EUROPEAN COMMISSION Brussels, 14.1.2020 COM(2020) 14 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A STRONG SOCIAL EUROPE FOR JUST TRANSITIONS

























1. Reinforcing Social Europe “People care about the future of our children and our society, and about fairness and equality in every sense of the word.” – - President Ursula von der Leyen In Europe, we have some of the highest standards of living, best working conditions and most effective social protection in the world. Being European today means having the opportunity to succeed and the right to a decent living. Social justice is the foundation of the European social market economy and is at the heart of our Union. It underpins the idea that social fairness and prosperity are the cornerstones for building a resilient society with the highest standards of well-being in the world, as reflected also in Europe’s ambition to progress towards fully meeting the United Nations’ Sustainable Development Goals. Europe today is a unique place where prosperity, fairness and a sustainable future are equally important goals. The digital economy of today and tomorrow must have people at its heart. It is expected that artificial intelligence and robotics alone will create almost 60 million new jobs worldwide in the next 5 years, while many jobs will change or even disappear. New technologies will generate new job opportunities and allow for more flexible work arrangements, but we need to make sure that new jobs are also quality jobs and that people are equipped with the right skills to take them up. The digital economy cannot rely on 20th century legal and social rulebooks; the time has come to adjust and guarantee social protection in the new world of work and adapt tax rules to ensure that everyone contributes their fair share. All Europeans should have the same opportunities to thrive - we need to preserve, adapt and improve what our parents and grandparents have built. Today, 241 million people in the EU have a job – a record high. However, this figure tells only one part of the story. The reality underneath is that inequalities persist and not everybody is benefitting from these positive developments. Too many still struggle to make ends meet or face barriers due to inequalities. Many children and young people, too often from disadvantaged socio-economic backgrounds, do not have access to quality education or healthcare. There are still many elderly without access to care services. Inequality is a brake on growth and threatens social cohesion. We need to act now so that our children and grandchildren will all have the possibility to benefit from a fair, green and prosperous future, and to ensure inter-generational fairness. The European Pillar of Social Rights is the European answer to these fundamental ambitions. It is our social strategy to make sure that the transitions of climate-neutrality, digitalisation and demographic change are socially fair and just. The European Pillar of Social Rights aims at bringing fairness to every citizen’s daily life, whether they are learning, working, looking for a job or in retirement; living in a city or in a rural area; irrespective of gender, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Proclaimed by all EU institutions in 2017, the 20 principles of the Pillar aim at improving equal opportunities and jobs for all, fair working conditions and social protection and inclusion. Implementing them upholds the commitment, made at the highest level, that people are at the centre, regardless of change, and that no one is left behind. 2. Equal Opportunities and Jobs for All

Empowering people through quality education, training and skills Skills are key for the future. Given increasingly frequent job changes and flexible working patterns, there is a constant need to learn and keep on learning in order to thrive. Skills allow people to reap the benefits from a rapidly changing workplace. Half of the current workforce will need to update their skills within the next five years. Yet, today, too many young people lack basic and digital skills and too few have a chance to catch up after leaving school. Only 1 adult in 10 engages in any training in any given month and 1 million vacancies for ICT specialists are holding back investments in the digital transformation. More than 50% of companies that recruited or tried to recruit ICT specialists in 2018 reported difficulties in filling vacancies. Education and training are key to skills. Member States must adapt the national education and training systems across Europe to provide inclusive, high quality education and training from early age, and support people as they take responsibility for their continuous development throughout the career. Further efforts need to be pursued to validate skills and competences that are acquired outside the formal education and training systems. Skills and experiences gained at the workplace, through volunteering or any other informal setting, if recognised and valued, can constitute important assets for people looking for a new job. To find out what skills we need, national and regional governments have to work with those who know best: employers, workers, teachers and trainers. In a volatile and changing job market, it is crucial that all people possess broad key competences that lay a good foundation for their capacity to adapt. In addition, strong partnerships between those who look for new talents and those who educate and train them, combined with modern forecasting techniques and graduate tracking, can guide what to learn and how. This is particularly needed in the regions that face population decline and where employers can no longer find skilled workers. This is also necessary for small and medium-sized enterprises (SMEs), the backbone