Belgium EIRO CAR on ‘helping young workers during the crisis: contributions by social partners and public authorities’

  • Observatory: EurWORK
  • Topic:
  • Non-standard employment,
  • Social partners,
  • Working conditions,
  • Industrial relations,
  • Published on: 11 March 2012



About
Country:
Belgium
Author:
Peter Kerckhofs, Marie Van den broeck
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Figures show that young workers have been highly concerned by the crisis. In June 2010, the unemployment rate of people aged 25 or less reached 24.4% (seasonally-adjusted level) compared to 8.7% for older job-seekers. Many specific policies aiming at integrate young workers in the labour market already pre-exist the crisis however; no drastic change in approach can be detected since 2008.

QUESTION 1: LABOUR MARKET SITUATION OF YOUNG PEOPLE

1.1 Please briefly indicate whether there is a debate in your country regarding the situation of young people in the labour market. Are gender differences one of the preeminent topics of the debate?

Yes, there is. Low qualified young workers are considered by the governments and the social partners as a “target group*” so that specific labour market integration measures are delivered. Gender differences are not preeminent topics of the debate. As regards to the workers, the main target groups are (Ministry of Employment):

  • Young people, particularly the least qualified of them;
  • Old workers and the old unemployed persons;
  • The long-term unemployed persons.

Besides, there was a discussion in the Belgian political debate over the reduction in time of the right to unemployment benefits, not only for younger unemployed. An OECD study provided input for this debate, suggesting not providing for unemployment benefit before youngsters have contributed to the system. From an insurance logic it can be questioned if risks can be covered without any payment of premium. The Belgian political debate did however not follow this logic and the economical downturn stopped the debate. In the meanwhile methodologies were developed for additional activations measures focussing especially on long term unemployed youngsters that have weakest chances on the labour market (Van Parijs and Struyven 2010).

1.2 Is there evidence that young people are in a particularly disadvantaged position in the labour market? If so, please summarise the key factors that lead to that situation and whether if there are gender differences for these. Is there evidence that the situation has become worse since 2008?

For answering the question please use evidence from research studies and official reports and provide reference details. Particular factors that may be of relevance include:

  • Collective bargaining arrangements;
  • Legal arrangements (contract status, etc.);
  • Education policies as they affect work transitions for young people;
  • Welfare policies as they affect work transitions for young people (e.g. related to housing, minimum income for young people, monetary payments or subsidies, health, etc.);
  • Vocational Education and Training (VET) arrangements.
Table 1. Recent unemployment rate (seasonally-adjusted level)
 

Total

Aged ≤ 25-years-old

Aged > 25-years- old

2010-09    

8,7

24,4

7,2

2010-08    

8,7

24,3

7,3

2010-07    

8,7

24,1

7,3

2010-06    

8,6

23,7

7,1

2010-05    

8,5

23,7

7,1

2010-04    

8,5

23,7

7,0

2010-03    

8,4

23,9

7,0

2010-02    

8,4

23,9

6,9

2010-01    

8,3

23,7

6,8

2009-12    

8,2

23,4

6,7

2009-11    

8,1

22,9

6,6

2009-10    

8,0

22,2

6,6

2009-09    

8,1

22,7

6,7

Source: EUROSTAT

With regards to the figures above (Table 1), there is clear evidence that young people are in a particularly disadvantaged position in the Labour market. The unemployment rate of people aged 25 or less is more than three times higher compared to older job-seeker. According to the Higher Council for Employment (Conseil Supérieur de l’Emploi, CSE), two main reasons can explain the situation (CSE, annual report 2009):

  • When finishing their studies, many students freshly graduated entered a labour market in contraction generating mechanically an increase of the unemployment rate.
  • Younger workers face higher recruitment selectivity that penalizes them because they have less or no experience/training and they do not manage well their job search (raising the necessity of a specific accompaniment).

In addition, there is also a more structural reason. Indeed, many young people accumulate difficulties in relation to their age and their low experience but also, to their qualifications in an environment where high competencies and levels of performance are required (OCDE, 2010 ; CSE, annual report 2009).

Table 2. Recent evolution of youth unemployment rate (a years-to-years variation)

Table 2. Recent evolution of youth unemployment rate (a years-to-years variation)

Source: National Employment Office (Office National de l’Emploi, ONEm) in CSE Annual Report 2009

It has been observed that during periods of recession, the situation of the young people on the labour market may degrade more rapidly. This phenomenon still has been observed with the recent crisis: considering a year-to-year variation, the unemployment rate of people aged 25 or less start to increase more rapidly from the end of 2008, when comparing to older generations (Table 2). The reason evoked is that younger workers have a higher probability of getting temporary contracts and consequently, are potentially the first ones concerned by cost-cutting measures and job losses (CSE, annual report 2009).

