EN Official Journal of the European Union C 286/38

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, in accordance with Article 128 of the EC Treaty

(COM(2005) 141 final — 2005/0057 (CNS))

(2005/C 286/08)

On 22 April 2005 the Council decided to consult the European Economic and Social Committee, under Article 128 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 24 May 2005. The rapporteur was Mr Malosse.

The European Economic and Social Committee adopted the following opinion on 31 May 2005 by written procedure (Rule 58 of the Rules of Procedure) by a majority with one vote against.

1. Introduction

The European Council of 22 and 23 March 2005 stated the need to relaunch the Lisbon Strategy and to refocus priorities on to growth and employment.

The Council asked the Commission to incorporate the priority given to growth and employment into new Broad Economic Policy Guidelines and new Employment Guidelines.

These two texts have been consolidated into a single document, which presents the first integrated guidelines for growth and employment for the period 2005-2008.

This opinion refers to the part entitled Proposal for a Council Decision on guidelines for the employment policies of the Member States, in accordance with Article 128 of the EC Treaty.

The Committee deeply regrets that the very tight timetable for adoption of the guidelines does not, on such an important subject for European citizens, allow for a real debate with civil society. This runs counter to the principle of participatory democracy as enshrined in the Constitutional Treaty. The Committee therefore requests the Council to review this timetable in the future so that the democratic debate and civil dialogue can be held in reasonable conditions, both at European and at national level. Only then can all the relevant social players be fully involved in every phase of the process, as was so vigorously called for by all sides in the Lisbon mid-term review with a view to more effective implementation of the employment strategy.

At the same time, the Committee regrets that the consultation procedure only allows it to express its view in part on what is in principle an integrated proposal on growth and employment. It would have been appropriate for the employment guidelines and the broad economic policy guidelines for Member States to have been included in a single referral, with a truly comprehensive policy making possible a more balanced policy mix between the cyclical and structural aspects.

Finally, the Committee believes that the Commission must draw up a more consistent strategy ensuring support and assistance to employment policy, which will respond better to public expectations and make it possible actually to achieve the full employment goals of the Lisbon Strategy.

2. General comments

2.1 Overall consistency

In order to make the process of refocusing on growth and employment effective, the European Council has decided to strengthen the consistency and complementarity of the existing mechanisms by launching a new cycle of governance.

The EESC welcomes this new approach, provided that it is put into effect and does not just remain on paper, which unfortunately is still the case. It is also important that consistency should be reflected in the evaluation.

For reasons of continuity, the Employment Guidelines and the Broad Economic Policy Guidelines should be fully reviewed every three years, allowing a real democratic debate.

Priorities

The priorities set out for the purpose of achieving full employment, job quality, labour productivity and social cohesion are as follows:

— Attract and retain more people in employment and modernise social protection systems;

— Improve adaptability of workers and enterprises and the flexibility of labour markets;

— Increase investment in human capital through better education and skills.

2.2 However, the Committee regrets that other avenues are not sufficiently explored, or that they are simply mentioned without really being made into priorities.

2.2.1 A policy for better integration of young people into the labour market, not least to guarantee them a first job with future prospects. The persistence (in some countries, the increase) of youth unemployment, which also affects graduates, is a key challenge for Europe; a society that offers its young people no prospects faces a bleak future.

2.2.2 Measures linked with the transition to a knowledge economy, inter alia to improve job quality and labour productivity. Indeed, the Committee is convinced that the scale of the transition to a new economic era (development of services, changes in industry, etc.) has not been properly understood, and that the ineffectiveness of some employment policies is linked to the fact that they take too little account of the changes that are happening before us. This transition to a knowledge economy requires more rigorous and focused commitment to vocational training and lifelong learning, and sustained adaptation to knowledge of new technologies. In this context, traditional distinctions between sectors and between skilled and semi-skilled jobs, which date from the industrial era and are no longer relevant in a knowledge-based society, need to be called into question.

2.2.3 The Committee regrets that guidelines on innovation and research concern only the broad economic policy guidelines and do not have any implications for employment whereas the EU, by putting more investment into these sectors, would help create jobs, especially for young people. This omission highlights the lack of consistency between the Broad Economic Policy Guidelines and the Employment Guidelines.