of our economy. One quarter of European SMEs, report major difficulties in finding experienced staff and managers. And more generally, this is needed everywhere where the digital and green transitions will require new sets of skills. Vocational education and training as well as apprenticeships can foster employability of young people and adults alike and meet the changing needs of businesses. Such an investment in upskilling and reskilling will have a cost, which needs to be shared by the public sector, employers and individuals concerned. To place skills, employability and human capital centre stage, the Commission will update the Skills Agenda for Europe in the first quarter of 2020, including a proposal for a European Vocational Education and Training (VET) recommendation. Innovative solutions are also being explored to allow people to control their own learning and careers, such as an individual learning account for people of working age. Quality education and training creates equality of opportunities, and can break the cycle of low achievement. The European Education Area, to be a reality by 2025, will make it easier for learners to move across borders in Europe and will improve access to quality and inclusive education and training. In the third quarter of 2020, the Commission will further develop the objectives of the European Education Area and establish a new education and training cooperation framework with the Member States, including a strengthened focus on ensuring that young people complete at least upper secondary education and have sufficient proficiency in basic skills. Erasmus+ will continue to support and strengthen education, training, youth and sport in Europe, with a strongly reinforced budget for the period 2021-2027. For the future, the aim is to make this programme more easily accessible for young people with fewer opportunities, thereby making it more inclusive. By enlarging its take up among teachers, trainers and academics, its capacity to bring our systems closer together will increase, reaping benefits from sharing best practices. The Digital Europe Programme will be supporting advanced digital skills development to enable the deployment of these technologies throughout the economy as well as reinforce the digital capabilities of education providers. In supporting Member States’ action, in the second quarter of 2020 the Commission will also update the Digital Education Action Plan to boost the digital skills of both young people and adults, and to ensure that every educational organisation is fit for the digital age. Our young people are the future of Europe and deserve a bright future. Parents naturally want their children to have good jobs and career prospects. Still, too many young people often find only low wage, temporary and non-standard jobs where they cannot develop their talents and plan their future. Young people with disabilities, those with a migration background and young parents are at an even greater risk of falling behind. To step up the fight against youth unemployment, the Commission will present in the second quarter of 2020 its proposals to reinforce the Youth Guarantee that already helps 3.5 million young people each year to get in training, education or work. The new Youth Guarantee will reach out to young people, supporting them in developing skills and gaining work experience, in particular those relevant to the green and digital transitions. Supporting professional mobility and economic reconversion Everyone in Europe, young or old, should have access to timely and tailor-made support, including training, to improve chances of getting a quality job or starting a business. Almost every adult has looked for a job at some point in his/her life. Some people succeed straight after leaving school, and easily move from job to job thanks to a solid network and a proven track record. For others, it is much more difficult. They may lack information on job opportunities, may not be able to find a job that matches their skills and experience, or have difficult personal and family situations. Public and private employment services should not only support the unemployed, but increasingly those at risk of losing their job because of obsolete skills. The Sustainable Europe Investment Plan – European Green Deal Investment Plan presented today will contribute to the financing of the transition that Europe faces. Moving to a greener economy is likely to have a bigger impact in some regions and sectors than others. An integral part of the Plan is a Just Transition Mechanism, including a dedicated Just Transition Fund, which will support regions expected to be more affected by the transition and thus help ensure that no one is left behind. It demonstrates the EU’s commitment to see that environmental and social sustainability go hand in hand. Investments will develop new economic activities and create new jobs, reduce our carbon footprint, ensure affordable energy and reinforce new skills acquisition. In addition, the Modernisation Fund will allow a just transition in carbon-dependent regions by supporting the redeployment, re-skilling and up-skilling of workers, education, job-seeking and start-ups. Finally, to demonstrate solidarity with and offer support to displaced workers and self-employed, the European Globalisation Adjustment Fund can intervene. Creating more jobs The European economy is now in its seventh consecutive year of growth. The economy is expected to continue expanding in 2020 and 2021, even though growth prospects have weakened. Labour markets remain strong and unemployment continues to fall, though at a slower pace. Europe needs to build on this strong foundation to make sure that Europe’s Social Market Economy continues to create more and better jobs for all