Employment, labour market and free movement of labour in the EU

JSM508 European social policy14 April, 2008

Liudmila, Antonio, Angela, Mirza (Group A2)

Overview

Employment/unemployment in the EU (what EU does about it and how efficient?)

Labour market, free movement of labour

What is employment/unemployment?

Employee – a person employed for wages or salary

Employment – the action of giving work to someone; person’s work or profession

Unemployed - without a paid job but available to work

Unemployment – the number or proportion of unemployed people

Oxford dictionary

Employment in Europe I Overall performance

Employment rates

2006 (%) Objective for 2010 (%)

Overall 64.3 70

Female 57.2 60

Older workers

43.5 50

Employment in Europe II (Commission’s Employment in Europe 2007 Report)

increased in all 27 Member States with over 4 mln youth unemployment - major challenge (behind

U.S., Canada, Japan) older workers employment rate is up youth and older workers are two problematic

groups inequalities in access to continuing vocational

training (CVT); government intervention needed labour income share is influenced by technological

progress, openness to trade etc. Not all skills categories benefit

flexicurity – can bring more and more secure jobs

Flexicurity

a combination of flexible labour markets and a high level of employment and income security

approach oriented less towards the protection of jobs, and more towards the protection of people

in line with the central elements of the EU strategy for growth and jobs

EU strategy I “Lisbon Strategy” 2000 - a new strategy to

modernize Europe focused on more and better jobs and growth. 2 main reasons:

to fight unemployment to cope with demographic change

Simplified and relaunched in 2005. 2 main targets by 2010:

total (public and private) investment of 3% of Europe’s GDP in research and development

raise employment rate to 70% (for women - 60%, for older workers - 50%)

EU strategy II - instrumentsINTEGRATED GUIDELIINES FOR GROWTH AND JOBS (2008-2010)

Employment guidelines (17) Implement employment policies aimed at achieving full

employment, improving quality and productivity at work, and strengthening social and territorial cohesion.

(18) Promote a lifecycle approach to work. (19) Ensure inclusive labour markets, enhance work attractiveness, and

make work pay for job seekers, including disadvantaged people and the inactive.

(20) Improve matching of labour market needs. (21) Promote flexibility combined with employment security and reduce

labour market segmentation, having due regard to the role of the social partners.

(22) Ensure employment-friendly labour cost developments and wage setting mechanisms.

(23) Expand and improve investment in human capital. (24) Adapt education and training systems in response to new

competence requirements.

EU strategy III – instruments 2

Mutual learning program – exchange of best practices in 4 main areas:

increasing adaptability of workers and enterprises;

attracting more people to the labour market;

investing more and more effectively in human capital;

ensuring effective implementation of reforms through better governance.

EU strategy IV - indicators

to assess Member States' progress in implementing the Employment guidelines

agreed on annual basis

for 2008 - two sets: 1. monitoring indicators, 2 analysis indicators

Indicators 2 Analysis indicators (selected ex.)

Employment impact of parenthood Dispersion of regional employment and

unemployment rates Employment in newly established enterprises Investment by enterprises in training of adults etc.

Monitoring indicators (some ex.) Employment/unemployment rate & growth Growth in labour productivity Gender pay gap Long-term unemployment rate etc.

How efficient? The disappearance of mass unemployment is not the

result of a shrinking pool of labour; in fact the average employment rate in the European Union has increased by more than 6 per cent in 10 years. This is the only area in which Europe is approaching the ambitious economic targets set at the Lisbon summit in 2000.

Financial Times, 01/16/2008

… the EU has created almost 6.5m jobs in the past two years and 5m more are expected by 2009. Average unemployment is expected to fall to below 7 per cent this year, the lowest since the mid-1980s. The Lisbon benchmark of getting 70 per cent of the adult population into work by 2010, which escaped the EU’s recent purge of targets, no longer looks impossible.

Financial Times, 03/07/2008

Labour Market and Labour Force Mobility

Part 2

General assessment Europe still has about twice the

unemployment rate of the United States There's a need for flexibility The old Europe has a problem The right to mobility for workers is one the

fundamental "four freedoms" of the European Treaty

Worker's mobility is a driver for the promotion of a comprehensive set of EU social legislation

Positive macro-economic effects

GDP growth

lower long-term unemployment

higher employment rates

Positive micro-economic effects

access to new cultures and languages

increased adaptability to a quickly changing work environment

increased job satisfaction

Fundamental Freedom Free movement of persons is one of the

fundamental freedoms guaranteed by community law (Article 39 of the EC Treaty) and is also an essential element of European citizenship

Community rules on free movement of workers also apply to member states of the European Economic Area (ie to Iceland, Liechtenstein and Norway)

The plan The first two-year period specified in the 2+3+2-

year scheme expired on 30 April 2006. The member states have to declare themselves again on this issue in May 2009.

