COMMISSION OF THE EUROPEAN COMVKJNITIES 
C0M(93) 238final 
Brussels, 26 May 1993 
COMMUMITY-WIDE FRAMEWORK FOR EMPLOYMENT 
(presented by the Commission) 
COMMUNITY-WIDE FRAMEWORK FOR EMPLOYMENT 
1. INTRODUCTION 
2. THE SCALE AND NATURE OF THE EMPLOYMENT PROBLEM 
2.1. Unacceptable levels of unemployment 
2.2. Low rates of employment 
3. THE EMPLOYMENT-INTENSITY OF GROWTH 
3.1. Comparisons within and outside the Community 
3.2. Government actions 
3.3. Community support 
4. NEW FRAMEWORK FOR ACTION 
4.1. Objectives 
4.2. Means 
4.3. Commission role 
4.4. Issues for analysis and action 
4.5. Timetable 
4.6. Procedures and organisation 
5. CONCLUSIONS 
/VA 
COMMUNITY-WIDE FRAMEWORK FOR EMPLOYMENT 
1. INTRODUCTION 
A high level of employment across all Member States and regions 
is a fundamental objective of the Community. Directly or 
indirectly, Community policies - the Internal Market, economic 
and monetary integration, the policies developed through the 
Structural Funds and the successive research and development 
framework programmes, co-ordinated policies in some areas, the 
pursuit of common objectives in others - have all made 
significant contributions to the goals of competitiveness, 
economic growth and employment. 
Unfortunately, while the Community has grown in economic strength 
with increased integration and cohesion, progress on employment 
and unemployment has been less satisfactory, particularly in the 
last two years. Concern about the issue has been expressed 
through a number of political positions which have been taken up 
at Community level. In particular: 
the Council of Employment and Social Affairs Ministers passed 
a resolution in December 1992 on Action against unemployment; 
the European Parliament produced a report on the post-1992 
European Labour Market in 1992; 
the European Social Partners have agreed a series of joint 
opinions in support of economic growth and improvements in the 
labour market, notably that of July 1992 on a Joint 
Cooperative Growth Strategy. 
Most recently, the ECOFIN Council has supported the Commission's 
economic growth initiative - promoting economic recovery in 
Europe - launched at the Edinburgh 1992 Summit. The growth 
initiative ranges across a series of areas - public expenditure, 
private investment, support to small and medium sized firms, 
additional training, wage moderation and structural reforms. 
The Commission has also prepared a major revision of the European 
Social Fund in order to strengthen its role in the fight against 
unemployment, and has continued to improve its analysis of 
employment issues through the annual Employment in Europe 
reports. 
In the Informal meeting of the Ministers of Employment and Social 
Affairs on 3 and 4 May 1993, the Presidency of the Council 
expressed the need to strengthen the Community approach to 
combatting unemployment. While recognising that responsibility 
for employment actions lies primarily with themselves, the 
Ministers underlined the need for supplementary coordinc&tioft and 
action at Community level in order to address the common prob.lsmfj 
of employment and unemployment. 
Council members supported the presentation by the Commission of 
a proposal which would provide a framework for actions at all 
levels within the Community. It would also encompass the role of 
the Community in various ways in relation to employment. 
This Communication responds to the Council request. It is based 
on four key observations: 
The current high level of unemployment is unacceptable. It 
is damaging both to the Community's competitiveness, and to 
the cohesion of its societies. 
Stronger economic growth is required, but the employment 
problem cannot be resolved by economic growth alone. A more 
employment-intensive pattern of growth is needed if 
employment needs are to be met. 
An integrated policy response is needed, mobilising all 
actors involved in employment matters. 
Primary responsibility for action lies with, and within, 
the Member States, but closer co-operation at the level of 
the Community is necessary - economically and politically -
in order to ensure the maximum impact of national actions. 