in the years to come. At the core of this transformation will be an industrial strategy to be presented in the first quarter of 2020 with strong foundations in the Single Market, enabling our businesses to innovate and to develop new technologies, boosting circularity and creating new markets. Addressing social and employment aspects is an integral part of the strategy, allowing all citizens, businesses, regions and cities to benefit from the industrial transformation. The Commission will also propose a specific strategy for small and medium-sized enterprises (SMEs) in the first quarter of 2020. They account for 85% of new jobs created in the last five years. Promoting innovation, ensuring financing and reducing red tape for SME’s is of vital importance for job creation in Europe. The European Regional Development Fund, the European Social Fund Plus and the Cohesion Fund will continue to play a crucial role in supporting social and territorial cohesion in our Member States, regions and rural areas and to keep up with the digital and green transformations of our world. The Commission’s proposal for the next multiannual financial framework (MFF) established the overall allocation for cohesion policy for 2021-2027 at EUR 373 billion in current prices. The European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund will also contribute to territorial cohesion. The Commission’s proposal also calls for an InvestEU Programme, expected to mobilise EUR 650 billion of investments, of which EUR 50 billion of social infrastructure projects and social investments into education and skills, social entrepreneurship and microfinance. InvestEU will also pioneer partnership models, as well as new business and finance models for improved social outcomes, unlocking the potential of investors’ and philanthropic capital. Creating more jobs is about more than growth. This is all the more true for the social economy, which serves social needs. Some 13.6 million people work in the social economy in Europe. Social enterprises and organisations can generate engagement, initiatives and returns in local communities while bringing everyone closer to the labour market. The social economy provides innovative solutions in education, health care, energy transition, housing and the delivery of social services. It can also be a pioneer in local green deals by creating alliances in territories involving citizens and enterprises in the climate transition. The Commission will launch in 2021 an action plan for the social economy to enhance social investment and social innovation and boost the potential of social enterprises to create jobs, including for those furthest from the labour market. Socially responsible public procurement can also ensure that existing funds are spent in a way that supports inclusion by for example providing job opportunities for people with disabilities or at risk of poverty. Fostering equality Our Union draws strength and unity from its diversity — of people, of culture and of traditions. But Europe can only move forward if it uses all of its assets, talents and potential. This means creating a fairer society in which those who share the same aspirations have the same opportunities to fulfil them. While our Union is home to some of the most equal societies in the world, there is still more work to do. Europe needs to strengthen its commitment to inclusion and equality in all of its senses, irrespective of sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Equality is high in the political agenda of this Commission, with for the first time an Equality portfolio in its own right and a new dedicated Task Force. The situation of women merits particular attention. Low levels of employment are bad for the economy and for women themselves. Despite higher levels of educational attainment, women have shorter and more fragmented careers than men, often due to responsibilities as carers. Their careers progress slower and their incomes and pensions are lower while they live longer. In some sectors, women are under-represented. This is the case for digital professions where not even one in five ICT specialists are women. Women receive on average only two-thirds of the pensions of men after retiring, an even larger difference than the pay gap. Fighting stereotypes in the world of work is essential to ensure women can advance in their careers and receive fair pay. Improved childcare and long-term care services are part of the solution to ensure care responsibilities are shared more equally between women and men. In the first quarter of 2020, the Commission will propose a new European Gender Equality Strategy to advance in closing the gender pay gap, including through binding pay transparency measures, and the pension gap, to promote women’s access to labour market and increase the number of women in senior positions in businesses and organisations. An economy that works for people is an economy that works for people with disabilities. The European Accessibility Act will bring opportunities to develop accessible products and services. Technology, together with adapted work and work places can open opportunities for persons with disabilities and for people and businesses catering for their needs. But people with disabilities continue to face difficulties in accessing education and training, employment, social protection systems and health care. They also often struggle to take active part in the political or cultural life of their communities. The Commission will pursue the implementation of the United Nations Convention on the Rights of Persons with Disability. The Commission will present a strengthened strategy for disability in 2021, building on the results of the ongoing evaluation of the European Strategy for Disability 2010-2020.

