Brussels, 21/01/2014 (Agence Europe) - Although unemployment is gradually dropping in the EU, the proportion of Europeans faced with poverty or social exclusion could remain the same. This is because today only one out of two jobs found makes it possible for the person hired to pull himself out of poverty. That is one of the main conclusions reached in the 2013 report on developments in the employment and social situation in Europe, published by the European Commission on Tuesday 21 January.
Employment and Social Affairs Commissioner Laszlo Ando, who presented the report to the press, was unable to describe social prospects for the year 2014 in a way that was in keeping with the general optimism expressed by those observing economic growth. The reason for this was that, although the eurozone may perhaps enjoy growth of a little over 1% in 2014, the benefits will be only marginal for most European citizens. Andor underlined from the outset of his presentation that: “even if unemployment is gradually reduced as currently projected, this may not be enough to reverse rising poverty, especially if wage polarisation continues, notably due to a rise in part-time work”.
The report, which is in its third edition, aims to “provide analytical underpinning to the European semester process, in particular to the preparation of the Annual Growth Survey 2014 and the Joint Employment Report”. The report may modify the forthcoming country-by-country recommendations on this. Changes may be necessary as the table for 2013 illustrates the fragility and the weakness of the European economy, while showing the inadequacy of public action and the almost “existential” risks that the eurozone faces.
A brief look at the main social indicators for 2013 gives a summary of what is at stake: long-term unemployment is constantly rising; structural unemployment and the imbalance between labour supply and demand is growing; jobs have continued to become more scarce (net losses); insecure work has increased, as has un-wished-for part-time work; and one quarter of Europeans face the risk of being poor or socially excluded, including a growing number of people who are, in fact, in employment.
A challenge for the eurozone lies behind these average trends. “Macro-economic instability” was the bugbear in the darkest hours of the sovereign debt crisis. The report just published adds to this that “still growing macroeconomic, employment and social divergences might jeopardise the functioning of EMU and thus core objectives of the EU as set out in the treaties” (to promote economic convergence and improve the lives of citizens in member states). The greater awareness of this new threat came about only recently with the decision to include a scoreboard during the European Semester giving social and employment indicators (the so-called “social dimension of the EMU”).
Far from being defeatist, the new Commission report recommends several solutions but these do not have the unanimity of member states as they often affect the very foundations of the way their social model works or run counter to the objectives of budgetary consolidation. Thus, in the current text, “it is more important than ever to examine the role of social protection expenditure as an economic stabiliser as well as ways to maximise its effectiveness and efficiency in terms of social outcomes achieved”, the Commission's summary indicates.
This “examination” of the role of social protection spending has in fact already been carried out and the report bases all its recommendations on a simple fact pointed out by Andor: “Job seekers receiving unemployment benefits are more likely to get a job than those who don't receive benefits”. According to the Commission, this entails the need to increase the proportion of unemployed people who benefit from “standard safety nets”, while developing those safety nets or rather by making them more standardised. The safety nets should thus be “well-designed (for example, with reducing generosity over time) and accompanied by appropriate conditions (job search requirements)”. Poland and Bulgaria are cited as counter-examples.
The conclusions of the report finally underline the importance of adjusting measures to be in line with the fragility of economic recovery. In order to ensure that recovery is lasting, it is necessary to “invest in jobs and people, improve labour market functioning, increase the effectiveness and efficiency of tax and benefit systems, support transitions away from unemployment and poverty, and restore socio-economic convergence within the EMU”. Andor then made a more concise summary, saying it is not enough to just create jobs but to create quality jobs, jobs that will draw people out of poverty. (JK/transl.jl)