Table 3. Recent evolution of youth unemployment rate, by gender (a years-to-years variation)

Table 3. Recent evolution of youth unemployment rate, by gender (a years-to-years variation)

Source: National Employment Office (Office National de l’Emploi, ONEm) in CSE Annual Report 2009

Gender-based differences can be observed (Table 3). Young male unemployment rate started to increase continuously since November 2008 while young female unemployment rate keep on slowing down from January 2009. In June 2009, young male unemployment rate observed a 29% peak growth of the proportion while it didn’t exceed 8% among women. This can be explained by the gender distribution in certain areas of economic activity (CSE, annual report 2009). First, the building and construction sector which has been highly affected by the crisis employs more male workforce. Second, the industrial sector is still male-dominated while women are mostly employed in services sectors.

1.3 Have the challenges of young workers been particularly important in certain sectors? If yes, please indicate the sectors involved (up to three). Please comment on the main reasons behind the particular relevance of these issues in these sectors, and its most significant expressions.

See above.

1.4 Have the challenges of young workers been particularly important in certain regions or areas of the country? Please comment on the main reasons behind the particular relevance of these geographic differences.

According to Bollen (2007) the problem of youth unemployment in Belgium, is mostly a problem in Wallonia and Brussels. His argument is that youth unemployment in Flanders is in line with OECD averages, while the number of long term unemployed in Flanders is below the OECD averages.

Table 4. School-leavers and young workers in 2007 (in %)
 

School-leavers of 2006 working in 2007

Youngsters 15-24 working in 2007

 

total

men

women

total

men

Women

Flanders

67.6

66.2

69.1

31.5

33.1

29.9

Wallonia

46.6

48.7

44.1

23.1

26.5

19.4

Brussels      

19.6

23.2

16.3

Belgium

58.0

57.6

58.5

27.5

29.9

25.0

Source: Ministry of Economy - Directorate-general Statistics and Economic information

However, the 2008 crisis affects more young workers on the labour market in Flanders compared to the other Regions (see Table 5.).

Table 5. Recent evolution of youth unemployment rate, by Region (a years-to-years variation)

Table 5. Recent evolution of youth unemployment rate, by Region (a years-to-years variation)

Source: National Employment Office (Office National de l’Emploi, ONEm) in CSE Annual Report 2009

Trends in the evolution of unemployment rate show different path according to the Region (Table 5.). In Flanders relative to Wallonia and the Brussels-Capital Region, youth unemployment rates varied more in response to economic fluctuations, because of a higher proportion of jobs in the private sector, in particular in the industry (CSE, annual report 2009). Since the 2008 crisis, the youth unemployment rate in Flanders increased more rapidly and reached a 45% growth peak of the proportion in May 2009 comparing to 2008. After the peak, the growth rate slowed down but staying above 20% In the Brussels-Capital Region, youth unemployment rate started to increase in the early 2009, with a peak of 12% in June. In Wallonia, the curve didn’t rise beyond its 2008 level until March 2009, maintaining a highest level increase of around 10%.

QUESTION 2: COLLECTIVE BARGAINING AND SOCIAL DIALOGUE IMPACT ON YOUNG WORKERS

2.1 Please indicate whether multi-employer collective bargaining since 2008 has addressed particular issues affecting young workers. Illustrate with examples and explain the coverage of any specific agreements identified (national, sectoral, regional, etc.). Please also provide an assessment of these measures.

The Inter-Professional Agreement 2009-2010 (IPA*) does not address any particular issues affecting young workers.

*The IPA is a two-year framework programme negotiated by social partners’ representatives (worker and employer organisations) and that covers all companies and workers of the private sector. The IPA has to be transposed into collective agreements at the National Labour Council (Conseil National du Travail/ Nationale Arbeidsraad, CNT/NAR ) and at the sectoral joint committees level.

At sectoral level, very few collective agreements focus on young workers. However, we have found some collective agreements on a new wage scales system and on young workers’ remuneration. Those agreements have been negotiated in the framework of the European Directive 2000/78/EC of 27 November 2000, establishing a general framework for equal treatment in employment and occupation.

2.2 Please indicate whether single-employer collective bargaining and social dialogue practices at company level since 2008 have addressed particular issues affecting young workers. Please illustrate the most important of such initiatives (up to three) and also provide an assessment of these measures.

No information available.

2.3 Please outline particular initiatives that have been developed by tripartite or bipartite social dialogue to help young workers. Illustrate the most important of these initiatives and, where possible, please also comment on their effectiveness in achieving their objectives.