Quicker and more effective integration pathways for third country nationals can benefit them directly but also the labour market and society as a whole. Many Member States could make better use of their skills and qualifications and foster their access to inclusive and quality education and training. Building on the 2016 Action Plan on Integration, the Commission will boost its support to integration measures by the Member States and other key stakeholders such as local and regional authorities, civil society organisations and social partners. 3. Fair Working Conditions Workers in Europe should have a fair minimum wage that allows for a decent living. This does not mean setting the same minimum wage for every worker in the EU. Minimum wages should be set according to national traditions, through collective agreements or legal provisions. A well-functioning collective bargaining between employers and unions is an effective way to set adequate and fair minimum wages, as workers and employers are those who know their sector and their region the best. The Commission launches today a first stage consultation of social partners on how to ensure fair minimum wages for workers in the Union. Work is about more than making a living. A job gives you social relations and a place in society as well as opportunities for personal and professional development. This however is only true as long as you benefit from fair and dignified working conditions. New forms of work are developing fast, spurred mainly by digital technology. They contribute to growth and jobs, and drive innovative services, providing flexibility and opportunities for workers, self-employed, customers and businesses. Yet, they can also lead to new forms of precariousness. To build trust in the digital transformation and fully realise its potential, new business models need clearer rules that prevent abuses, maintain high standards for health and safety and ensure better social protection coverage. Technological innovation needs to go hand in hand with social innovation. The European way is a human way, an ethical way, and this must continue to shape our future. In particular, the sustainable growth of the platform economy requires improved working conditions of platform workers. A new Digital Services Act, to be presented during the second semester of 2020, will upgrade our liability and safety rules for digital platforms, services and products, and complete our Digital Single Market. At the same time, the Commission will also organise a Platform Work Summit to discuss priority issues and possible solutions, including for example employment status, working conditions and access to social protection of platform workers, access to collective representation and bargaining, as well as cross-border aspects of platform work. Digitalisation and new technologies are also changing the workplace. Workers in the EU enjoy high health and safety standards. Robots as well as digital tools can take over dangerous and monotonous tasks from humans. Still, change can also generate new concerns. New work patterns - constant connectivity, increased online and mobile work, human-machine interfaces, workers’ monitoring, recruitment and management by algorithms to mention just a few – can bring increased productivity that is vital to overall improvements in living standards, but should develop in ways that avoid new patterns of discrimination or exclusion or new risks to workers’ physical and mental health. In order to maintain its high standards, the Commission will review the occupational safety and health strategy and address these new risks alongside the more traditional ones, such as exposure to dangerous substances and risk of accidents at work. Fair working conditions are also about strong social dialogue: workers and employers can find joint solutions that best fit their needs. Strong, representative organisations and their timely involvement in policymaking both at national and European level are extremely important. The Commission will explore ways to promote social dialogue and collective bargaining and increase the capacity of unions and employer organisations at EU and national level. An effective dialogue at company level is also crucial, especially when companies are restructuring or undergoing significant change. As companies increasingly work across borders, we should make full use of existing instruments on workers involvement such as the European Works Councils to promote the culture of information and consultation of workers. For European citizens currently living or working in another EU country, fair working conditions means fair mobility. Compared to a decade ago, twice as many citizens live or work in another EU country today. Millions of businesses, notably SMEs, operate across borders. They benefit from the Single Market, a vital engine of growth and jobs. EU rules need to be fit for purpose to guarantee that all of this happens in a fair and transparent way and ensure fair competition among businesses, protect workers’ rights, and avoid double contributions and social dumping. The newly created European Labour Authority (ELA) will be a key tool to facilitate the application and enforcement of EU rules in this area, improving the functioning of the Single Market. It will provide to individuals and employers easy access to information on working or operating in another EU country, and support cooperation between national authorities, including on strengthening inspections, tackling undeclared work and fighting fraud. 