EN Official Journal of the European Union C 332/68

Opinion of the European Economic and Social Committee on the proposal for a Council Decision on guidelines for the employment policies of the Member States

(COM(2015) 098 final — 2015/0051 (NLE))

(2015/C 332/08)

Rapporteur: Carlos TRINDADE Co-rapporteur: Vladimíra DRBALOVÁ

On 10 March 2015 the Council decided to consult the European Economic and Social Committee, under Article 148 of the TFEU, on the:

‘Proposal for a Council Decision on guidelines for the employment policies of the Member States’

(COM/2015/098 final — 2015/0051 (NLE))

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 7 May 2015.

At its 508th plenary session, held on 27 and 28 May 2015 (meeting of 27 May 2015), the European Economic and Social Committee adopted the following opinion by 109 votes to 9 with 4 abstentions.

1. Conclusions and recommendations

1.1. Despite the efforts undertaken and measures carried out, the long and persistent economic crisis in the EU has had a highly negative impact on employment levels, particularly long-term unemployment, and on poverty levels in the great majority of Member States, and has made young people’s transition from education to the labour market slow and difficult. Instead of the hoped-for economic convergence, differences between countries and between regions within Member States have been exacerbated. The EESC finds this state of affairs unacceptable and recommends that the Commission, together with the Member States, set detailed targets and measures in the short-term to reverse the situation.

1.2. The EESC is pleased to note that the European Commission has amended the employment guidelines for 2015 to reflect the recent situation and to address many of the existing economic and social weaknesses.

1.3. Mindful in particular of the fact that there is a strong interaction between the broad economic policy guidelines of the Member States and the EU and the employment guidelines, the EESC calls on the Commission and Member States to implement as a matter of urgency the necessary changes in economic, financial and social policies so that they are fully on track for meeting the Europe 2020 objectives based on the successful structural reforms.

1.4. The EESC welcomed the Social Investment Package (1) and supported the launch of the Youth Guarantee, putting forward proposals for improvements (2). The EESC’s observations remain valid and should be given due attention by the Commission in the framework of the European Semester. The Member States play a crucial role in increasing public investment to create jobs, and the ‘employment’ dimension in public procurement should be considered an important criterion in selecting bids.

1.5. In the EESC’s view, the new employment guidelines must overcome the shortcomings and ensure that all economic and social players are firmly behind appropriate and realistic policies that will enhance growth and competitiveness and create jobs, with the aim of implementing the Europe 2020 strategy (and the smart, sustainable and inclusive growth that it stands for), raising the standard of living for the people of Europe and making sure that they benefit from the same rate of progress.

1.6. The EESC is deeply alarmed at the persistence of the austerity policy in the EU as it will prevent us from achieving the objectives of employment and poverty reduction. In this respect, the Committee is surprised that the Commission completely ignores, in both the Joint Employment Report and the employment guidelines, the danger of low inflation turning into deflation. Some groups have been particularly hard hit, such as young people, the low-skilled, the long-term unemployed, women, persons with disabilities, migrants, children, Roma and single parents. The EESC considers that the guidelines do not convey in strong enough terms the message that tackling unemployment and poverty should be key policy objectives for the EU and the Member States.

1.6.1. In the EESC’s view, the EU has failed in its capacity to create and offer employment opportunities. There are a range of challenges calling for urgent and appropriate responses by the EU and the Member States: (a) persistently high unemployment rates in many Member States; (b) unacceptably high youth unemployment; (c) the alarming long-term unemployment figures; (d) increasing segmentation of the labour market and the growing number of atypical contracts; (e) the poor quality of new jobs; (f) the high risk of social exclusion and segregation, primarily of children, Roma, immigrants and homeless people, leading to their alienation from the labour market and to greater poverty; (g) the increasing number of people in the categories of low wages and ‘in-work poverty’; (h) growing inequalities between and within Member States; (i) low worker mobility in the EU; (j) the persistence of gender inequality and the fact that women face a higher risk of poverty; (k) the mismatch between supply and demand in the labour market owing to low levels of skills and the low rate of school-to-work transition; (l) the insufficient involvement of the social partners and of civil society in labour market policies.