This Communication sets out the Commission's proposals for a 
framework within which a process of analysis and exchange of 
experience can be pursued in a structured and co-operative 
manner, between all the actors concerned, with a view to co­
ordinated action. Procedural proposals are made, together with 
an outline timetable. 
2. THE SCALE AND NATURE OF THE EMPLOYMENT PROBLEM 
2.1. Unacceptable levels of unemployment 
Over the past two decades, the rate of economic growth has 
averaged around 2% a year - much lower than in the two decades 
which went before. Employment creation has been insufficient to 
meet the growing demand for jobs and unemployment has shown a 
persistent and disturbing upward trend. While falling during the 
period of recovery in the latter part of the 1980s, it has risen 
by even more during the current period of recession. 
Unemployment has once more climbed above 10%. Over 17 million 
people across the Community are now out of work. Almost half have 
been out of work for more than a year. On current forecasts, 
unemployment will continue to increase during the rest of this 
year and next. If current trends persist, by the end of 1994, it 
will be some way above the record level of 10.8% reached in 1985. 
At the same time, progress has been limited in achieving 
convergence between regions in terms of employment levels, and 
in ensuring equal opportunities as regards access to the labour 
market. Many people - especially women - are effectively excluded 
from the labour market altogether. 
2.2. Low rates of employment 
The Community has a low rate of employment compared with other 
industrialised parts of the World. Less than 60% of the 
Community's population of working age are in work, compared with 
over 70% in the United States, EFTA and Japan. 
The counterpart of such a low rate of employment is, not only 
high unemployment, but a large hidden labour supply. Thus, even 
when employment increases, unemployment remains high as new 
people enter the labour market. In the late 1980s, the creation 
of over 9 million new jobs only reduced unemployment by 3 
million. 
The consequence is that, in order to get unemployment down from 
current levels of over 10% to more acceptable levels - say 5% -
the Community will have to create extra jobs on a scale large 
enough, not only to absorb the currently recorded unemployed, but 
also to meet the demands of those who will enter the labour 
market. 
Job creation on that scale cannot be achieved on the basis of 
growth alone. Given the increased numbers wishing to work, 3.5% 
economic growth, with 2% productivity growth - the experience of 
the second half of the late 1980s - sustained over the rest of 
the decade, would still leave the Community well short of a 
target such as 5% unemployment. 
3. THE EMPLOYMENT-INTENSITY OF GROWTH 
3.1. Comparisons within and outside the Community 
Levels of employment depend, not only on the rate of economic 
growth, but on the employment-intensity of that growth. 
Employment-intensity is determined, not only by the relative use 
of capital and labour - which determines the volume of employment 
for a given volume of output - but also by the way in which a 
given volume of employment is divided up between numbers of jobs 
and hours of work. 
In this latter respect in particular, experience between the 
Member States varies. For example, while Belgium and Holland have 
similar levels of labour productivity, the Netherlands provide 
jobs for 10% more people of working age than Belgium. Equally, 
Denmark - with a lower level of income per head (measured in PPS) 
than the western part of Germany - has a much higher proportion 
of its population in work. 
Comparisons with other industrialised countries are also 
revealing. In Scandinavia, the rate of employment has been at 
over 70% since the beginning of the 1970s. The main difference 
relative to the Community is in terms of activity rates of women. 
Indeed, activity rates of women in the Community, although 
growing, are still lower than in most of the economically 
developed world. 
Over the past decade, the United States has sustained i similar 
rate of growth of GDP to the Community - around 2% a year, once 
allowance is made for changes in the growth of population. 
During this period, however, the rate of income growth per worker 
has been lower in the United States than in the Community - 1% 
as opposed to 2%. On the other hand, the United States' rate of 
employment has continued to rise during this period to a level 
of 70% today - 10 percentage points above the Community level. 
Thus, while the overall growth of incomes has been the same in 
the Community and the United States, a larger proportion of the 
United States population has had access to paid employment. 
