# IMMC.EESC-2018-01711-AC.ENG.xhtml.EESC-2018-01711-00-01-AC-TRA-EN.docx

EN
European Economic and Social Committee SOC/575 Employment opportunities for economically inactive people OPINION
European Economic and Social Committee
Employment opportunities for economically inactive people
[own-initiative opinion] Rapporteur: José CUSTÓDIO LEIRIÃO (PT-III) Plenary Assembly decision
15/02/2018 Legal basis
Rule 29(2) of the Rules of Procedure Own-initiative opinion Section responsible
Employment, Social Affairs and Citizenship Adopted in section
13/02/2019 Adopted at plenary
20/03/2019 Plenary session No
542 Outcome of vote (for/against/abstentions)
99/20/6
1. Conclusions and recommendations 1.1 The EESC notes that a substantial part of the population is still neither working nor included in unemployment statistics, yet carries significant potential for employment and wealth creation, and urges the Commission and the Member States to place a strategy for dealing with the significant number of economically inactive people at the forefront of their political priorities. 1.2 As economic recovery is gaining momentum in Europe, the EESC believes that the Commission and the Member States must also focus their efforts on reactivation policies and policies to create job opportunities for all, in particular those who are most excluded from the labour market and who want and are able to work. 1.3 Given that the general recommendation on the active inclusion of people excluded from the labour market was issued in 2008 1 , and in order to avoid a piecemeal approach, the EESC recommends that the Commission assess the progress made and, if needed, adopt a new, comprehensive strategy, accompanied by action plans and objectives assigned to the Member States for each sub-group of economically inactive people. This strategy should include increased social innovation and more specific details on policies for achieving results, and display greater ambition when it comes to integrating into the labour market those members of this population who want to work. 1.4 The EESC recommends that the European Commission encourage Member States to make their active labour market policies more effective and to ensure that their public employment services are able to provide more targeted assistance for people willing to be included in the labour market, by taking into account their abilities and ambitions. 1.5 In order to ensure evidence-based policies, the EESC also recommends to Member States to collect and analyse information on this population, including the various characteristics of its sub-groups, these people's motivations for working, the type of work they would like to do and their abilities, so that supply and demand can interact more easily and help fulfil the aspirations of each sub-group of the economically inactive population who want to work. 1.6 If we take a closer look at the persons with disabilities sub-group, particularly from a social and employment-related perspective, despite a certain amount of improvement between 2011 and 2016, the disadvantages remain, and this population continues to lag significantly behind in terms of employment and quality of life. The EESC believes that concerted efforts are needed, particularly regarding access to higher education and special conditions for health services, in order to boost employment opportunities for disabled people with a low level of education. Furthermore, the EESC urges the EU Member States to establish an employment quota system for persons with disabilities, to be applied in public institutions/enterprises and in private sector enterprises in line with their employment size and sales turnover. 1.7 Given the broad heterogeneity of the inactive population and the multiple barriers they face, their (re)integration into the labour market is a challenge that must be tackled by all Member States. The EESC believes that it is crucial for policy-makers in each Member State to fully know and understand these barriers and the specific nature of each sub-group, while at the same time taking into consideration the issue of gender balance when designing public policies and/or other initiatives, in order to deal with these challenges effectively (for example, by increasing the availability of childcare, which is a prerequisite for freeing up the people in question from family care duties and enabling them to take their place in the labour market). 1.8 Furthermore, the EESC deems it essential that Member States improve the interconnection between local employment services, municipalities and social security services in order to improve the chances of reaching this population and encouraging them and attracting them to work. 1.9 The EESC recommends that Member States create specific activities, if necessary within local public services (municipalities), that are appropriate to upgrade and update the skills and competences of the economically inactive population and other excluded groups, to be included in the labour market by taking into account their abilities.
