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New analysis shows employment and social policies key to Europe’s job-rich recovery

15/12/2011 New analysis shows employment and social policies key to Europe’s job-rich recovery

The first annual review of Employment and Social Developments in Europe (ESDE) published by the European Commission underlines that a mix of employment and social policies is necessary to ensure a long-term job-rich recovery in the current climate of fiscal consolidation and bleak economic outlook.

Its findings show how the economic crisis has aggravated Europe’s structural weaknesses like income inequality and the disappearance of medium-paid jobs, especially in manufacturing and construction. Poverty remains high with 115 million Europeans (23 % of the EU population) at risk of poverty or social exclusion in 2010.

The review shows in particular that, while inequality has decreased or grown only slightly in historically more unequal countries (like Italy or Greece), it has increased in many traditionally egalitarian Member States, such as Nordic countries and the general trend remains upwards. Raising participation in employment, better social spending and fairer taxation of top incomes and wealth can contribute to mitigating inequalities.

In terms of poverty, the review stresses that while Eastern Europeans are more often facing severe material deprivation, in the Northern and Western Member States, exclusion from the labour market prevails. Elderly, lone parents and low-work intensity households are at particular risk of poverty and social exclusion. Over 8 % of people with a job are at risk of poverty – so called "working poor".

Improving the employability of older workers and encouraging active ageing are set out as essential for reaching the EU employment rate target of 75 % by 2020. Active ageing policies will help to discourage early retirement, stimulate lifelong learning, adapt working conditions to the needs of older workers and provide care for the elderly.

Workers’ mobility is also highlighted as an important way to address unemployment and imbalances across labour markets. Figures show how for most receiving countries, no significant impact on local unemployment or wages has been found, while the risks of brain drain for countries of origin seem limited overall. Experience is showing that free movement brings benefits to both individuals as well as receiving countries and contributes to reducing undeclared work.

Background

The review of the Employment and Social Developments in Europe (ESDE) builds upon and extends on two previous reports of published by DG Employment, Social Affairs and Inclusion: Employment in Europe and the Social Situation Report. The review will be presented on an annual basis.

The review and its policy recommendations will feed into the European Semester, and the country specific recommendations, within the framework of the Europe 2020 strategy.