EU shows positive labour market

The European Union (EU) is experiencing a positive labour market and social trends on the back of continued economic growth, according to a report by the European Commission (EC).

With over 234 million people having a job, employment has never been as high as today in the EU and unemployment is at its lowest level since December 2008. Since 2013, 10 million jobs have been created in the EU.

“But looking beyond the overall social and economic progress, evidence shows that there is a particularly heavy burden on younger generations: They tend to have more difficulties in finding a job and are more often in non-standard and precarious forms of employment, including temporary contracts, which may lower their social protection coverage. They are also likely to receive lower pensions, relative to wages,” according to an EC statement on the latest report on employment and social developments in Europe (ESDE).

Hence, the 2017 ESDE review focuses on intergenerational fairness to ensure all generations benefit from the current positive economic trends.

European commissioner for employment, social affairs, skills and labour mobility Marianne Thyssen said the annual review shows once again that EU is firmly on the path towards more jobs and growth.

“However, today’s young and their children may end up worse off than their parents. This is not what we want. Swift action is needed. With the European Pillar of Social Rights, we want to preserve and improve our social standards and living conditions for future generations,” she said in the statement.

The report showed that despite steady improvements in living standards in the EU, young people do not equally benefit from what it termed as the “positive evolution” compared to the older generations.

Moreover, younger age groups’ share in income from work has decreased over time. Such challenges are affecting

younger people’s household decisions, including having children and buying a house. This may in turn have negative consequences on fertility rates and, consequently, on the sustainability of pension systems and growth, added the statement.

In addition, the report noted that the working age population is expected to decline by 0.3% every year until 2060, meaning a smaller work force will need to ensure we keep on the current growth path.

It also means that at the same time, a smaller number of contributors will pay into the pension systems — often with lower and/or irregular contributions as they will not be corresponding to full-time and/or standard work — while more pensioners will depend on them.

“Today’s young workers and future generations therefore seem to face a double burden stemming from demographic change and the need to ensure pension systems’ sustainability,” the statement added.

On the question of what is next, the statement said policy-makers can prepare for and mitigate these evolutions in several ways.

“First of all, we need to make full use of our human potential on the labour market, by activating and equipping with the right skills all generation groups and making sure there is a proportionate link between the duration of working lives and life expectancy.

“Policy efforts resulting in higher fertility and efficient migration management can also help, as well as supporting innovation and increasing efficient spending on investment in young and old people’s skills and their education.

“Lastly, social partners can make a major contribution to bridging the gap between younger and older workers to promote a fairer labour market for both. This includes promoting lifelong learning, providing social protection benefits, and contributing in the design and implementation of employment protection legislation and active labour market policies,” the statement said.