Benchmarking Europe report analyses employment trends

The ‘Benchmarking working Europe’ report represents the European Trade Union Institute’s annual contribution to the EU spring summit in March. The study provides an assessment of progress towards meeting the targets of the Lisbon Strategy. Among the key trends noted in the 2009 report are labour market developments, including the growth of atypical forms of employment, as well as aspects of quality of work, lifelong learning and social cohesion.

Each year, the European Trade Union Institute (ETUI) publishes its annual contribution to the EU spring summit. Its report, Benchmarking working Europe 2009, is described as providing a ‘genuine benchmarking exercise applied to the world of labour and social affairs and grounded in effective labour and social rights’. The aim is to establish what progress – or lack of – has taken place in selected areas of importance to the trade unions and of significance for a social Europe. The 2009 report represents a social stocktaking of the Lisbon Strategy, as a means of adding to the post-Lisbon debate.

Overall, the study presents an in-depth analysis of key employment trends, by focusing on whether the Lisbon Strategy to strengthen employment, economic reform and social cohesion – as part of the knowledge-based economy – is delivering results. The principal aims of the benchmarking report are to determine whether the strategy has delivered the gains that might have been anticipated, particularly in relation to the growth in employment rates and the greater participation of underrepresented groups in the labour market – primarily women and older workers. If evidence of improvement is not found, the study also considers whether the strategy could still be repaired or whether it is ‘doomed to fail’ and consequently whether a totally different strategy is needed.

Employment rates

The Lisbon Strategy was developed around the objective of increasing the EU employment rate and certainly in its first years, as the benchmarking report notes, the rate increased in most EU Member States. However, the employment rate has become ‘stranded’ at 65.4% since 2007 and the report’s authors predict that it is unlikely that the Lisbon target of an employment rate of 70% will be attained by 2010. While the report expresses doubts that this rate would in any case have been achieved, it argues that the current economic and financial turmoil makes this target even less likely.

Moreover, the study points out that the increase in employment rates has mainly been in low-skilled employment and concludes that the Lisbon Strategy has thus not delivered on its objective of creating better jobs but has instead generated more part-time and temporary employment. This form of employment, which predominates among women, is not always the preferred option for workers and represents – according to the report – an under-utilisation of labour. ETUI finds that part-time employment has increased by more than two percentage points over the last decade, while temporary employment has increased by almost three percentage points. Without these increments, the growth in the employment rate would be much less significant.

The increase in part-time work has boosted employment rates for women although female employment rates have not converged with the rates for men. Gender differences remain pronounced. For example, while older men on average had an employment rate of 55.1% in the second quarter of 2008, older women had an average rate of only 37%. The report notes that, overall, a 14 percentage point difference still exists between male and female employment rates; furthermore, those countries with higher than average female employment rates are also those with much higher levels of part-time work. Male employment rates have increased somewhat, but these improvements are – according to the report – ‘much less marked than among women’. This means that the proportion of men in employment is growing at a lower rate than that of women.

New forms of labour and job quality

The report is critical of new forms of labour such as non-voluntary part-time jobs, temporary agency work, fixed-term employment and low-wage jobs, describing them as ‘precarious work’ that has ‘spread like a plague throughout Europe’. This has resulted in employment relationships that are ‘less stable and increasingly insecure’. The report notes that, while the overall employment rate has grown by about five percentage points, if the rise in employment trends is expressed in terms of full-time equivalents, the increase is less than two percentage points.

In relation to wider issues of inequality, the report finds that for the 25 EU Member States (EU25) before Bulgaria and Romania joined the EU in 2007, ‘income inequalities have widened since 2000. Whereas the top quintile at that time received 4.5 times as much income as the bottom quintile, this ratio had increased to 4.8 in 2007’. The report asserts that inequalities within countries have actually increased and that 8% of those in employment are ‘working poor’, concluding moreover that ‘no major advances are apparent in terms of closing the gender gap with regard to wages and poverty’.

The ETUI study finds that low-skilled workers are suffering, particularly in the currently poor economic climate, in terms of both employment opportunities and quality of jobs. This finding of social inequality is echoed in the report’s commentary on a ‘significant lack of progress in the areas of lifelong learning, school drop-out rates and investment in research and development, among others’. This indicates a lack of improvement in relation to social cohesion.

Commentary

The Benchmarking working Europe report is an annual analysis of employment trends published by ETUI, the research institute associated with the European Trade Union Confederation (ETUC). BusinessEurope, the organisation representing employers, similarly produces a regular analysis of employment trends in its Economic outlook: the spring 2009 issue forecasts a decline in employment rates. In relation to the Lisbon Strategy, the European Commission publishes an annual strategic report containing a country by country assessment of national reform programmes; the latest edition (426Kb PDF) was adopted on 28 January 2009.

Sonia McKay, Working Lives Research Institute