1.6.2. The guidelines should set quantified objectives for employment and poverty reduction, and these should be complemented by measurable targets for vulnerable groups. The Member States’ objectives, while taking account of specific constraints, should be ambitious enough to allow the EU to reach the targets for the whole European arena.

1.6.3. In the EESC’s view, the guidelines’ lack of quantification, in the short and medium term, suggests that Europe’s stand on employment and poverty is losing momentum. Transferring the setting of objectives and targets exclusively to the Member States will result in them becoming less involved in employment policies and in combating poverty and social exclusion.

1.6.4. The EESC calls on the Commission to promote the social economy as a means of increasing labour market opportunities for the unemployed and for vulnerable groups, and recommends that Member States set aside adequate and sustainable funding for this.

1.6.5. The EESC endorses the Commission’s comment that SMEs continue to have limited access to finance, which is a major impediment to job creation. Furthermore, ECB policy changes have not been translated into better financing conditions in the real economy, which is of concern to the EESC and warrants special attention from the EU and Member States. The job creation potential of SMEs needs to be better explored, by improving access to finance, new information and communication technologies (ICTs) and market opportunities, bearing in mind the role of medium-sized and large undertakings in this process.

1.6.6. The EESC is convinced that a return to growth with a view to improving the labour market hinges above all on strengthening domestic demand, particularly as regards significant public investments, as these act as a catalyst for private investment. This is how to bring Europe closer to full employment, a target which in the EESC’s view remains crucial.

1.6.7. The EESC considers that the social aspects of public procurement can play a vital role in improving the quality of labour markets. Any public contract should include provisions prohibiting the contractor or subcontractors from using precarious contracts, forced self-employment or from setting very long time limits for paying invoices.

1.6.8. The EESC encourages the Member States to involve the social partners more effectively in policies on labour market regulation, in particular the promotion of collective bargaining, in strengthening active labour market policies, reducing labour market segmentation and boosting investment in human capital in order to address social risks and achieve greater social inclusion.

1.6.9. The EESC calls for the text of the proposed employment guidelines to be revised as follows: — Guideline 5: Add in the first sentence ‘… reduce barriers for business to hire people, promote job stability and the quality of jobs …’ and insert at the end of the sentence ‘and require the use of ambitious social investment to stimulate employment.’, — Guideline 6: Include a specific and measurable target for combating youth unemployment and a regular assessment of whether resources are spent to good effect, — Guideline 7: — greater involvement of the social partners and civil society in the design and implementation of relevant reforms is to be welcomed, but this must be in keeping with national characteristics and respect the autonomy of national social partners, — at the end of the first paragraph add as follows: ‘public institutions should set a positive example with regard to job quality, in particular by safeguarding the social aspects of public procurement, especially the recruitment of the long-term unemployed and of those excluded from the labour market.’, — add the following definition of ‘quality employment’: ‘Quality employment should be ensured in terms of fair wages/appropriate pay, stable labour relations and worker representation, socioeconomic security …’ and amend the title of the guideline to read: ‘Enhancing the functioning of labour markets to create quality jobs’, — Guideline 8: remove the proposed automatic linkage of the statutory retirement age to life expectancy in Member States, inserting, conversely, the need to promote measures that bring the actual age closer to the statutory retirement age.

2. Introduction

2.1. In its Annual Growth Survey (3) marking the beginning of the 5th European Semester, the Commission recommends three main pillars for the EU’s economic and social policies in 2015: a coordinated boost to investment, a renewed commitment to structural reforms and pursuing fiscal responsibility.

2.2. As part of the package of documents published together with the Annual Growth Survey, the Joint Employment Report (4) reviews developments in the employment and social situation in Europe based on the implementation of the employment guidelines in the national reform programmes and country-specific recommendations at national level.

2.3. In 2014, growth in GDP was 1,3 % in the EU and 0,8 % in the euro area. In 2015, growth will be slightly higher (1,5 % and 1,1 % respectively), and is expected to further improve in 2016 (2,0 % and 1,7 % respectively). There are internal factors preventing faster growth in the EU. The main sources of concern are once again the persistent risk of low growth, close on ‘zero inflation’, and the high rate of unemployment.