2.2.4 Given that the problem of gender equality with regard to employment is one of the key issues of the Lisbon strategy and that the need for further efforts to connect work and family life still remains, it is surprising not to find a specific integrated guideline on gender issues. At the same time, the Committee is astonished that the guidelines do not give more emphasis to the challenge of the ageing workforce and the need to do more to combat labour market discrimination based on age, disability or ethnic origin.

2.2.5 Joint management of immigration policy and the issue of Europe's declining demography. The European Commission's communication on the management of migratory flows (1) highlighted the fact that the Union could lose more than 20 million people from its labour force by 2030 due to the fall in the birth rate. Although immigration is not in itself a solution to the demographic situation in the EU Member States, Europe will need to adopt active policies for admitting economic migrants (2) so that their arrival helps meet the needs of the labour market and contributes to the EU's prosperity. The restrictive and discriminatory policies of some Member States towards migrant workers have a deterrent effect, which is detrimental to the needs of the labour market. Close collaboration at national and Community level is vital. The demographic challenge must, however, prompt a debate at European level on family and birth policies.

2.2.6 Actions promoting local initiatives and the development of all types of businesses. The growth in new businesses in the European Union is weak (except in some of the new Member States) and reflects a climate that is not favourable to initiative. There is also a very high failure rate among small businesses which do not reach the stage of maturity and development. The remedies are well known (removal of administrative barriers to starting up, reforming taxation on succession, tackling monopolies and distortions in competition, delays in payment and excessively long payment deadlines, the lack of European instruments to facilitate the single market approach, etc.) but are rarely applied. The Committee underlines the importance of this matter and would wish current EU enterprise policy programmes to be made consistent with the guidelines for growth and employment.

2.3 Evaluation of results achieved

2.3.1 The EESC recognises that the new guidelines are based on a quantitative evaluation of the results achieved to date under the Lisbon Strategy. These results show a slight improvement (an employment rate that rose from 61,9 % of the population in 1999 to 62,9 % in 2003). However, it must be remembered that the overall results of employment policies in the EU, well below the targets set for 2010, are disappointing. The EESC would therefore have wished for a more detailed evaluation of the results, taking into account other parameters (youth employment, female employment rate, older workers) and also differences in results achieved in different Member States and even, where applicable, in different regions and sectors in the most significant cases. The EESC could in future, in cooperation with national ESCs and similar institutions, produce on its own initiative — or be asked to produce — a comparative evaluation of the results achieved by drawing on the observations of civil society. This task is firmly in line with the recommendations of the March 2005 European Council requesting the EESC, along with national ESCs and similar institutions, to play a full part in implementing the Lisbon Strategy.

2.4 Methods of implementation

2.4.1 The EESC notes that overall, the integrated guidelines give the Member States enough flexibility to identify local solutions that best meet their needs for reform. However, beyond national policies, it is increasingly at regional or local level that political players, social partners, economic organisations and other civil society players are faced with the issue of employment and take practical initiatives. The most recent EU report on cohesion also highlighted the diversity of local and regional employment strategies.

2.4.2 The Committee regrets that the new guidelines no longer refer explicitly to specific employment and labour market objectives: they diverge from the previous approach, which gave all Member States a framework and clear commitments based on pro-active employment policies. These new guidelines are no longer a pillar to which Member States can refer. On the other hand, Member States' employment policy measures can no longer be measured against concrete, and in many cases quantified, European targets as they were in the past.

2.4.3 Conversely, the Committee welcomes the fact that the Commission is proposing that each Member State should set itself, after consulting the national parliament and the social partners, its own specific quantitative objectives. The fact is, it is at national level that the guidelines have to be implemented. On this subject, it would be appropriate for these national objectives to take account of the realistic prospects for progress in each country in order to strengthen the overall dynamic. Thus, it is desirable that those countries that have already achieved certain Lisbon objectives in terms of employment rates should continue to make progress.

