national job vacancies and CV data. Consequently, EURES will be in a position to deliver easier and real-time access to vacancies available in the EU, while presenting employers with a living pool of candidates where they can find the skills they need to grow their businesses.

EURES will also be expanded through targeted labour mobility schemes supporting under- serviced occupations and specific groups of workers with a high mobility propensity, as well as national labour markets which are or will become recipients of European workers. In this respect, EURES will make full use of the analysis of job vacancy and hiring developed by the Commission via different tools such as the European Vacancy Monitor and the European Job Mobility Bulletin. Regular consultations with relevant stakeholders, such as social partners and employment services, will further help EURES to tackle bottleneck vacancies for which recruitment difficulties have been identified.

The goal is for EURES to become an entry point and natural first choice for any citizen or legally resident worker and job seeker and employer considering working or recruiting in another European country, improving the efficiency of the European labour market.

The Employment Package includes a Commission policy communication "Towards a job-rich recovery" and nine Commission Staff Working Documents, of which two are consultation papers:

·         Labour market trends and challenges (analytical paper);

·         A quality framework for traineeships (consultation paper);

·         Implementing the Youth Opportunities Initiative: first steps taken (progress report);

·         Exploiting the employment potential of green growth;

·         Exploiting the employment potential of ICTs;

·         An action plan for the EU health workforce;

·         The household services workforce (consultation paper);

·         Open, dynamic and inclusive labour markets (evaluation of the flexicurity concept );

·         Reforming the European Employment Services to meet the goals of Europe 2020 (details of the EURES reform).

The package will be discussed at a high level employment conference 6-7 September 2012 to further mobilise all partners to implement the measures announced.

Discuss this theme

Name:*
City/Town/Region:*
Country:*
Message for discussion:*
Please copy the following characters in the box below:*
Note: Fields marked with (*) are obligatory.

Current discussions