Informal Social Affairs Council addresses problems of older workers

An informal Labour and Social Affairs Council meeting was held under the Finnish Presidency on 8-10 July 1999. Ministers examined the problems facing older workers on the labour market and reviewed the 1999 National Action Plans for employment and proposals for the Employment Guidelines for 2000.

An informal Labour and Social Affairs Council of Ministers meeting was held under the Finnish Presidency in Oulu, Finland from 8 to 10 July 1999, with the participation of the European-level social partners and the European Parliament. In line with the priorities of Finnish labour market policy in recent years (FI9708125F), the Finnish government - which took over the EU Presidency in July 1999 - was keen to shift the focus of labour market policy away from youth unemployment towards the problems facing older workers. Ministers expressed concern at the lack of older workers in the labour market.

The outgoing member of the European Commission responsible for employment and social affairs, Pádraig Flynn, stated that 36% of individuals aged between 55 and 64 are still involved in the labour market, a rate which should be considered wholly insufficient. The policy of encouraging early retirement, which became prevalent in the EU in the 1970s at a time of rising concern over youth unemployment, is increasingly considered no longer suitable, in the context of increasing dependency ratios (ie fewer active workers and more retired people), difficulties in funding state pensions and fears of labour shortages in years to come, as birth rates decline. Research has also shown increasing evidence of a loss of know-how and expertise as older workers take up early retirement packages. Over the years a "social consensus" is seen to have evolved between employers and trade unions, that "hidden unemployment" among early retirees is more acceptable than youth unemployment. In addition, older workers have begun to perceive early retirement on voluntary early retirement packages as a perk of employment with larger companies.

Commissioner Flynn expressed the belief that early retirement has failed to generate the expected benefits in terms of employment creation for younger workers and is increasingly putting public pension systems in jeopardy. He therefore called for measures to be considered which encourage the recruitment and retention of older workers in employment, through either incentive or disincentive measures. Examples of the former would be the offering of subsidies to employers taking on older employees, or support for "life-long learning" initiatives. The latter would involve, for example, the imposition of penalties on companies making older workers redundant.

Ministers also reviewed the 1999 National Action Plans for employment drawn up by the Member States in response to the 1999 Employment Guidelines (EU9810130F) and discussed the potential shape of the 2000 Guidelines.

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