1.10 Given that the economically inactive population includes many people with the potential for normal integration into the labour market, the EESC urges the Commission and the Member States to create specific and favourable incentives for companies to employ such economically inactive people. This could be achieved through the introduction of legislative and non-legislative measures ensuring that the European Social Fund covers the full costs of training these people, thus making it possible for companies to employ them. At the same time, it is also crucial for the European Union to encourage Member States to promote attractive working conditions, decent wages and social security systems to motivate the inactive population to participate in the labour market and in the creation of wealth and economic, social and environmental well-being. 1.11 Trust in the European Union and the sense of belonging to it also depend on the capacity of the EU institutions to effectively promote the inclusion and well-being of all citizens, while also respecting their diversity. 1.12 The EESC calls on the Commission and Member States to ensure that Industry 4.0 policies and the development of new technologies respect the changes in the world of work, bringing benefits for both workers and companies. 1.13 The EESC proposes reducing the number of weekly working hours, starting with public services, thus creating more employment opportunities for everyone. 2. Introduction 2.1 According to the International Labour Organization (ILO), people are considered to be economically inactive if they are not working, not seeking work and/or not available for work. The aim of this opinion is to draw the Commission's and the Member States' attention, when active employment policies are being framed, to the specific needs of these people, who have been marginalised, excluded and neglected by policy-makers and yet who want to be integrated into society through their activity and work in order to contribute to wealth creation and economic, social and environmental well-being. 2.2 Efforts are made, including by states, businesses, employers' organisations, trade unions and education and training institutions, to develop partnerships, so as to create an inclusive labour market and ensure that the adjustment of skills levels keeps pace with technological change. However, these efforts have yet to achieve their desired aims, as shown by the thousands of job vacancies that continue to be unfilled due to the mismatch between supply and demand, causing major imbalances in the labour market. This imbalance is damaging to productivity, competitiveness and potential growth. At the same time, barriers to employment have been formed, leading to the exclusion of many thousands of people from the labour force. This has, for example, led to long-term youth unemployment, leaving a large number of people of all ages with only a tenuous connection to the labour market, thus contributing to a significant increase in the size of the economically inactive population, including those classified as NEET. 2.3 More than one in four people aged 15-64 in the EU are classified as being inactive 2 . They are not included in official employment statistics and are often economically and socially marginalised; as a result, they do not have the resources or opportunities to participate fully in society. This is despite the fact that, for the most part, they want to work 3 . 3. General comments 3.1 Raising employment levels and creating more and better jobs remain key goals for the EU. All the Member States endorse the European Employment Strategy, which is implemented through the European Semester, the annual process promoting close policy coordination among EU Member States and EU Institutions. 4 Policy-makers have, for good reason, focused on people who lost their jobs in the aftermath of the financial crisis, trying to find clear ways to create jobs. The Commission has placed special emphasis on initiatives for youth such as the Youth Guarantee (2013) 5 , the Youth Employment Initiative (2015) 6 , and a new EU Youth Strategy for 2019-2027 (2018) 7 . Another bold initiative led to the Council recommendation of 15 February 2016 on the integration of the long-term unemployed into the labour market 8 . The EESC supports and welcomes these initiatives, which are in line with the European Pillar of Social Rights.
3.2 While the supply and demand of jobs and the working or temporarily unemployed population are frequently the subject of studies and of a range of discussions and strategies on active employment policies, the inactive population is very rarely studied or researched. One of the first Commission documents explicitly recognising people in this situation was Commission Recommendation 2008/867/EC of 3 October 2008 9 , addressed to Member States, on the active inclusion of people excluded from the labour market; it recommended various types of strategies aimed at this population in order to facilitate their integration into the labour market. In April 2017, the Commission published a Commission Staff Working Document 10 which assessed the extent to which each Member State had developed a more integrated approach to active inclusion policies. The conclusion was that progress in implementing the recommendations varied among Member States, national strategies diverged very significantly from one another, and the results of their implementation had been very poor. Since 2008, there have been no other Commission initiatives targeting this specific population. The EESC recommends that the Commission publish a new, comprehensive strategy, accompanied by action plans and objectives assigned to the Member States for each sub-group of economically inactive people. 3.3 Characteristics of the inactive population 3.3.1 Inactive people form a sizeable group, meaning that in most EU Member States a substantial part of the population is not working and is not included in unemployment statistics either, yet these people nevertheless have the potential to work. Although active employment policies in the EU tend to focus mainly on temporarily unemployed people, the EESC believes that an additional effort must be made to create employment policies that explicitly target this inactive population. 