2.4. The EESC fully agrees with the fact that weak investment is hampering Europe’s recovery. It therefore welcomes the Commission’s intention to strengthen competitiveness and stimulate investment for job creation, noting that the Investment Plan for Europe (5) is a step in the right direction, but does not go far enough because it ignores the need for strong public investment, making provision only for investment in infrastructure and omitting social investment (6). The EESC recommends that future public investment should not be considered as an expenditure for the purpose of calculating the budget deficit under the EU budget rules, and reiterates the need for new approaches to finding resources and a way of balancing surpluses in some Member States with shortfalls in others.

2.5. In this opinion, the EESC refers back to recommendations made in previous opinions (7) that have not received the attention they deserve from the Commission.

3. The continuing high level of unemployment — including long-term employment and youth unemployment — poverty and social inequality in the EU

3.1. This chapter presents the most relevant aspects of the Joint Employment Report (8) influencing the current social situation in the EU.

3.2. Europe is still experiencing an extremely critical situation as regards unemployment (9), with huge discrepancies between Member States. There are currently 24,1 million people out of work in the EU, with unemployment rates ranging from 4,8 % in Germany and 4,9 % in Austria to 23,7 % in Spain and 25,8 % in Greece.

3.2.1. Between the first quarters of 2008 and 2014 (10), full-time employment decreased by 8,1 million, while there was a steady increase in part-time jobs (more than 4 million). It is a fact that the burden of adjustment fell mainly on temporary jobs (non-renewable contracts).

3.2.2. Long-term unemployment continues to increase, rising over the last year (as a percentage of total unemployment) from 45 % to 49 %. The risk of marginalisation has become more acute in Europe, since ‘one in five of the long-term unemployed in the EU has never worked, and three out of four are young people below the age of 35 years’ (11).

3.2.3. Young people (12) and low-skilled workers were hit especially hard by rising unemployment, with rates almost double the overall unemployment rate. Youth unemployment rates range from 7,6 % in Germany and 9,1 % in Austria, to 50,7 % in Greece and 53,7 % in Spain.

3.3. The same developments in unemployment can also be seen in the EU’s employment rate, which continues to show a negative trend (13), making the 75 % target set for 2020 virtually unattainable. Furthermore, there are marked imbalances in job trends between the various segments of the labour market, between the different Member States and between their regions.

3.3.1. In 2013, the lowest employment rates were in Member States in southern Europe. Between 2008 and 2013, many southern Member States witnessed a substantial decline in their employment rates, whereas in some northern Member States the figures improved or remained stable.

3.3.2. The employment rate among young people (15-24) slipped from 37 % to barely 32 % between 2008 and 2013, a decrease of five percentage points (14). In eight Member States, the youth employment rate actually decreased by 12 or more percentage points. Germany was the only country in which there was no reduction in youth employment (47 %).

3.4. The communication notes that the proportion of people at risk of poverty and social exclusion has increased significantly, with ever greater differences between Member States. Between 2008 and 2012, the number of Europeans at risk of poverty or social exclusion increased by 9 million, to reach 25,1 % of the population. The Committee finds it unacceptable that in many European countries at-risk-of-poverty and social exclusion rates remain very high and have worsened in recent years (15).

3.4.1. There are a growing number of unemployed or underemployed households and in-work poverty has increased. In 2013, some 32 million people suffered severe material deprivation.

3.4.2. The risk of poverty or social exclusion for children has increased, with single-parent households twice as much at risk of poverty as households with two adults (16). The risk of poverty among third-country nationals is also twice as high as among Member State citizens (49 % against 24 % in 2012). Approximately 31 % of families with three or more children are at risk of poverty or social exclusion.

3.4.3. Since 2011, social expenditure has decreased, which has aggravated economic and social conditions (17). In some Member States, people in vulnerable situations and with low incomes continue to experience difficulties in access to healthcare, in particular in Finland, Portugal and Greece.

3.5. There is still considerable segmentation in the labour market in a number of Member States, particularly evident in the high ratios of temporary (40 %) and part-time employment (30 %) among young people, persistent pay gaps between men and women and low transition rates from less protected to other, more protected types of contract.-

4. General comments on the proposed guidelines

4.1. The results of the recent public consultation on the Europe 2020 strategy (18) show that, as regards employment, R & D and poverty, the EU is a long way from achieving the objectives set. 2013 data point to an employment rate of 68,4 % (well below the 75 % target), to a level of investment in R & D of 2,0 % of GDP (well off the 3 % target) and 122 million people at risk of poverty and social exclusion (far wide of the 97 million target).