In theory, social partners are consulted by the governments at many levels (federal, regional, sub-regional levels) concerning employment policies. In general, these policies result from a tripartite social dialogue.

Examples:

  • The Brussels-Capital Region

In 2008, the Brussels-Capital Region Government and social partners agreed on an “Action plan” for the young people in Brussels, containing about twenty new or amplified measures.

The Plan includes five different axes associated with different measures and devices:

  1. Develop work experiences: extend training courses in occupational environment and student jobs; strengthen collaboration with schools, inform students about the realities of the labour market, etc.
  2. Fight against schools polarization: value part-time training, investment in technical and professional equipment in schools, etc.
  3. Improve the skills of the job-seekers: systematization of training courses for young job-seekers, prepare young workers for the entrance examination for the public sector, support language learning with language-learning-vouchers, etc.
  4. Adapted Accompaniment Plan to every job-seeker: strengthen the accompaniment of young people aged 25 years or less by more frequent meeting and by proposing systematically job offers corresponding to their profile, etc.
  5. Develop employment for low-qualified workers: in particular in high potential growth sectors in Brussels (Construction, Non-profit, Hotel-Bar-Restaurant, Transport and logistics, Health, etc.), inform employers about reduction in employees’ contributions when hiring low qualified young job-seekers, etc.
  • The Flemish Region

The Flemish Government and the social partners have agreed in May 2007 to develop a “Competence agenda 2010”. It needs to contribute to sustainable and innovative growth through activation and employability. Among the ten priorities in this “competence agenda 2010” of the Flemish government and the social partners there is an “Action Plan for youth unemployment”. This youth unemployment action plan stands for an integrated approach of unemployment among 25 year old lower and middle educated youngsters. The plan aims to activate them as quick as possible, via quick and intensive mediation and guidance of a maximum of those youngsters into sustainable employment.

The objective is to make use of the improvement of the labour market in 2010 to ceise all chances to lead those youngsters as quick as possible into sustainable employment via quick and intensive activation and guidance. The target group are those younger than 25 with middle and lower education. The plan offers them a quick and intensive mediation track, including job offers via sms and e-mail, and both collective as well as individual employment mediation. There is also foreseen in job coaching as follow up to maximise the sustainability of the employment of those youngsters. For all these actions, a budget of 2 million Euros was foreseen in 2007, increasing to 4,5 million Euros, in 2008 and 2009.

QUESTION 3: ATTITUDES AND POLICIES OF SOCIAL PARTNERS TOWARDS YOUNG WORKERS

3.1 Please indicate whether the labour market situation of young people has figured prominently on the agenda of employer associations since 2008. In the analysis of employer associations, what are the main causes of the likely disadvantaged position of young workers?

In its memorandum, the Belgian Federation of Employers (Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen, FEB/VBO) mentioned that in these times of crisis, it is crucial to strengthening the accompaniment and the control of unemployed persons. The FEB insists on the fact that the European Commission incites member states to accelerate the procedure of accompaniment for the young workers which should start within six months after they left school or have been registered as a job-seeker. The FEB/VBO underlines that the youth accompaniment procedure delivered by the Walloon public employment services (ONEM) begins only after 15 months.

3.2 Have the employer associations developed any specific policies or activities beyond collective bargaining? Where relevant, please comment on any barriers or challenges identified by employer associations to improving the position of young workers.

Employers associations

Please illustrate the most important of such initiatives (up to three).

No information available.

3.3 Please indicate whether the labour market situation of young people has figured prominently on the agenda of trade unions since 2008. In the analysis of trade unions, what are the main causes of the likely disadvantaged position of young workers?

After the June 2010 elections at federal level, the Belgian General Federation of Labour (FGTB/ABVV) and the Confederation of Christian Trade Unions (CSC/ACV) published a common memorandum outlining their priorities for the next four-year Government term. The first issue concerns employment in which Social partners insist on supporting particularly the younger workers, who are more vulnerable to unemployment.

Recently, Claude Rolin, the General Secretary of the CSC, consider that priorities for the next cross-industry collective bargaining (starting in November 2010) should be put on young workers (L’Echo, 2010-10-01 ).

3.4 Have the trade unions developed any specific policies or activities beyond collective bargaining? Where relevant, please comment on any barriers or challenges identified by trade unions to improving the position of young workers.

Please illustrate the most important of such initiatives (up to three).

The Belgian General Federation of Labour (FGTB/ABVV) and the Confederation of Christian Trade Unions (CSC/ACV) have both set up a union branch focusing on young people. They inform and give advice on people’s rights (brochures, awareness raising campaigns…); they defend young people’s interest with the political decision-makers; they organize citizenship trainings, etc.