3.3.2 The inactive population is heterogeneous. Eurofound 11 has, in particular, studied four main sub-groups: people who report that they are in education (such as young people), homemakers, retired or disabled. These marginalised sub-groups vary greatly in terms of their characteristics and the barriers they face, related to health, personal life, level of education and training, need for guidance and work placements. Indeed, lack of work experience is the most common characteristic among young people and homemakers, and least common among disabled people and retirees of working age. On the other hand, disabled people and retirees more often report having a health problem and also refer to a high level of exclusion (similar to that of long-term unemployed people). Inactive people often face multiple barriers to employment. Many inactive people would like to work in some capacity: about four out of five say they would like to work at least some hours per week, and approximately half would like to work 32 hours or more 12 . This leads us to the conclusion that economically inactive people are looking for work that is both fair and relevant, and which lasts more than just a few hours per week; this latter point may also indicate that they might be in a difficult situation financially. The EESC feels that this positive desire to work should encourage policy-makers to design policies and initiatives that respond effectively to the characteristics of each sub-group. 3.3.3 It is also necessary to clarify the situation of inactive people once they exercise their right to mobility. According to data from the European Commission (2014), out of the total European population that exercise their right to mobility in the EU (14.3 million), about 3.7 million people are economically inactive. About 80% of economically inactive citizens enjoy the same rights (residence) and other benefits as the economically active family members with whom they are living in the host Member State, and are entitled to the same treatment as the family members of local employees. However, the remaining 20% are affected by a lack of clarity and transparency as regards their right to claim certain social benefits in the host Member State. The EESC calls on the Commission to give urgent thought to this lack of social support and to produce legislation to remedy this omission. 4. Background 4.1 Eurofound's report entitled "Reactivate: Employment opportunities for economically inactive people" 13 highlights some of the key barriers for the four sub-groups of the inactive population considered (people who report that they are in education – such as young people, homemakers, retirees of working age and disabled people). Lack of work experience is the most commonly cited reason among young people and homemakers, and is a minor issue for people with disabilities and retirees of working age, who generally report having a health problem. Around half of the disabled sub-group report a high level of social exclusion, which is common in several Member States, where a large number of economically inactive people face multiple barriers in accessing the labour market; this contributes to making active employment policies more challenging and complex. 4.2 On the other hand, it is not certain that economically inactive people are registered with local employment services, which greatly hampers the efforts of these services to locate the people in question and offer them job opportunities. The EESC supports all the initiatives to encourage these people to register with local employment services. It recommends putting in place, within public services, a specific structure responsible for coordinating and facilitating the monitoring of inactive people and their registration with the local employment services, which would propose measures and attractive programmes matching the specific needs of these people. It is clear that the challenges faced by the local employment services are very complex due to the complexity of labour markets, where job opportunities are still scarce for people who have been out of the labour market for a long time. The result of all this is a heavy workload and a great deal of stress for local employment services. 4.3 Policy-makers in the Member States must also recognise the challenges that local public employment services face in reaching out to the economically inactive population, meeting their complex needs and understanding the many ways in which they are vulnerable. A strategy and associated action plans are needed for each sub-group in order to effectively and successfully secure jobs for people who are looking for work and who want to work and contribute to the creation of wealth and social and environmental well-being in society. 4.4 Among the key challenges that need to be addressed are, for example:
There is a lack of public services to care for people who are under-age or dependent, so as to facilitate access to the labour market for those employed in domestic tasks (mainly women). a) Economically inactive people should have an access to further training and reskilling projects and receive unemployment benefits at the same time. b) There is a need to facilitate, support and promote, with specific and effective measures, the integration of people with disabilities who require more specific employment plans and support schemes. c) There is also a need to pay particular attention to other vulnerable groups such as migrants and people connected with the Roma programme. d) Of course, many people, for various reasons, give up and no longer register with employment services, and these services therefore need to reconnect with the people concerned and thus reactivate the possibilities of their finding employment. e) It is clear that at the level of public employment services, more and better work is needed in the Member States, yet this is clearly a task for which many local employment services do not currently have the capacity; officials