Japan has also succeeded in achieving higher rates of employment 
than the Community. In common with other industrialised 
countries, including the Community, a competitive traded goods 
sector with high productivity has been a means of generating 
income to create jobs in the service sector. The main difference 
is, however, that Japanese productivity in the service sector is 
lower than in the Community - thereby generating more employment 
- even though earnings in industry and services are much the same 
in both cases. 
While a more employment-intensive pattern of growth inevitably 
implies a wider spreading of paid employment, the effect on the 
distribution of income depends on the economic, social and 
cultural situation in the countries concerned. For example, in 
Scandinavian countries, and in Japan, a high level of employment 
has been achieved with an income distribution narrower than that 
in the Community. The United States, however, has seen a widening 
in income distribution as its rate of employment has increased. 
While experiences are not necessarily easily transferable from 
one Member States to another, or from outside the Community to 
inside the Community, such differences as exist are sufficiently 
wide to warrant more detailed analysis in order to identify what 
approaches are both adaptable to the Community, and compatible 
with its overall economic and social aims. In particular, the 
Community would need to ensure that any changes to existing 
policies were carried out in ways that do not exploit workers in 
a weak position in the labour market, or inhibit the development 
of the high value-added knowledge-based jobs which will be the 
key to future competitiveness. 
3.2. Government actions and employment-intensity 
In the face of high levels of unemployment, and long-term 
unemployment, governments have increased their expenditure on a 
range of policies and instruments designed, in general, to alter 
the incentive structures in the labour market in ways which can 
encourage a more employment-intensive pattern of growth, 
particularly in favour of the unemployed. 
These measures have generally sought to make unemployed people 
more attractive to employers by reducing the costs of employing 
them, by increasing their value as employees through training or 
other help, or by addressing problems of mis-match or transition, 
for example between school and work. Thus, Government support 
measures have take the form of grants, loans, tax incentives and 
subsidies to the unemployed and to potential employers, as well 
as the direct provision of counselling and training services. 
Governments have also sought to change the legislative 
environment in ways which encourage greater labour market 
adaptability. 
Programmes targeted on the unemployed demonstrate that changes 
in the structure of incentives operating in the labour market can 
be used to assist particular groups or individuals. In general, 
however, such policy actions have tended to take the form of 
derogations to existing national rules - for example, to reduce 
social security charges for the recruitment of the unemployed -
or to have been directed at specific issues - such as the 
development of part-time work. 
A broader lesson has to be drawn - namely that changes in the 
overall incentives structures might be pursued so as to bring 
about a more employment-intensive pattern of growth across the 
economy as a whole. This could have important benefits given the 
variations in incentive structures which currently exist within 
and between Member States. 
For example, while employers' social contributions average 15% 
of wages and salaries across the Community as a whole, this 
varies between Member States - from virtually 0% to over 20%. The 
overall effects of such differences on employment can only be 
judged in the context of the taxation systems in each Member 
State. However, it is possible that the employment intensity of 
different sectors of activities, or the potential for employers 
to offer different types of jobs, may be affected by the 
incidence, or structure, of taxation. 
The employment-intensity of production in the economy as a whole, 
in different sectors, or in different types of firms can be 
affected by the legal environment developed by governments in 
order to regulate the workings of the labour market. It can also 
be affected by other factors - the forms of work organisation and 
types of jobs developed within firms, the preferences and 
attitudes of those seeking to enter the labour market, or wider 
social and cultural changes regarding work, employment and life­
style. 
3.3. Community support 
The Community's employment objectives have been supported at 
Community level by a wide range of policies and activities -
economic, industrial, technological and scientific. In addition, 
however, the Community has focused on employment and related 
human resource issues through a variety of more specific 
activities. 
These have included analysis and research, experimental action-
research and pilot project programmes, the dissemination of best 
practice, as well as funding from the Community's structural 
funds, notably the European Social Fund - which encompasses both 
mainstream funding and specific Community Initiative programmes. 