4.2. The EESC notes the progress made by the Commission in these guidelines in relation to the 2010 guidelines and welcomes the more positive approach in Guideline 5.

4.3. Against the background of the protracted economic and financial crisis and the still weak signs of recovery, tackling unemployment and poverty must be key policy objectives for the EU and the Member States. The EESC is of the view that steps to monitor labour market matching and the transition from school to work, and to combat poverty need to be improved and should include specific targets and measures for the most vulnerable groups.

4.4. The EESC notes that the employment guidelines do not contain quantitative targets, which weakens the obligation on the part of Member States to achieve common objectives for employment in the EU. In many of its opinions, the EESC has put forward proposals to define measurable targets, notably as regards gender equality, youth employment, combating working conditions with insufficient social protection, combating poverty (including among people who are in work) and employment of migrants and persons with disabilities (19).

4.5. The social aspects of public procurement must be included as one of the most important ways of raising the quality of the labour market and boosting demand for labour.

4.6. The European Employment Strategy should contain clear objectives in areas such as reducing youth unemployment, reducing the number of long-term unemployed, providing job offers or training for young people within a very short time-span, creating adequate care facilities in order to balance work and family life, reducing inequalities between men and women and fighting poverty. At the same time, it should assess the effectiveness of measures adopted. The 2010 guidelines have contributed little to improving employment and reducing poverty. The EU and its Member States urgently need to seek more ambitious solutions to make up for this lack of progress.

5. Specific comments and proposals for amendments to the four employment guidelines

5.1. Guideline 5: Boosting demand for labour

5.1.1. The EESC explicitly supported the EU target of raising the employment rate to 75 % by 2020. However, it is concerned by the negative trend observed in recent years, and a change in policies is essential if we are still to meet this target.

5.1.2. The EESC recognises that state and public investment play a crucial role in job creation. It therefore calls for a major public investment drive and for smart and ambitious employment policies to create jobs. The ‘employment’ dimension should be an important criterion in awarding public contracts. The Employment Guidelines must give priority to ‘technological’, ‘green’ and ‘white’ jobs and the ‘youth’ and ‘long-term unemployed’ groups.

5.1.3. The EESC welcomes the measures designed to facilitate job creation, and particularly those supporting SMEs and entrepreneurship and promoting the social economy and social innovation, and therefore calls on the EU and the Member States to focus on these. At the same time, it calls for job creation to be made on a sustainable basis. In this sense, it would suggest adding the following to the first sentence of Guideline 5: ‘… reduce barriers for business to hire people , promote job stability and the quality of jobs …’.

5.1.4. For many years, the EESC has expressed the view that there should be a commitment to R & D, training, infrastructure, health and social services in order to create jobs and generate greater economic growth. With this in mind, the EESC has emphasised the multiple positive effects of social investment in employment and recommended promoting investment as a key element of the revision of the integrated guidelines (20).

5.1.5. As regards taxation, the EESC recommends changes to ease the tax burden on labour, provided that this does not jeopardise levels of social protection and other social expenditure, which moreover must be improved. All income should duly contribute to financing social security. It will therefore be necessary to consider other sources of revenue to offset this reduction (e.g. EU own resources (21), taxing financial transactions and taxes on properties and companies).

5.1.6. The EESC agrees with the Commission on the need to promote social dialogue and collective bargaining, in accordance with specific national situations and safeguarding the autonomy of the social partners. Establishing national minimum wages and raising the lowest wages will contribute positively to boosting domestic demand and reducing poverty.

5.2. Guideline 6: Enhancing labour supply and skills

5.2.1. As the EESC has already stated, a policy that creates quality jobs and sets ambitious targets for education, vocational training and lifelong learning will have a considerable impact on growth and will help increase productivity. It therefore welcomes the fact that the Commission is attaching priority to combating the problem of school drop-out rates and the mismatch between the supply of skills and labour market needs.

