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Employment and social situation: Quarterly review shows a broadening recovery amidst widespread challenges

13/04/2015
Employment and social situation: Quarterly review shows a broadening recovery amidst widespread challenges © DmitriMaruta / Shutterstock

The economic situation in the EU started gradually improving nearly two years ago, and most Member States have recently registered positive GDP growth. Employment has started picking up, with improvements now materialising in most sectors.

The latest Employment and Social Situation Quarterly Review highlights significant positive trends, such as the continuous fall in unemployment, the increase in permanent and full-time contracts, the decline in youth unemployment and also — for the first time since the onset of the crisis — the decline in long-term unemployment. However, considerable challenges remain, with levels of unemployment still high, and significant differences across Member States.

Employment saw an increase in the vast majority of Member States in 2014, including in some of those with very high unemployment rates such as Greece (26.0%) and Spain (23.2%). It increased by 1.0% between the fourth quarter of 2013 and the fourth quarter of 2014. It was up 0.2% in the fourth quarter of 2014, compared to the previous quarter. 2.7 million jobs have been recovered since employment levels in 2013 reached their lowest point, in the first quarter. Over the year, employment increased in both industry and services sectors. More than half of the growth in employment was due to permanent and full-time contracts.

Challenges remain, especially for long-term and youth unemployment

Unemployment rates still vary a lot across the EU with the lowest unemployment recorded in Germany (4.8%) and Austria (5.3%), and the highest in Greece (26.0% in December 2014) and Spain (23.2%).

Long-term unemployment  fell slightly by 0.2 percentage points between the third quarter of 2013 and the same quarter of 2014, according to the latest figures available. However, it remains a challenge, standing at 4.9%. More than half of the unemployed people in the EU — up to 12.4 million people — have been out of work for more than a year. Of these, more than 6 million have been unemployed for more than two years. Rates remain very high in some Member States like Greece (19%), Spain (12.6%), Croatia (9.7%), Slovakia (9%), Portugal (8%), Italy (7.4%) and Cyprus (7.8%).

The unemployment rate of young people has been falling since 2013 in the EU as a whole and in most Member States, but remains too high (21,1%). In order to speed up the implementation of the Youth Guarantee, the European Commission proposed in February to make 1 billion euro from the Youth Employment Initiative available as early as this year. Under the Youth Guarantee Member States have committed to ensure that all young people under 25 get a good-quality, concrete offer for a job, apprenticeship, traineeship, or continued education, within 4 months of them leaving formal education or becoming unemployed.

Financial distress despite rise in household income

In line with economic and employment improvements, the growth in household income has continued at a faster pace, mainly driven by the growth in employment. However, the level of households reporting suffering from financial distress (needing to draw on savings or to run into debt to cover current expenditures) remained unchanged and even intensified for those households with lower incomes.