Analysis and research has, over the past 5 years, been exploited 
through the Commission's Employment in Europe reports which, on 
the basis of Community-wide comparative analysis, and exploiting 
the Community's labour force survey, has deepened understanding 
of the structure of the Community's labour markets and the 
relationship between employment and other economic and social 
developments. 
Experimentation and evaluation has been pursued through action-
research programmes - such as the local employment development 
action programme LEDA and the action programme against long-term 
unemployment ERGO, as well as through pilot project programmes 
on employment creation - notably the ILE programmes for 
businesses run by women, and the SPEC programme on innovative 
local employment actions in response to changes brought by the 
Internal Market. 
Larger-scale pilot project actions have been undertake within the 
framework of the European Social Fund's Community Initiatives -
which encompass EUROFORM on new qualifications and new jobs, NOW 
on the employment of women, and HORIZON on the employment 
problems of the disadvantaged - as well as through relevant parts 
of the Poverty programme. 
A series of related actions on vocational training and on the 
integration of young people into the labour market have also been 
pursued through the Community's programme on education and 
training for technology COMETT, the FORCE programme on continuing 
training in Europe, the EUROTECNET programme of training linked 
to new technologies, the PETRA programme on training for young 
people, and the IRIS programme on improving the access of women 
to vocational training. 
The exchange of experience has been pursued through the 
Employment Observatory system which provides a structure for the 
collection, analysis, presentation, dissemination and discussion 
of Member State experiences covering both trends and structural 
changes in the labour markets, and the development of Member 
State policies. 
In particular, the Community has developed, over a 10 year 
period, the Mutual information system on employment policies, 
MISEP, which provides a full documentation of government policies 
and structures for their implementation, including a growing 
volume of evaluations. This is now supported by SYSDEM - which 
reports on research and analyses on employment and labour market 
issues within the Member States and provides a framework for 
discussion between policy makers and researchers at both national 
and Community level. 
Policy development has been reinforced through funding from the 
European Social Fund which now contributes some 6 Becu towards 
active manpower measures undertaken by national governments 
within the structure of Community Support Frameworks - some 13% 
of total expenditure by Member States, and a significantly higher 
proportion in priority regions of the Community. 
That support has been targeted on the long-term unemployed and 
unemployed young people, and on the needs of less developed 
regions in the Community. The bulk of the support is for 
vocational training, although some support is provided for 
employment subsidies to encourage recruitment and, in the less 
developed regions, for vocational education in schools. 
4. NEW FRAMEWORK FOR ACTION 
From the above analysis, three main conclusions can be drawn: 
- The scale and nature of Europe's employment problem are 
cause for major concern. Action is needed if the problem is 
not seriously to impair the Community's economic 
competitiveness into the 21st century, and to inflict 
considerable damage to the fabric of our societies; 
- There is sufficient evidence and experience to suggest that 
ways of, at least, improving the situation can be found -
over and above those which can result from higher levels of 
economic growth - by Governments adopting policy mixes 
which favour a more employment-intensive pattern of growth; 
- Although the main instruments lie with, and within, the 
Member States, the Community has an important role to play 
as a catalyst, as a forum for coordination, and as a 
support through the use of Community level policies. Action 
at the level of the Community is also necessary for reasons 
which are both economic (because the growing 
interdependence of our economies requires active 
cooperation across all policies) and political (because it 
is vital that the Community take an active interest in an 
issue of such importance for the well-being of the citizens 
of Europe). 
4.1. Objective 
What is proposed, therefore, is that the Community institutions 
and the Member States commit themselves to a structured, 
cooperative and systematic, process of analysis and policy 
reflection on possible solutions to the employment problem with 
a view to concerted policy action, centred principally around the 
need to create a more employment-intensive pattern of growth in 
Europe. 
4.2. Means 
This needs to be a genuinely collective process, in which the 
Commission certainly has its role to play, but where individual 
Member States, groups of Member States, or groups of interests 
from within Member States will also wish to contribute ideas or 
analyses. Suitable means of involving the other Community 
institutions, such as the European Parliament and the Economic 
and Social Committee, need to be explored, as do appropriate 
mechanisms for associating the Social Partners. 