3. Specific comments

ATTRACT AND RETAIN MORE PEOPLE IN EMPLOYMENT AND MODERNISE SOCIAL PROTECTION SYSTEMS

3.1 ‘Guideline. To implement employment policies aimed at achieving full employment, improving quality and productivity at work, and strengthening social and territorial cohesion. Policies should contribute to achieving an average employment rate for the European Union (EU) of 70 % overall, of at least 60 % for women and of 50 % for older workers (55 to 64), and to reduce unemployment and inactivity. Member States should set national employment rate targets for 2008 and 2010 (Integrated guideline No 16).’

3.1.1 In its opinion on Employment policy: the role of the EESC following the enlargement of the EU and from the point of view of the Lisbon Process (3), the EESC recalled that: It is clear that the employment targets cannot be met unless we succeed in ushering in a sustainable economic upswing. Appropriate framework conditions which are conducive not only to external demand, but also to internal demand must be established, in order to enhance the potential for growth and to achieve full employment. On that score, the Committee has, on a number of occasions recently, pointed out the need for a ‘sound macroeconomic background’ at European level. This includes, above all, a macropolicy which gives Member States scope to take cyclical action in economic and finance policy during times of economic stagnation, and the appropriate room for manoeuvre during times of economic growth.

3.1.2 The current European employment debate focuses on the need to increase employment rates. The Lisbon strategic target is to promote employment as the best way to prevent poverty and exclusion. This calls for a strategy aimed at improving job quality, not simply quantitative measures. Europe's path to full employment must therefore be tied to commensurate wages, raising the level of qualification (inter alia through lifelong learning), social security, and high standards of labour law. The EESC asks that, with the advent of a knowledge-based society, more importance be given to job quality across all sectors.

3.1.3 The innovativeness of enterprises of all types is essential to European economic dynamism. Without new, improved products and services, without an increase in productivity, Europe will fall behind economically and in terms of employment policy. Raising productivity also means a change in the working world, not always and immediately with positive effects. It is precisely by raising the quality of all categories of job that enterprise will be able to develop its innovativeness and productivity.

3.1.4 In addition, appropriate attention should be paid to combating discrimination and promoting equal opportunities. Member States should be strongly encouraged to continue to pursue anti-discrimination measures under their National Action Plans, inter alia wage equality, and measures to significantly increase the level of female employment.

3.2 Guideline. Promote a lifecycle approach to work through: a renewed endeavour to build employment pathways for young people and reduce youth unemployment; resolute action to eliminate gender gaps in employment, unemployment and pay; better reconciliation of work and private life, including the provision of accessible and affordable childcare facilities and care for other dependants; modern pension and healthcare systems, ensuring their adequacy, financial sustainability and responsiveness to changing needs, so as to support participation in employment and longer working lives, including appropriate incentives to work and discourage early retirement; support for working conditions conducive to active ageing (Integrated guideline No 17). See also integrated guideline ‘To safeguard economic sustainability’ (No 2).

3.2.1 The EESC supports these proposals.

3.2.2 The Committee expresses its full support for the European Youth Pact, adopted by the European Council of 22 and 23 March 2005, which aims to provide European young people with a series of policies and measures connected with the Lisbon goals. In its own-initiative opinion on the White Paper: Youth Policy (4), the Committee expressed the belief that ‘Member States, with the support of the Community, should make a quantitative commitment to reducing youth unemployment’.

3.2.2.1 The Committee therefore requests the inclusion of a specific guideline on youth employment, which could include: support mechanisms for first-time job seekers, commitments to first jobs with future prospects, the development of apprenticeships, more effective European programmes to promote the mobility of young workers, the removal of barriers to mobility (inter alia for apprentices, trainees and first-time jobseekers), and measures to encourage the creation of new businesses and activities.

3.2.3 The EESC urges the Member States to continue with their efforts to make the world of work compatible with family life. This is a task for society as a whole. In particular, the provision of child-minding facilities makes it possible to reconcile family and occupational obligations and enables women to continue to work in gainful employment, or to rejoin the labour market quickly after a break.

3.2.4 The EESC believes that if active ageing is to be promoted in reality, there is a need to create general economic and political conditions providing stronger incentives for longer working careers, and that it would also be appropriate to encourage voluntary work.