5.2.2. Despite some slight ‘positive developments regarding the youth unemployment rate’ (22), the EESC believes that the situation is still very serious in some Member States, particularly in the countries of southern Europe, and cannot accept that differences between countries are so marked and persistent. The EESC has repeatedly called for ambitious targets for fighting youth unemployment, either under the Europe 2020 strategy or within the framework of the employment guidelines, and strongly insists, regardless of the Europe 2020 review, that a quantified target for reducing youth unemployment be set.

5.2.3. The EESC is deeply concerned that the percentage of young people who are not in employment or in any kind of education or training has risen significantly in half of the Member States. Member States should establish systems for lifelong learning and continuing education for all age groups. The EESC urges the EU and the Member States to implement, as a top priority, national plans in the context of the Youth Guarantee, providing the relevant institutions with the necessary resources and, at the same time, assessing the quality of national plans and the effectiveness of financial resources already deployed.

5.2.4. Given the growing volume of long-term unemployed, the EESC stresses the urgent need for the EU and Member States to develop national plans for combating long-term unemployment along the lines of current plans under the Youth Guarantee and to set reduction targets.

5.2.5. The EESC believes that developing the skills of unskilled workers and promoting adult education are of paramount importance, as skills need to be improved to bring them more closely in line with labour market requirements. Member States must offer training opportunities to all unemployed people and wage-earners. To this end, measures such as setting indicators relating to public and private investment in vocational training, and the right of workers to paid leave for training purposes should be considered and required in this Guideline. Also the promotion of training for apprenticeships and the modernisation of training programmes are essential to facilitate the transition from school to work, and companies should therefore be made aware of the importance of training.

5.3. Guideline 7: Enhancing the functioning of labour markets

5.3.1. The EESC welcomes the fact that this guideline refers to the need to ensure quality employment in terms of socioeconomic security, education and training opportunities, working conditions (including health and safety) and work-life balance. However, it calls for a definition of ‘quality employment’ to be included, making particular mention of fair wages/appropriate pay, stable employment relations, gender equality and worker representation. It emphasises the need to monitor the market, particularly as regards the reduction of labour market segmentation and the qualitative aspects of new jobs created.

5.3.2. As the EESC has stated, the qualitative aspect of jobs is of utmost importance, since the creation of jobs at any price, without decent economic and social conditions (precarious, low-paid jobs without guarantees of health and safety in the workplace) is no solution. It is therefore necessary to reverse this trend in many Member States. In order to draw attention to this priority, the EESC proposes amending the title of Guideline 7 to read: ‘Enhancing the functioning of labour markets to create quality jobs’ .

5.3.3. The EESC argues that new jobs should be systematically monitored on the basis of quality criteria. Employment law should promote stable contracts. Regardless of the type of contract, no worker should be deprived of adequate employment protection rights. Atypical contracts should be the exception rather than becoming the rule. The EESC stresses the need for Member States to continue their efforts to integrate the informal economy into the formal economy and eradicate undeclared work.

5.3.4. In the EESC’s view, public institutions should set a positive example with regard to job quality, as it is not possible to get around this obligation through outsourcing or public procurement. Public institutions should therefore make ample use of the possibilities inherent in the social aspects of public procurement laid down in Directive 2014/24/EU to ensure the quality of work, they should avoid precarious contracts or forced self-employment and should ensure that contracts with subcontractors are fair.

5.3.5. The EESC agrees with the Commission on the need to strengthen active labour market policies and ensure that they tie in more closely with passive policies. The facilitation of the transition from periods of unemployment to employment, with decent economic conditions during the transitional periods, should be given special attention by public employment services, which must provide individually tailored and timely support for the unemployed. Active policies need to be strengthened, not weakened. This means ensuring that there is an adequate financial base for dealing with times of crisis and the serious labour market situation.

5.3.6. The EESC agrees with increasing the mobility of workers within the European area, subject to safeguarding the transferability of pension rights, the recognition of qualifications and the treatment of workers in accordance with the labour conditions in force in the host country. Third-country workers must also be treated decently, by ensuring compliance with the law and eliminating abuse.