The key starting point is the establishment of an agenda and a 
timetable, aimed at arriving at some operational conclusions over 
an eighteen month period between now and the end of 1994. 
Given the complexity of the employment issue and, in particular, 
the fact that responsibility for employment matters in the 
fullest sense is often widely spread, a means of ensuring real 
coordination of the process is crucial. 
In this context, a new, wider and more active role could be 
considered for the Standing Committee on Employment, which does 
bring together many of the main actors, though the question of 
inter-face with other fora would require careful attention. 
4.3. Commission role 
The Commission undertakes to underpin this process as well as to 
contribute analyses and suggestions for coordinated action. But 
this would in no way preclude others from doing the same. 
In addition, the Commission will seek to promote the 
transformation of successful Community pilot experiences into 
mainstream policies, on the basis of a systematic evaluation of 
successful experiences and measures, such as those described in 
section 3.3 above. 
More generally, it is the Commission's intention to apply its 
financial support in ways which can contribute to the overall 
objective of employment expansion. The proposed reform of the 
European Social Fund - which aims to increase the flexibility of 
the Fund, to anticipate labour market developments and to link 
the Fund more with policy-driven objectives - is a step in this 
direction. In particular, however, the Commission intends that 
any future Community initiatives in this area will be able to 
support experimentation and innovation on a trans-European basis. 
4.4. Issues for analysis and action 
The Commission intends to present analyses and suggestions for 
co-ordinated action in a number of different areas. As far as 
specific issues are concerned, the Commission has identified, in 
particular, the following: 
- adaptability at the workplace, and the potential for 
developing new forms of employment based on new forms of 
work organisation 
the development of new working time structures able to 
expand employment opportunities; 
- the development of training systems and qualifications able 
to improve integration into the labour market, and 
anticipate structural change 
investigating the scope for reducing labour costs and 
increasing employment-intensity, notably by modifying the 
incidence of taxation systems; 
the exploitation of the employment growth potential of new 
areas of work - the environmental industries, the arts, 
household services etc; 
the creation of employment through small businesses, and 
self employment, and the role of 8MEs generally; 
the role of local initiatives and local economic and 
employment development in strengthening the capacity of 
areas to create employment; 
the role of different agencies and partners in developing 
efficient external labour markets. 
4.5. procedures tn<a organisation 
The Commission intends to establish the necessary internal 
procedures in order to implement and follow-up the programme of 
actions outlined in this Communication. 
Dlsouasions on current employment concerns have already begun in 
Informal meetings of Ministers - not only of Employment Ministers 
but of Economie Affairs Ministers and Environment Ministers. 
Other Ministers potentially concerned can be encouraged to 
address these issues, initially on the basis of this document. 
The question of how best to orchestrate this complex process will 
need careful attention. 
5. çoyçLyglQNfl 
The Commission requests that the Employment and Social Affairs 
Council: 
- Agrees the need to develop a Community-wide framework 
within which the Member States and the Community can 
conduct a process of comparative analysis with a view to 
promoting a more employment-intensive pattern of growth in 
a co-ordinated way; 
- Notes the need to urgently consider how best to associate 
all those with responsibilities which indirectly or 
directly affect employment - including other Council 
members - in addressing employment concerns, and in 
exploiting employment opportunities, within the Community-
wide framework; 
- Accepts the Commission's proposal to present a rolling 
programme of work, to the end of 1994, based on the 
approach of this paper; 
- Agrees to associate all relevant partners at local, 
national and Community level, notably the Social Partners, 
in the development of appropriate responses. 

ISSN 0254-1475 
COM(93) 238 final 
DOCUMENTS 
EN 04 
Catalogue number : CB-CO-93-283-EN-C 
ISBN 92-77-56441-5 
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