Commission presents proposals for a job-rich recovery

In mid-April 2012, the European Commission presented an employment package designed to boost job creation across the EU, in response to the damaging effects of the economic crisis on Europe’s labour market. The package presents ideas for ways in which Member States can encourage recruitment, such as cutting taxes on labour or supporting business start-ups. It also identifies areas with the greatest employment potential including the green economy, health services and ICT.

Background

On 18 April 2012, the European Commission issued a new employment initiative in response to the continuing economic crisis and its negative impact on the labour market across the EU.

The Communication(2012) 173 final: Towards a job-rich recovery (120Kb PDF) states that its purpose is to complement the employment priorities of the EU’s Annual Growth Survey with medium-term policy guidance within the context of the Europe 2020 employment objectives. It also aims to build on the EU’s employment guidelines, prioritise certain actions according to the current economic context and build trust and confidence among all actors to put the necessary employment reforms in motion.

The Communication is accompanied by an employment package, consisting of a range of Commission Staff working documents. These set out how employment policies intersect with a number of other policy areas in support of smart, sustainable and inclusive growth.

Call to action

This initiative calls on Member States to strengthen national employment policy in the following ways:

  • Creating favourable conditions to boost job creation and demand for labour. This could include subsidies for employers hiring staff, shifting tax away from labour, and supporting those who want to become self-employed.
  • Exploiting areas where there is future job creation potential, including the green economy. The Commission estimates that around 20 million jobs could be created in this part of the economy by 2020 and says Member States should include green employment in their national jobs plans.
  • Improving workforce planning and forecasting in the health sector, including developing more effective recruitment and retention strategies for workers in this sector. The Commission notes that it is launching a consultation on employment opportunities in personal and household services.
  • Supporting the growth of highly-qualified workers in the ICT sector, and promoting the development of digital skills across the entire workforce.

Encouraging reform

The Commission also sets out the main areas where it believes labour market reform is necessary. These ideas include increasing internal labour market flexibility, ensuring that pay is decent and ‘low-wage traps' are removed, and avoiding the excessive use of atypical and non-standard employment contracts.

Young people are suffering disproportionately from the crisis and the Commission stresses the need to step up efforts to support young people as they try to enter the labour market.

And there is still evidence of a skills mismatch in the EU – despite high and rising unemployment, there are reported to be around four million job vacancies. The Commission stresses the need for increased investment in skills development, anticipation of skills needs and the development of lifelong learning.

Labour mobility

Labour mobility is another key issue identified by the Commission, which states that it is committed to removing obstacles to the free movement of workers. This includes improving pension portability, focusing on the tax treatment of cross-border workers and ensuring that workers are aware of their rights and obligations. It also urges Member States to lift restrictions on labour market access for workers from Bulgaria and Romania and to allow nationals from other Member States to access jobs in public service.

For its part, the Commission plans to make the EU EURES job seeker portal into a ‘true European placement and recruitment tool’, with the ability to apply for jobs online from 2013.

Finally, from 2013, as part of the European Semester governance framework, the Commission will introduce a scoreboard to keep track of how Member States progress in implementing their National Job Plans. There will also be EU-level exchanges of views and monitoring of wage developments.

Presenting the new package, László Andor, EU Commissioner for Employment, Social Affairs and Inclusion stated:

Current levels of unemployment in the EU are dramatic and unacceptable. Job creation must become a real European priority. If we are to restore growth and cope with major structural changes like the greening of the economy, an ageing population and technological change, the EU needs a dynamic and inclusive European labour market.

This employment package will be discussed at a high-level employment conference in September 2012.

Commentary

It is clear that the EU is facing the greatest challenge to its economy and labour markets in its history, as a result of the ongoing economic crisis. This latest initiative sets out the response of the Commission, which is aiming to provide fresh impetus to the labour market by concentrating on potential growth areas, urging Member States to concentrate on developing and opening up labour markets and improving coordination at EU level.

Whether these efforts will be successful in making an impact on the EU labour market remains to be seen. It will certainly be a difficult task, given the breadth and depth of the crisis.

Andrea Broughton, Institute for Employment Studies

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