4. Social Protection and Inclusion Securing high social protection To be resilient, the social contract needs to be rooted in strong solidarity. We need to do more to support those that lose their jobs because of external events that affect our economy, promoting their re-skilling and re-integration in the labour market. The Commission will propose a European Unemployment Benefit Reinsurance Scheme to protect our citizens and reduce the pressure on public finances during external shocks. Our social protection standards need also to be adjusted to the new realities of the world of work, new vulnerabilities and new expectations from citizens. In several Member States, some self-employed and persons in non-standard employment, do not have access to adequate social protection. Implementing the Recommendation on access to social protection will ensure that everyone is protected during unemployment, illness, old age, invalidity or in case of accidents at work, regardless of their employment status. Not leaving anyone behind also means access to affordable healthcare. Poorer people tend to live 6 years less than wealthier people. Promoting healthy lifestyles, better preventive measures and patient-centred healthcare can bring affordable healthcare of good quality to everyone. Designing social protection systems anchored to EU values and principles of universality, solidarity and fairness will require developing new and integrated models of health and social care. It will also allow taking the best of cost effective innovations and that address the actual public health needs. A patient-centred approach would help to achieve better results, such as not having to wait too long for treatment and being able to access care easily. An important ambition in this area is to make sure that Europe fights cancer, one of the biggest health concerns of this century and that endangers the lives of millions of Europeans. Europe is committed to take the lead in the fight against cancer. In February 2020 the Commission will launch a European-wide debate with a view to present, in the fourth quarter of the year, an ambitious Europe’s Beating Cancer Plan to help to reduce the suffering caused by this disease. Ageing challenges the adequacy of our social protection systems. Pensions could become the main source of income for a majority of Europeans. Improved longevity should coincide with allowing people to work for longer. Improved health and more attention to the needs of older workers in the workplace would make this possible. This would also contribute to maintaining the sustainability of pension systems, as would to the strengthening of occupational and third pillar pensions. Nonetheless, among those that grow older, some will need specific care. Securing access to affordable and quality long term care will be essential to support dignified lives in old age, while grasping the opportunities job creation offered by the care economy. Ageing is not the only demographic challenge. New household patterns such as higher number of single-person households, mobility to the cities leading to depopulation of rural areas, brain-drain or even migration flows all contribute to a changing demographic landscape in the EU. To map the current situation, the Commission will present a Report on the impact of demographic change in the first quarter of 2020. The report will then be followed by a Green Paper on ageing in the fourth quarter of 2020 to launch a debate on long-term impacts of ageing, notably on care and pensions, and on how to foster active ageing. Acknowledging that the green, digital and demographic transitions affect different people in different ways, the demography report will also be followed by a long-term vision for rural areas in 2021. This long term vision will aim at supporting rural areas to address their own unique set of issues, from ageing and depopulation to connectivity, the risk of poverty and limited access to services, social protection and healthcare. Fighting poverty and exclusion Leaving no one behind in an age of change means fighting poverty. Millions of people have been lifted out of poverty across the EU over the last decade, but despite our collective EU target to lift 20 million out of poverty by 2020, more than one in five Europeans still remain at risk. Living a life in dignity means getting the support needed to look for a job, being able to access affordable and quality health care, decent opportunities for education and training, affordable housing and affordable access to essential goods and services, including water, energy, transport and digital communications. For those out of the labour market, minimum income schemes, accompanied by enabling services, offer a last resort which should ensure a life in dignity. Real estate prices have increased across the Union making housing and housing costs less affordable for the majority of people. Homelessness, the worst effect of rising housing costs, is increasing in most Member States. Energy poverty and the difficulty to invest in modern cost saving solutions point to the need to be vigilant on new distributional challenges brought by the transition to a carbon neutral economy. For all these reasons, a wide reflection needs to take place to consider the multiple and interconnected causes of poverty, to reflect on the impact of different policy instruments and to rethink the way forward.