The proposal for the Joint Employment Report (JER) confirms that the EU labour market has fully recovered from the COVID-19 pandemic, showing a strong performance and surpassing pre-pandemic employment levels since the third quarter of 2021.

According to the Joint Employment Report (JER) proposal, despite strong growth, young people, women, and vulnerable groups, such as people with disabilities or with a migrant background, need further support to join the job market.

Policies to help workers get in-demand skills need to be strengthened to mitigate the risks of high labour and skills shortages and to support job-to-job transitions in changing labour markets, especially against the background of the green and digital transitions.

Promoting just labour market transitions is important to reach the 2030 EU headline targets on employment and skills, which are integrated into the JER.

Price increases since 2021, accelerated by Russia's war of aggression against Ukraine, have put pressure on both the EU economy and households. Real GDP growth slowed down in the spring of 2022 and household income in real terms decreased for the first time since the COVID‑19 pandemic.

In this context, collective bargaining and fair and adequate minimum wages are powerful tools to preserve the purchasing power of wages while promoting employment. To complement this, action should be taken to improve the coverage and adequacy of minimum income protection. This will also contribute to the 2030 EU headline targets on employment and poverty reduction.

According to Nicolas Schmit, Commissioner for Jobs and Social Rights: “The labour market has successfully recovered from the shock of COVID-19, but we need to stay vigilant in the wake of the energy crisis and Russia's war of aggression against Ukraine. The economic slowdown, increase in energy prices and bottlenecks in supply chains could have a major impact on jobs. In the current high-inflation context, wage development should protect the purchasing power of wage earners, in particular for low wage and minimum wage earners, while reflecting socio-economic conditions and preserving competitiveness. Adequate social protection, including minimum income, is also vital to preserving livelihoods”.

Background

The proposal of the Joint Employment Report is part of the 2023 European Semester cycle of economic policy coordination.

The package draws upon the Autumn 2022 Economic Forecast which showed that after a strong first half of the year, the EU economy has now entered a much more challenging phase.

The European Semester provides a framework for coordinating Member States' economic and employment policies. Since its introduction in 2011, it has become a well-established forum for discussing EU countries' fiscal, economic and employment policy challenges under a common annual timeline. It continues to play this role in the recovery phase and in advancing the green and digital transition.