The Employment and Social Situation in the EU

Transcription

1 The Employment and Social Situation in the EU Oslo, 8 April 2013 László ANDOR EU Commissioner for Employment, Social Affairs and Inclusion

2 Unemployment rates in Europe and the US EU Euro area US Source: European Commission

3 Rising long-term unemployment Evolution of long-term unemployment rates* across the EU between 2007 and (third quarter) 2012 (third quarter) * People unemployed for more than 12 months as a % of the active population Source: European Commission

4 Striking North/South Divide Unemployment rates (%)

5 Poverty and social exclusion on the rise Change in the risk of poverty or social exclusion and its three components in Member States between 2008 and 2011

6 The financial distress of low-income households kept increasing in 2012 Reported financial distress in EU households by income quartile of households ( )

7 Dynamics of poverty: Risk of long term exclusion in some MS Low entry & low exit rates framework favourable risk of social polarisation High turnover of poverty framework favourable does not exclude risks of recurrence risk of 'core bulk permanently poor' High entry & low exit rates risk of massive poverty trap , EU-SILC, population

8 Weakening of stabilisation of household incomes in the crisis Contributions to nominal growth of gross disposable household income (EA 17) Benefits GHDI Source: Eurostat and ECB.

9 Household income developmentsin different countries After 2010 Germany: Market incomes increase again with recovery; benefits not needed anymore After 2010 Spain: Weakened social benefits do not compensate for ongoing falling market incomes

10 Weakening of Automatic stabilisation: 2011 and 2012 Public social expenditure and GDP: deviations from the trend in current and past recessions Source : Eurostat, National Accounts, DG EMPL calculations Note: 2012 data are estimated based on quarterly data from the first 3 quarters. In the current recession, N is year Estimates of the deviation from the trend in social protection expenditures are based on a standard Hodrick-Prescott filter. Reading notes : in the year of the recession, in the current crisis, social expenditure were around 5% above their trend in Europe, while the GDP was about 4% below its potential (output gap of -4%). Averages are unweighted country averages (since countries do not always experience a recession the same year).

11 Which policies help the unemployed back to work? Better macroeconomic conditions & policies supporting job creation ACTIVATION Participating in lifelong learning (LLL) PROTECTION Receiving benefits % of unemployed returning to work % unemployed returning to work /to inactivity after 1 year Source: EU-LFS longitudinal data DG EMPL calculations.

12 More accessible childcare leads to greater female employment rates Share of children aged 0-3 in formal childcare and employment rates of women with young children (2010)

13 Room for efficiency gains in social protection spending

14 Wages: both external and internal demand effects matter Case of REER (external competitiveness) vs. RULC (labour income share) Real Effective Exchange Rates (REER) and employment growth ( averages) Real Unit Labour Cost (RULC) and employment growth ( averages) Source: DG EMPL calculations based on Eurostat Source: DG EMPL calculations based on Eurostat

15 Minimum wages and employment Correlation of minimum wage and employment rate of low skilled (2010)

16 Employment, Youth and Social Investment packages

17 Employment Package April 2012 A reinforced medium-term agenda for EU and Member States' action to bring about a job-rich recovery Employment as a driver of growth: Stimulating labour demand through well-designed measures (e.g. lowering taxes on low-paid labour; boosting green economy, white jobs, ICT jobs) Balanced reforms for more inclusive, dynamic and resilient EU labour markets Investing in skills and in transnational labour mobility Strengthening the employment & social dimension in EU governance, by involving Social Partners more closely in decision making

18 Youth Employment Package Dec 2012 Council recommendation on establishing a Youth Guarantee Quality framework for traineeships European Alliance for Apprenticeships Mobility of young workers

19 Social Investment Package - Feb 2013 Reducing poverty and exclusion + improving labour market functioning: Developing human capital gives people the skills & capabilities to participate in society Empowering & supporting people in crucial stages of life, starting in childhood Prevention keeps larger economic and social costs from arising in the future Social investment framework - 3 integrated pillars 1. Increase the sustainability and adequacy of social systems through simplification and better targeting 2. Pursue activating and enabling policies through targeted and more effective support - Help prepare for (re)entry into the labour market, promote inclusive labour markets, provide adequate income support 3. Social Investment throughout the individual's life

20 Social dimension of (genuine) Economic and Monetary Union Single currency must be understood not as goal in itself but instrument to promote prosperity & social progress Maximizing adjustment capacity (internal devaluation) regardless of employment & social impact workable strategy Systemic crisis needs systemic solutions: banking union, fiscal union, social union Employment & social crisis in part(s) of EMU has negative spillovers on whole EMU: falling internal demand, loss of human capital, political instability & uncertainty on fin. markets Need to restore socio-economic convergence in EMU Detecting & addressing key empl & social problems Closer coordination of employment & social policies, based on standards or policy benchmarks Fiscal objectives must be reconciled with empl & social ones

21 Questions?