should therefore be hired who have the right skills for finding jobs for those who are both looking for work and want to work. f) Some EU Member States can certainly offer examples of best practice in resolving these difficulties, which should be replicated throughout the European Union. g) Increasing wages to a decent level is also crucial in the EU. 4.5 Labour markets are changing; structural reforms of labour markets have led to high levels of diversity and new forms of work. Atypical workers experience lower job quality and higher in-work poverty risks 14 . In 2017, 13.7% of workers in the EU were self-employed 15 , 11.3 % were temporary workers 16 and 18.7% were part-time workers 17 . Member States, with the support of appropriate programmes set up by the European Union, need to: increase their investment in education - high quality investment in the economy that has a multiplier effect - thus improving education in science, engineering, technology and mathematics, based on fundamental values and rights reintroduced by the Pillar of Social Rights. The economically inactive population must be included, supported and protected, in accordance with the specific needs of the respective sub-groups, in order to successfully address and incorporate these changes. The EESC recommends the creation of a genuinely more inclusive labour market. 4.6 Barriers to employment for the economically inactive population 4.6.1 People of working age (aged 15-64) with no or only a tenuous connection to the labour market face several barriers to employment that prevent them from being fully engaged in employment activities. A thorough and deep understanding of these barriers is a prerequisite for designing and implementing appropriate labour market intervention policies so that they are well targeted and appropriately tailored to the circumstances of the various recipients. Below we identify certain challenges in identifying barriers to employment. Precise and accurate information and analysis are needed in order to understand these barriers, yet this is virtually impossible at the moment for the following reasons: a) current aggregate labour market indicators contain little relevant information and no clear link to the economically inactive population or the problems that need to be addressed, and are largely based on the individual rather than the family context; b) the main focus is limited to the registered unemployed; c) there is very limited information about health problems, caring responsibilities or incentives.
4.6.2 The most common types of barrier are: a) no recent work experience; b) low levels of education and skills; c) very limited or no work experience; d) limitations in terms of health; e) family care responsibilities; f) few job opportunities; g) never having been in paid employment; h) the existence of discrimination because of age, gender, disability, etc. and the human resources policies of some companies. 4.6.3 Tools need to be adopted that will increase visibility and motivation for job-seekers and help them to achieve success in their search for employment. These could include: a) careers advice; b) a web portal for vacancy notices and job opportunities; c) references and information provided directly to those involved; d) mobility support devices; e) vocational training programmes; f) possible subsidies for employers.
4.7 Member States often seek to explain individual circumstances and labour market difficulties by deploying powerful statistical tools which use administrative information to reveal the profile of individual applicants. Such tools are useful for adopting an individualised approach and offering employment programmes to people registered at job centres. These tools rely on the quality of administrative information, which has distinct advantages, but tends to cover only a subset of the non-working population, such as the registered unemployed. As a result, sophisticated tools for constructing profiles based on this information typically cannot be used to provide a broader perspective on barriers to employment for those who have no or very tenuous links to the labour market. 4.8 Understanding the barriers to employment is not only important when it comes to connecting the services provided by the various institutions; it is also essential for identifying the groups that can make use of the employment programmes and the benefits relating to them, and that are not currently considered as "clients" with regard to the jobs and benefits offered by these institutions. The EESC therefore urges the Commission (in cooperation with the OECD or independently) to put together statistical models which cater for the specific nature of the economically inactive population, so that they can be successfully included in active employment policies. 5. A common European strategy for dealing with technological change and making society more inclusive for all Europeans, including the economically inactive 5.1 The Commission and Member‐States should focus on all the measures that need to be implemented in order to achieve better integration into the labour market for each sub-group of economically inactive people 18 , not only those related to training and skills. These could include: a) the development of adequate, high-quality public social welfare services to meet care needs (especially for children and the elderly) in order to free up those who want to work (mainly women) so that they can do so without worrying - something which is currently not possible due to their family obligations 19 ; b) effective monitoring and evaluation of the impact of public policies to put the economically inactive population back in work, for example: 1. effective evidence (identifying barriers and mapping how they relate to existing policies), 2. implementation (addressing implementation challenges, facilitating coordination and cooperation among stakeholders), 3. monitoring and evaluation policy (estimating short-term and long-term effects; analysing results beyond the likelihood of employment and including aspects relating to job quality; identifying what works and for whom); c) increasing inclusive growth and well-being through the following dimensions of labour market performance: more and better jobs; inclusivity; resilience and adaptability; d) The Commission and Member‐States should adopt the "3Ps" (policy principles): 1. promote an environment in which quality jobs can thrive, 2. prevent exclusion in the labour market and protect individuals against risks involved in that market, 3. prepare for future risks and opportunities that may emerge in the labour market; e) creating jobs in municipalities that are appropriate to the qualifications of economically inactive workers residing in those municipalities, i.e. creating jobs in line with the skills of economically inactive people and improving their performance through appropriate training courses;