3.2.5 With regard to social security systems, the task today is to balance their modernisation and improvement in order to adapt them to current circumstances (e.g. demographic changes), whilst maintaining their social protection function (5). In this context, ensuring financial viability in the long term must also take account of the criteria of social fairness, general accessibility and high quality of the services.

3.2.6 The Committee considers the large number of direct employment-related subsidies to be dangerous, as they distort competition, give rise to inequalities, and, in the case of subsidies to unskilled jobs, drag down wages and thus job quality. It therefore recommends active measures that provide an overall framework by creating the structures that promote social inclusion, the reconciliation of work with family life, and equality of opportunity. Here, the particular needs of each Member State should also be taken into consideration, and in particular regional unemployment problems.

3.3 ‘Guideline. Ensure inclusive labour markets for job-seekers and disadvantaged people through: active and preventive labour market measures including early identification of needs, job search assistance, guidance and training as part of personalised action plans, provision of social services necessary to support the labour market inclusion of disadvantaged people and contribute to social and territorial cohesion and to the eradication of poverty; and continuous review of tax and benefit systems, including the management and conditionality of benefits and reduction of high marginal effective tax rates, with a view to making work pay and to ensuring adequate levels of social protection (Integrated guideline No 18)’.

3.3.1 However, as already stated in its opinion on Employment policy guidelines in 2003 (6), the EESC emphasises that ‘…the term 'at a disadvantage' … covers many groups of people facing various employment situations. A more precise approach is needed to terms and concepts relating to particular people with special needs and their employment. Many of these people and possibly some other categories of people are not even applying for jobs. This of course must not mean they are excluded from obtaining further education or professional experience under the employment action plans.’

3.3.2 As the EESC stressed in previous opinions, there is a need for incentives for the employment of disabled workers and the creation of the conditions necessary for familiarising disabled people with modern technologies. The Committee emphasises the key role of the social economy and the tertiary sector, inter alia in integrating disadvantaged people into the labour market, as the March 2005 European Council pointed out.

3.3.3 In line with its previous opinions, the EESC emphasises the importance of the proposal relating to guidance and training within personalised action plans.

3.3.4 The EESC also recalls that ‘Access to the labour market on equal terms is essential for the social integration of immigrants and refugees, not only to promote economic independence, but also to improve personal dignity and social participation. The structural and institutional barriers preventing freedom of access to the labour market must be removed’ (7).

3.3.5 The Committee also highlights the need to decouple social assistance, which is a right in itself, from taking a job. In some countries, many people turn down the opportunity of work if this would lead to the loss of benefits that make up most of their income. Those who do take up employment thus suffer a deterioration in their financial situation (as the reasons for the benefits being paid remain: family situation, disabilities, etc). This swells the ranks of the working poor. Along similar lines, the Committee emphasises that the issue of fighting poverty must be decoupled from that of employment and be the subject of more proactive, coordinated policies by the Member States of the Union in accordance with the spirit of the Lisbon Strategy.

3.4 Guideline: Improve matching of labour market needs through: the modernisation and strengthening of labour market institutions, notably employment services; greater transparency of employment and training opportunities at national and European level to facilitate mobility across Europe; better anticipation of skill needs, labour market shortages and bottlenecks; appropriate management of economic migration (Integrated guideline No 19).

3.4.1 The EESC underscores, as it has already done on several occasions, the importance of mobility in employment. This mobility means ensuring sufficient infrastructure and accessibility in the areas served and the areas where people live, as well as a sufficient level and standard of all public services. In addition to geographical mobility, upward social mobility should also be promoted, ensuring that paths between professions in the same sector are open, including sectors that are not directly linked to the knowledge economy.

3.4.2 The EESC highlights the role that immigrants can pay in meeting the needs of the labour market and promoting growth in the European Union. The Committee emphasises the need for non-discriminatory policies towards migrant workers and for measures to welcome and integrate them and their families.

