National action plan for employment targets labour market flexicurity

At the end of January 2008, the Bulgarian cabinet adopted a national action plan for employment for 2008, drawn up with social partner input. The plan changes the policy focus from subsidising employment to vocational education and training. It aims to create more and better jobs through greater flexibility and security on the labour market – the approach known as flexicurity. The targets include an employment rate of 62%, an unemployment rate of below 7% and a new start for 30% of the newly registered unemployed.

Current labour market situation

The 2008 national action plan for employment adopted in January was drawn up by a task force including social partner and government representatives and was widely discussed in national social partnership bodies. It identifies the following main characteristics of the current labour market situation:

• a low unemployment level, but an exceptionally problematic structure of unemployment. Among unemployed people, over 55% are long-term unemployed, mainly with a low or non-existent level of education and qualifications;

• an increasing shortage of labour, in a context of demographic problems caused by an ageing population and labour emigration;

• a low economic activity rate among the population, compared to the other EU Member countries;

• a large number of non-active ‘discouraged’ people not registered as unemployed;

• deepening regional differences in employment and unemployment;

• an inadequate involvement of the economically active population in lifelong learning, with few signs of improvement in this area;

• the first signs of labour market migration from neighbouring non-EU countries, since Bulgaria joined the EU.

Priorities and target groups

In line with the Lisbon strategy, whereby Member States draw up national reform programmes to implement the EU’s integrated guidelines on economic and employment policy, and with specific reference to the labour market, the 2008 national action plan for employment defines the following priorities for action:

• the implementation of an integrated and consistent approach to raising economic activity and employment rates within the formal economy;

• increasing the skills of the workforce and improving the match between supply and demand on the labour market;

• achieving greater labour market flexibility and security by coordinating the four components of the ‘flexicurity’ approach endorsed by the EU (EU0707069I). The four components are flexible and reliable contractual arrangements, comprehensive lifelong learning strategies, effective active labour market policies, and modern, adequate and sustainable social protection systems.

The main groups targeted in the 2008 plan are, as in previous years, young people, long-term unemployed people, those aged over 50 years, people with disabilities, people with low education or who are illiterate, non-active and ‘discouraged’ people, and people from the Roma minority. Special attention is paid in the plan to a new target group – unemployed people who face multiple labour market disadvantages.

Actions

In order to meet the increasing demand for labour with an adequate supply of labour in qualitative and quantitative terms, the 2008 employment plant includes actions aimed at achieving progress in: stimulating unemployed and non-active people to look for a job; increasing labour market flexibility and security; increasing labour mobility; integrating vulnerable groups in the labour market (and especially people from the Roma minority); and improving public employment services.

The plan also provides for a large-scale public discussion on increasing flexicurity in the labour market.

Results expected

The government expects that implementing the various actions, programmes, projects and measures set out in the 2008 employment plan will:

• increase the employment rate (in the 15-64 age group) to 62%;

• reduce the unemployment level to below 7%;

• ensure training and employment for at least 35,000 young people aged up to 29 years;

• provide a ‘fresh start’ for 30% of registered unemployed people aged up to 29 years within six months;

• provide a ‘fresh start’ for 30% of long-term registered unemployed people within 12 months;

• treble the number of pensioners registered at labour offices;

• provide training for 73,961 people, 51% more than in 2007.

Commentary

Positive changes made to labour legislation in 2007 may make it possible for the new national action plan on employment to implement better the principles of labour market flexicurity. This should make it easier to achieve the plan’s main objective of high-quality employment.

Introducing a coordinated approach between the four components of flexicurity should contribute to reducing insecurity in employment, labour market segmentation and undeclared employment, while at the same time increasing labour supply and creating the preconditions for an improved work–life balance.

Bozhidar Arsov, Institute for Social and Trade Union Research