f) creating an environment conducive to strengthening social dialogue (with social partners) at all appropriate levels, while respecting the autonomy of the social partners and collective bargaining, as well as the dialogue with other relevant civil society organisations 20 . 5.2 The strategy must not benefit only those who already have jobs; special attention should be paid to young NEETs and anyone else who is economically inactive, as they are symptomatic of a dual threat, i.e. both a social problem and a situation that exacerbates the lack of qualified workers. This is because, as they are not working, they have no opportunity to gain practical experience and, as they are not studying, they do not have the opportunity to acquire more appropriate academic qualifications, thus running the risk of becoming totally disconnected from the labour market. It is a paradox that the most qualified generations are not necessarily the best prepared for the needs of the labour market of their day. The European Union and the Member States must not allow the most qualified generation ever to be left behind. 5.3 Employers claim that they find it difficult to find skilled workers, which is an obstacle to potential growth and new industrial investment, causing European businesses to continue to lose competitiveness and to fall further behind 21 : the lack of skilled labour to meet today's demand may lead to a lack of demand for tomorrow's skilled young workers. 5.4 A bridge needs to be built to improve the link between education/training and skills acquisition 22 , on the one hand, and the current and future reality of labour market needs on the other, in order to fill the structural gap that we are seeing today. This includes: a) focusing on transferable skills; b) improving the link between education and training institutions, employers and trade unions; c) raising awareness about job opportunities and associated requirements among young people and other unemployed people affected by lack of work; d) fostering partnerships between education and training institutions, businesses, employers, the public sector, trade unions and NEETs themselves, as well as other economically inactive groups (including migrants 23 ); e) developing a specific action plan for each sub-group of the economically inactive population, monitoring and evaluating its implementation, correcting any deviations; f) reducing weekly working hours, starting with the public services, and creating job opportunities for all. 5.5 The fourth industrial revolution and digitalisation are potentially the last chance for the European Union to catch up with its major competitors through investment and appropriate strategies and action plans, and to shift definitively to a knowledge-based economy and full employment, as provided for in the 2000 Lisbon Strategy. If we fail to do this, it may lead to a decline at the various levels of European society as well as in its productive infrastructure, not to mention the fundamental values that we all most certainly wish to maintain. 5.6 Commitment is needed in order to achieve this goal; in other words, a type of cooperation involving the EU institutions, Member States, national and local governments, trade unions, employers' associations and businesses and other civil society organisations, each and every one shouldering their own responsibilities and collectively becoming the driving force that provides every European with the opportunity to work and participate in the creation of wealth and economic, social and environmental well-being. To sum up, the EESC urges all institutions (European and national, public, government, municipal and private) to implement public policies that are inclusive, rather than restrictive as has been the case over the last twenty years and has led to the exclusion of many millions of economically inactive people, contributing to the distancing of civil society from the European institutions and jeopardising the future of Europe. Brussels, 20 March 2019
Luca Jahier The president of the European Economic and Social Committee * *
- N.B.: Appendix overleaf. APPENDIX to the OPINION
of the
European Economic and Social Committee The following amendments, which received at least a quarter of the votes cast, were rejected during the discussions (Rule 59(3) of the Rules of Procedure): Point 5.4
Delete bullet point f): 5.4
A bridge needs to be built to improve the link between education/training and skills acquisition 24 , on the one hand, and the current and future reality of labour market needs on the other, in order to fill the structural gap that we are seeing today. This includes: (...) f)
reducing weekly working hours, starting with the public services, and creating job opportunities for all." Reason: Reducing the number of weekly working hours is not the right way to solve the issue of employment opportunities, nor is it a forward-looking approach. The world of work in the 21st century is changing. Technological changes and new forms of work are offering new opportunities and ways of including inactive people in the labour market. Moreover, the debate in the SOC section showed that there have also been negative experiences in the Member States where such measure have been applied. Outcome of the vote: In favour: 42 Against: 63 Abstentions: 5 Point 1.4 Amend as follows: 1.4.