IMPROVE ADAPTABILITY OF WORKERS AND ENTERPRISES AND THE FLEXIBILITY OF LABOUR MARKETS

3.5 ‘Guideline:Promote flexibility combined with employment security and reduce labour market segmentation through: the adaptation of employment legislation, reviewing where necessary the level of flexibility provided by permanent and non-permanent contracts; better anticipation and positive management of change, including economic restructuring, notably changes linked to trade opening, so as to minimise their social costs and facilitate adaptation; support for transitions in occupational status, including training, self-employment, business creation and geographic mobility; the promotion and dissemination of innovative and adaptable forms of work organisation, including better health and safety and diversity of contractual and working time arrangements, with a view to improving quality and productivity at work; adaptation to new technologies in the workplace, determined action to transform undeclared work into regular employment (Integrated guideline No 20). See also integrated guideline “To promote greater coherence between macroeconomic and structural policies” (No 4)’.

3.5.1 In the EESC's view, ‘it is important to strike the right balance between flexibility and security on the labour markets in order to ensure that, on the one hand, enterprises are able to offer more employment and that, on the other hand, workers are provided with the requisite security. The EESC welcomes the balanced approach adopted by the Taskforce on employment in the chapter of its report dealing with the promotion of flexibility and security on the labour market. Although social and structural conditions differ from Member State to Member State, they do have aspects in common, to which, in the EESC's view, particular importance should be attached.’

3.5.1.1 However, the Committee draws the attention of the Commission and the Council to the dangers of increasing the job insecurity of younger and older workers, which would weaken their position in collective bargaining over their wages, working conditions, social protection (particularly pension rights) and, in so doing, weaken the level of social standards and the European social model promoted by the European institutions inter alia in international negotiating and consulting bodies.

3.5.1.2 It would be helpful to try to decouple ‘changes linked to the opening of markets’ from a continuous deterioration of jobs, wages and living conditions of hundreds of thousands of European workers and citizens. The Committee also emphasises that the macro-economic measures required by guideline number 4 and set out in detail in line 20 have a significant human and economic cost, which the Commission should evaluate more thoroughly in an impact assessment before these guidelines come into force. As the Committee has indicated above, it will itself undertake a comparative evaluation of experiences of implementation in each Member State.

3.5.2 The Committee emphasises that there must be no confusion between flexibility and undeclared work, although they are mentioned in the same guideline. Promoting flexibility of contracts or wages is not the way to get to serious grips with the problem of undeclared work, which is an issue that needs to be dealt with separately.

3.5.2.1 The Committee emphasises the specific goal of combating undeclared employment. In an own-initiative opinion (CESE 325/2004), the Committee highlighted a number of ideas that would help find the right approach to the problem:

3.5.2.2 The incentive to declare employment must be improved.

3.5.2.3 Women and other disadvantaged groups are very often in the front line when it comes to poorly-paid undeclared work. It is therefore important that their situation be better identified so that appropriate measures can be taken.

3.5.2.4 Legislation relating to businesses needs to be looked at in order to reduce red tape, not least regarding the start-up of new businesses.

3.5.2.5 Undeclared work should not be considered as a minor offence. The efficacy of sanctions applied needs to be increased such that undeclared work no longer pays.

3.5.2.6 In the evaluation that will be made of the transitional measures concerning the free movement or workers — or rather the lack of such freedom — for citizens of countries that joined the EU on 1 May 2004, a report should be made of the difficulties that employers and workers have faced, taking into account changes in qualifications, demographic changes, cultural changes, and changes in the need for mobility. It will be necessary to investigate whether these measures have reduced mobility within the European Union and have encouraged undeclared work by workers from these countries.

3.5.3 ‘The Committee notes with amazement that the Commission does not, in its comments about this guideline, say a single word about the importance of the involvement of those affected, especially workers and their representatives, in economic restructuring. This is all the more astonishing as this was discussed in detail in the recently-published Commission communication on restructuring and employment, which the Committee explicitly welcomes and will shortly discuss in a separate opinion.’

3.6 ‘Guideline: Ensure employment-friendly wage and other labour cost developments by encouraging the right framework for wage-bargaining systems, while fully respecting the role of the social partners, to reflect differences in productivity and labour market trends at sectoral and regional level; and monitoring and, where appropriate, reviewing the structure and level of non-wage labour costs and their impact on employment, especially for the low-paid and those entering for the first time the labour market (Integrated guideline No 21). See also integrated guideline “To ensure that wage developments contribute to macroeconomic stability and growth” (No 5).’