5.4. Guideline 8: Ensuring fairness, combating poverty and promoting equal opportunities

5.4.1. The EESC considers that growing social inequality in Europe means stepping up the fight against poverty and social exclusion. This will call for specific measures targeting vulnerable groups such as young people and children, single parents, migrants, minorities, people with disabilities, the elderly, Roma and homeless people. As the EESC has argued, this approach should focus on reducing the risk of poverty and setting specific targets (23).

5.4.2. The EESC points out that reducing the risk of poverty will require stable and reliable common indicators in order to monitor progress. Although developments have been encouraging, the EESC stresses the need to develop new indicators to assess in particular the relationship between income and purchasing power in each Member State.

5.4.3. The EESC emphasises the need to ensure a guaranteed minimum income (24) and to counteract the growing number of low-paid jobs by targeting ‘in-work’ poverty and social exclusion. Although there are legal contractual arrangements that still allow this, the aim is to reduce as far as possible precarious contracts and promote contracts offering lasting social protection, invest in training and job creation, combat youth unemployment and promote integration of marginalised people, in addition to ensuring social protection during transition periods between training and work.

5.4.4. The EESC urges the EU and the Member States to intensify measures to combat poverty and social exclusion, focusing on the most at-risk groups and setting specific targets for integrating people into society and the labour market.

5.4.5. The EESC would reiterate that the best way to ensure a reduction in poverty is to give people jobs and boost their participation, as well as increasing their employability and adaptability.

5.4.6. In previous opinions (25), the EESC has also shown considerable scepticism about how raising the statutory retirement age would help to address demographic challenges. In the Committee’s opinion, what is most important is to bring the actual retirement age closer to the statutory retirement age (which first requires adapting working conditions to reflect workers’ ages (26)). It is therefore necessary to amend the text of Guideline 8 regarding pension reform accordingly.

Brussels, 27 May 2015. The President of the European Economic and Social Committee Henri MALOSSE

(1) OJ C 226, 16.7.2014, p. 21.

(2) SOC/522 18.3.2015 EESC Opinion on the Youth Employment Initiative — prefinancing (not yet published in the OJ).

(3) COM(2014) 902 final.

(4) COM(2014) 906 final.

(5) COM(2014) 903 final.

(6) ECO/374, 19.3.2015 — An Investment Plan for Europe (not yet published in the OJ).

(7) OJ C 133, 9.5.2013, p. 77; OJ C 11, 15.1.2013, p. 65; OJ C 143, 22.5.2012, p. 94 and OJ C 21, 21.1.2011, p. 66.

(8) COM(2014) 906 final.

(9) Although significantly down (0,3 percentage points) on the December 2013 figure, the overall unemployment rate in the 28 EU Member States was 9,9 % in December 2014 (11,4 % in the 18 euro area countries).

(10) COM(2014) 906 final.

(11) Ibid.

(12) Although 1,7 percentage points lower compared with December 2013, the youth unemployment rate in the 28 EU Member States was 21,4 % in December 2014 (23 % in the 18 euro area countries).

(13) In 2013 the employment rate in the EU was 68,4 %, as against 70,3 % in 2008 (down 1,9 percentage points).

(14) Between 2008 and 2013, the decline in the employment rate (20-64 years) in the 18 euro area Member States was 2,5 percentage points, down from 70,2 % in 2008 to 67,7 % in 2013.

(15) COM(2014) 906 final.

(16) In 2012 the percentages were 47,8 % and 24,4 % respectively in the 28 EU Member States.

(17) COM(2014) 906 final.

(18) COM(2015) 100 final.

(19) OJ C 242, 23.7.2015, p. 9; OJ C 12, 15.1.2015, p. 16; OJ C 354, 28.12.2010, p. 8; OJ C 318, 23.12.2009, p. 52; OJ C 318, 23.12.2009, p. 15; OJ C 318, 23.12.2009, p. 113.

(20) OJ C 226, 16.7.2014, points 1.5 and 5.3.3.

(21) As described in Opinion ECO/377 — An European tax as an EU own resource (not yet published in the OJ).

(22) COM(2014) 906 final.

(23) OJ C 21, 21.1.2011, p. 66.

(24) OJ C 170, 5.6.2014, p. 23.

(25) OJ C 318, 29.10.2011, p. 1, point 2.2.

(26) OJ C 318, 29.10.2011, p. 1, chapters 2 and 6.