The EESC recommends that the European Commission encourage Member States to make their active labour market policies more effective and to ensure that their public employment services are able to provide more targeted assistance for people willing to be included in the labour market, by taking into account their abilities, and ambitions and the current labour demand.
Reason: The role of targeted assistance is to talk to individuals about their abilities and ambitions, but also to explain the labour market situation to them and highlight their best options for training or requalification. Outcome of the vote: In favour: 28 Against: 66 Abstentions: 6 _____________
(1) Commission Recommendation of 3 October 2008 on the active inclusion of the people excluded from the labour market (2008/867/EC) (
OJ L 307, 18.11.2008, p. 11
).
(2) 26% of the population (EU 28) aged 15–64 was inactive in the third quarter of 2018, according to Eurostat data, extracted in January 2019.
(3) Eurofound (2017),
Reactivate: Employment opportunities for economically inactive people
, Publications Office of the European Union, Luxembourg.
(4) See European Commission
web page
on the European Employment Strategy.
(5)
OJ C 271, 19.9.2013, p. 101.
(6)
OJ C 268, 14.8.2015, p. 40.
(7) COM(2018) 269 final, Opinion on A new European Union Youth Strategy
OJ C 62, 15.2.2019, p. 142
.
(8)
OJ C 67, 20.2.2016, p. 1.
(9)
OJ L 307, 18.11.2008, p. 11
.
(10) COMMISSION STAFF WORKING DOCUMENT on the implementation of the 2008 Commission Recommendation on the active inclusion of people excluded from the labour market (SWD(2017) 257 final).
(11) Eurofound (2017),
Reactivate: Employment opportunities for economically inactive people
, Publications Office of the European Union, Luxembourg.
(12) Eurofound (2017),
Reactivate: Employment opportunities for economically inactive people
, Publications Office of the European Union, Luxembourg.
(13) Eurofound (2017),
Reactivate: Employment opportunities for economically inactive people
, Publications Office of the European Union, Luxembourg.
(14) Draft Joint Employment Report from the Commission and the Council accompanying the Communication from the Commission on the Annual Growth Survey 2019 (
COM/2018/761 final
).
(15) Age 15 – 64; data from the Draft Joint Employment Report from the Commission and the Council
COM/2018/761 final
.
(16) Age 20 – 64; data extracted from Eurostat, February 2019.
(17) Age 20 – 64; data extracted from Eurostat, February 2019.
(18)
OJ C 237, 6.7.2018, p. 1
,
OJ C 125, 21.4.2017, p. 10
.
(19)
OJ C 129, 11.4.2018, p. 44
, Opinion on Gender equality in European labour markets,
OJ C 110, 22.03.2019, p. 26
.
(20) Opinion
SOC/577
on Social dialogue for innovation in digital economy, not yet published in the OJ,
OJ C 125, 21.4.2017, p. 10
.
(21)
Study
: "Skills Mismatches – An Impediment to the Competitiveness of EU Businesses".
(22)
OJ C 125, 21.4.2017, p. 10
, Opinion SOC/588 on "Education package",
OJ C 62, 15.2.2019, p. 136
,
OJ C 81, 2.3.2018, p. 167,
OJ C 440, 6.12.2018, p. 37
,
OJ C 173, 31.5.2017, p. 45
,
OJ C 173, 31.5.2017, p. 1
.
(23) Information report
SOC/574
on "The costs of non-immigration and non-integration",
OJ C 264, 20.7.2016, p. 19
.
(24)
OJ C 125, 21.4.2017, p. 10
, Opinion on "Education package",
OJ C 62, 15.2.2019, p. 136
,
,

OJ C 440, 6.12.2018, p. 37
,
OJ C 173, 31.5.2017, p. 45
,
OJ C 173, 31.5.2017, p. 1
.