QUESTION 4: GOVERNMENT RESPONSES TO HELP YOUNG WORKERS

4.1 Please provide information and examples on government initiatives aimed at helping young people into employment and keeping them in work.

One important aspect to keep in mind when considering the Belgian case is the repartition of competences between the various levels of public authorities.

The Law of 8th August 1988 on the State reform distributes the competence in terms of employment policies between the Regions (Brussels-Capital, Flanders, and Wallonia) and the federal State:

Regional competence matters:

workers integration;

social advancement;

professional retraining and reorientation, in the private sector;

employment integration programmes in the private sector for people receiving unemployment benefit;

application of the standards concerning the immigrant workers occupation;

access to legal professions in the tourism sector.

The federal State competence matters:

incomes policy;

access to legal professions (except in the tourism sector);

labour law and Social Security.

Youth employment policies at the Federal level

This first job agreement programme focuses on young workers aged 26 or less and aims at integrate them on the labour market, both in the private and public sector. Two instruments are used for this purpose:

  • Quota system to ensure balance (certain employers have the obligation to hire young people)
  • Financial incentives to firms for hiring young workers:

- a reduction in employers contribution for those who hire low qualified workers within the framework of the Roseta Plan

- a temporary additional reduction in wage costs, taking the form of an allocation, for all the employers who hire low qualified ("Activa Start" measure)

  • Special holidays

In general, young people who get their first job have a very limited numbers of paid days off since most of them have been working only part of the year. In order to address this problem, a special day-off system for young workers has been established

  • Starting up bonus and training premium

Young workers with an apprentice's employment contract, i.e. young workers who are involved in a compulsory part-time education program and receiving practical training in a company, can benefit from a starting up bonus to complete their training program. During the first two years, a 500€ bonus is allocated at the end of each year then a 750€ bonus after the third year.

An employer who takes on apprentices is entitled to receive a premium as well, and if he hires him, will benefit from tax reduction.

Youth employment policies in Wallonia

In 2007, the governments of Wallonia and of the French Community have developed many measures in favour of young workers integration in the labour market. It can be resumed in nine points:

  • Intensive accompaniment of young people since they are out of school (“Job tonic plan of action): individualized accompaniment, assessment of the skills, systematic offers of employment and/or training course by the FOREM (public employment service)
  • Passport for employment”: a personal passport is deliver to every worker resuming all the financial incentives (at regional and federal levels) an employer can pretend to if he hires the person
  • Special measures focusing in neighbourhood with high level of unemployment: job coaching, intensive accompaniment
  • Increase apprenticeship places and vocational training
  • Increase investments in technical and professional equipment
  • Starting up bonus and training premium
  • Passport for the trainee teachers, to guaranty a good quality framework for the stagier
  • Vocational insertion programme allowing low qualified workers to get a training ship and benefit from unemployment allocation at the same time.
  • Care of the young by the young in public employment service (FOREM)

Youth employment policies in Flanders

See point 2.3

Youth employment policies in the Brussels Capital Region

See point 2.3

4.2 Where possible, please provide an evaluation of the success of these initiatives. Where available, this should be an official evaluation. Where that is not possible, correspondents are asked to comment on their own views.

In December 2009, the Federal Minister of Employment, Joëlle Milquet, announced that the federal government and the regional authorities will proceed to an evaluation of the employment measures targeting young job-seekers. This will aim at estimating, Region by Region, the possible impact of these measures on the situation of the other job-seekers. According to this evaluation, and after a dialogue with the regional authorities, the federal government will proceed to possible adaptations of the system. In 2010, an evaluation report is still expected.

QUESTION 5: Commentary

5.1 Please provide your own assessment and comments on the initiatives to address the situation of young workers in the labour market including any further information that you consider important to illustrate the current situation of those groups in your country.

It is important to develop and strengthened particular initiatives to help young workers integration on the labour market. According to Gautié and Gurgand (2005), a period of unemployment longer than one year, in the beginning of the carrier, risks keeping a memory effect that determines the rest of the career, especially the feeling of being useless and can endanger the self confidence.

Beside this, one should emphasize that some employment measures can create discriminations among young workers. In general, measures targeting young workers include people till the age of 26 years-old. This age limitation could create a substitution effect among young workers; youngsters older than 26 are replaced by youngsters under 26. Cases of substitution have been seen through for example the implementation of the Rosetta Plan. To continue to benefit from the financial incentives (reduction in employers contribution and temporary additional reduction in wage costs) linked with hiring young people under 26, some employers dismissed the younger turning 26, to hire new ones under 26.

References

Peter Kerckhofs and Marie Van den broeck, Institute for Labor Studies, Université catholique de Louvain.

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