Romania and Bulgaria joined the EU on 1 January 2007, their citizens are also be subject to a 2+3+2 scheme. This means that all labor movement restrictions between the EU's present 27 member states will be lifted by 1 January 2014. 

United Kingdom and the free movement

In 2004 together with Sweden and Ireland, the only one not to impose transitional measures on EU-8 workers in the first place.

Its open-borders policy led to an estimated labor immigration of 450.000 to 600.000 within the two-and-a-half years following the May 2004 enlargement; this amounts to about 30-fold of what was previously expected. In spite of the undoubtedly positive impact that the immigration of EU-8 workers

The UK government decided on 24 October 2006 not to apply a similarly liberal scheme to Romanian and Bulgarian job-seekers

Under the scheme announced, only a few experts and 20,000 unskilled workers for the food processing and agriculture industries will be allowed into Britain

EU Treaties and ReportsMay 1999 Amsterdam Treaty EU´ commitment to work together in the

field of JHA EU Council, Tampere I Comprehensive guidelines on

immigration and asylum policies on partnership with countries of origin.

November 2000 Communication on Community immigration policy March 2000 Lisbon Strategy

Goal: “to become the most competitive and dynamic knowledge- based economy in the world; sustain economic growth with more and better jobs and greater social cohesion”

July 2002 Danish Presidency, Copenhagen“Integration into the labour market "Conference

June 2003 Thessaloniki European CouncilRequest on Annual Report on Migration and Integration in

Europe July 2004 First EC Annual Report on Migration and Integration December 2007 Treaty of Lisbon member-states have an exclusive right to determine the

numbers of foreign nationals admitted to their territory and that cooperation on integration is upplementary and not about

the harmonization of laws.

The Polish Plumber 5-13000 people per year were

estimated on historic data, and in the worst case is not likely to be large

600000 of Polish workers came to Britain since Poland's accession to the European Union

The growth of British population is highest in 40 years, and has reached the 60 million mark

Chart 1: Migration to/from the UK

Chart 2: Country of origin of migrant workers

Chart 3: Reason for recruiting migrants

Chart 4: Most common A8 jobs

Positive aspect of migration

Britain benefited with an estimated 6 billion pounds to the nations economy in 2006

Inflation pressure was reduced by increasing supply of goods and services

Problems with the migration

As Poland's economy develops, immigration slows done, causing labor shortages in Britain

Not restricting themselves just to cities, migration caused problems in areas which are not used to migration

Pushing up housing costs and increasing crime rates

Brain Drain Britain is currently facing the biggest brain

drain in 50 years

3.247 million British-born people living abroad, 1.1 million are highly-skilled graduates

Poland in an effort to reverse the brain drain will not tax Polish workers who paid there taxes abroad since 2002

Circular migration A key dilemma facing EU governments is how to prevent

their migration policies triggering a so-called brain drain from poor countries.

On the one hand, EU governments want skilled immigrants to plug gaps in their local labor market. On the other hand, a country that loses its best and brightest is less likely to develop its economy, which might trigger future migration flows of the unskilled and illegal kind.

One way of addressing both issues is to encourage more ‘circular migration’.

This means helping migrants to move to-and-fro between their homelands and foreign places of work. In the end only Ireland, Sweden and the United Kingdom opened up their labor markets to workers from the ten new Member States.

Conclusion EUROPEAN MIGRATION PACT

The interior ministers of Britain, France, Germany, Italy, Poland and Spain meet every six months to strengthen practical co-operation between the EU’s largest domestic security and immigration services

These countries want the EU to adopt a ‘European pact on migration’ in October 2008, during the French presidency.

A European approach on migration, instead of 27 often contradictory immigration and asylum systems, one common system

Sources http://ec.europa.eu/employment_social/employment_analysis/employ_en.htm Joint Employment Report 2007/2008

http://register.consilium.europa.eu/pdf/en/08/st07/st07169.en08.pdf COMMUNICATION FROM THE COMMISSION TO THE SPRING EUROPEAN COUNCIL.

INTEGRATED GUIDELINES FOR GROWTH AND JOBS (2008-2010) http://ec.europa.eu/growthandjobs/pdf/european-dimension-200712-annual-progress-report/200712-annual-report-integrated-guidelines_en.pdf

http://www.cer.org.uk/pdf/briefing_813.pdf Freedom of Movement for Workers from Central and Eastern Europe: Experiences

in Ireland and Sweden. Report No. 5 May/2006 Publisher: Swedish Institute for European Policy Studies http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A6-2006-069+0+DOC+PDF+V0//EN&language=EN

http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0048en01.pdf http://www.ecas.org/file_uploads/1182.pdf Europe is caught mid-river in labour reforms, Tito Boeri, Financial Times,

01/16/2008 Europe must use its head to boost research, Bruno van Pottelsberghe, Financial

Times, 03/07/2008