3.6.1 In its opinion on the Broad Economic Policy Guidelines 2003-2005 (8), the EESC explained: ‘The Committee generally welcomes the call made in the guidelines for nominal wage increases to be consistent with productivity gains and inflation in the medium term. However, if the repeated call for wage moderation and restraint means that wage increases should be lower than the growth in productivity, the Committee cannot give its approval, since as a result the balance between supply- and demand-side factors would be destroyed. Seen simply as a supply-side factor, lower wage increases reduce the relative costs of the factor labour and can therefore boost employment. However, this overlooks the fact that wages are not only a supply-side cost factor but also have an effect on the demand side as the most important factor determining domestic demand. Considerable wage restraint therefore weakens overall demand and thus growth and employment.’

3.6.2 The Committee reaffirms its support for the principle of contractual freedom between the two sides of industry.

3.6.3 The Committee also believes that, beyond the simple question of wages, we should be concerned with the development of household purchasing power, which has tended to stagnate or even fall over the last twenty years in some Member States. The increase in (often local) taxation, rocketing house prices, and increasing energy prices have cancelled out increases in wages. This has had an impact on consumption and therefore on growth. The Committee asks that a debate on this phenomenon be launched, and would be pleased to take part in such a debate.

INCREASE INVESTMENT IN HUMAN CAPITAL THROUGH BETTER EDUCATION AND SKILLS

3.7 ‘Guideline: Expand and improve investment in human capital through: the establishment of efficient lifelong learning strategies, according to European commitments, including appropriate incentives and cost-sharing mechanisms for enterprises, public authorities and individuals, in particular to significantly reduce the number of pupils leaving school early; increased access to initial vocational, secondary and higher education, including apprenticeships and entrepreneurship training; and enhanced participation in continuous and workplace training throughout the life-cycle, especially for the low-skilled and older workers (Integrated guideline No 22). See also integrated guideline “To increase and improve investment in R&D” (No 12).’

3.7.1 The EESC agrees with and supports the Commission's proposals, which reflect the recommendations it has made in a number of opinions. However, it would like these recommendations to be backed up by specific quantitative goals. For this purpose, the Committee highlights the responsibility shared by all those involved (individuals, public sector organisations and businesses of all types) to ensure the viability and financing necessary to these investments in training.

3.8 ‘Guideline: Adapt education and training systems in response to new competence requirements through: better identification of occupational needs and key competences, and anticipation of future skill requirements; broadening the supply of education and training tools; developing frameworks to support the transparency of qualifications, their effective recognition and the validation of non-formal and informal learning; ensuring the attractiveness, openness and high quality standards of education and training systems (Integrated guideline No 23).’

3.8.1 The EESC also agrees with these proposals and recalls that it has long been calling for efforts to establish a European Learning Area to be stepped up (9). The EESC again stresses the need for developing lifelong learning and training and increasing the role of the social partners and other civil society organisations in this sphere. The EESC also highlights the importance of the transparency and harmonisation of qualifications across Europe and at international level.

Brussels, 31 May 2005. The President of the European Economic and Social Committee Anne-Marie SIGMUND

(1) COM(2005) 123 final.

(2) Quoted from the draft Opinion on the Green Paper on an EU approach to managing economic migration (SOC/199), which was discussed by the Section on 24 May.

(3) EESC opinion 135/2005 on Employment policy: the role of the EESC following the enlargement of the EU and from the point of view of the Lisbon Process – rapporteur: Mr Greif

(4) EESC Opinion 1418/2000 – White Paper: Youth Policy – Rapporteur: Ms Hassett van Turnhout

(5) See note 1.

(6) OJ C 208 of 3.9.2003 on the Proposal for a Council Decision on guidelines for the employment policies of the Member States (Rapporteur: Mr Koryfidis)

(7) OJ C 80 of 30.3.2004 on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on immigration, integration and employment (rapporteur: Mr Pariza Castaños)

(8) EESC opinion 1618/2003 – Rapporteur: Mr Delapina

(9) See, especially, the EESC opinion on the European Dimension of Education: its nature, content and prospects – Rapporteur: Mr Koryfidis - OJ C 139, 11.05.2001)