Feedback on Europe and Jobs

21mar98: Wim van Velzen, MEP: Speech to unemployment conference

York Co-operative Party

Employment and the Future Role of Work

Saturday, 21st March 1998

Speech by Wim van Velzen, MEP

Ladies and gentlemen,

Despite considerable economic growth, 18 million people in the European Union are officially registered unemployed, i.e. 12% of the active population. Half of them have been out of work for more than a year. More than one fifth of all young people are without a paid job. Between 25 and 30 million people in Europe are looking for work. Critics of the European social model are not getting tired of pointing out, how much better the United States are doing in creating net employment. What they seem to forget is that millions of employed Americans live in poverty without a decent social safety net and health insurance and that the inequality in American society is growing. This is not the way Europe should polish up its unemployment statistics: we do not have the political ambition of creating a social class of the "working poor". Besides, the European Treaty obliges us to strive for social cohesion.

In the Thatcher era, the UK government had firmly set course for the American model. The new Labour government seems to want to find a "third way" between the American and the European, i.e. Continental, model. Coming from the good old continent, I want to come to the defence of the solidarity-based European social model. I think it is worthwhile defending: it has done well, it is doing well and there is no reason to dismiss it. However, it has to undergo certain changes. That is normal. Systems have to be dynamic. They have to be able to react to economic, social and societal changes.

It is true that our employment rate (60.4%) is low compared to the USA and Japan where it exceeds 74 per cent. So, what can we do to exploit the huge labour reserve we have in Europe? According to the recent Commission document "Growth and Employment in The Stability-Oriented Framework of EMU" two conditions must be met: firstly, the existing workforce must be "employable" and, secondly, the economy must create the necessary working posts.

For quite a while European institutions and national governments have presented training as a miracle cure against unemployment. It is, therefore, nothing less than astonishing that in this recent document the European Commission seems to change its tune. Where in earlier documents the lack of skills of the European workforce was blamed for high unemployment, it is now almost casually mentioned that, actually, skill-wise our workforce is not doing so badly after all and that the economy must create the necessary working posts in the first place:

" from the present 10.7 per cent of the labour force which is unemployed, about 6 per cent could re-enter the job market fafrly fast if and when jobs are offered to them. Thus, despite some bottlenecks in afew specific sectors, there is no evidence that the skills offered by a sizable share of the wor~orce are basically outdated or insufficient to ensure employability. The irue immediate bottleneck is located at the level of net job creation in the economy."

This only underlines what the European Parliament has been pointing out for years: that training people without being able to offer them jobs is pointless. For years European citizens have been trained and retrained several times in a row with money from the Structural Funds without ever finding sustainable employment.

It was against this background that the European Parliament has asked the Summit in Luxembourg:

  • to link training programmes to a guarantee that the retrained unemployed will be given paid employment for at least a year. Special attention should be devoted to groups which are particularly badly affected by unemployment;
  • to progressively use resources intended to alleviate the consequences of unemployment (passive measures) to finance active employment measures, in order to raise employment without putting public funding or social protection systems at risk;
The Parliament asked the two sides of industry to conclude agreements on creating jobs for the young and the long-term unemployed after completion of training. Also, a combination of job rotation, parental leave and lifelong learning should be introduced in order to create (temporary) jobs.

There is another problem about training and jobs. Recent research in my home country, the Netherlands, has shown that whereas, indeed, the skill level of jobs rises, the skill level of employees is rising even faster. According to the Organisation for Strategic Labour Market Research (OSA) "overtraining", not "lack of skills", is characteristic for the current situation. Whereas in 1971 seventeen percent of the Dutch population held a job below their educational level, now it is 38 per cent. I know that I don't have to spell this out for you, but that is more than a third of the population!

The Researchers of the OSA discovered another interesting fact: the amount of low skill jobs has not decreased since 1960, notwithstanding technological progress and competition with low wage countries! This, however, does not help people with low skills: their jobs are taken by people with higher education. This is happening on all levels of the labour market, a process which they "downwards drive out".

Subsidized low skill jobs as they have been introduced by our Minister of Employment, Ad Melkert (we call these jobs "Melkert-jobs" in Holland) give, it is true, a chance to low skilled people, but they do not deliver a structural resolution for this problem, rather they "treat" the symptoms. The conclusion of the OSA is that what is important is to create more high skilled jobs. There! !! Here is another voice against the Commission's old tale, still shared by many governments, including your own, that our workers are "under skilled".

Just a few weeks ago Commissioner Flynn said in the European Parliament that "people without work want very much to contribute to active society, but they can only contribute if they are equipped with the tools to do so." Do the OSA-study and the latest "noises" from the Commission itself not rather suggest that people without work are all dressed up with nowhere to go, because their "tools" are used by other people who, in turn, could actually use a totally different set of tools all together, unfortunately they have nowhere to go either? Not so much the "employability" of our workforce seems to be questionable as the employment creating ability" of our economy. And now what? How can we make our labour markets and economies smarter"?

By the way, my criticism of the employability-concept does not imply that I do not see the necessity for people to update their skills: it is true that due to a rapid technological development, especially in the area of information and communication technology, we have to do our best to keep up with the changes. Keeping knowledge and skills up to date is one thing, providing jobs so that people can actually practice their high level of knowledge and skills instead of unlearning them because they have to work in jobs where they cannot apply them, is quite another, if I can believe the recent research results.

I get especially agitated whenever "employability" is linked up with the other buzzword "entrepreneurship". I have developed the uncanny feeling that the message to the individual here is: acquire knowledge and skills and then create your own employment, because we haven't got enough adequate jobs anyway. Again, stimulating people to "go into business" is one thing, pushing people into "entrepreneurship" out of lack of ideas how to create more and more interesting jobs is bad policy. In fact, it is extreme Thatcherism: everybody can do anything, look at me! You have witnessed the results in this country. Many young enthusiastic people became entrepreneurs in the early eighties. They are still trying to pay their debts.

One thing is for sure: we will not be able to create sufficient jobs, neither highly skilled nor low-skilled, if we do not reduce working -time and redistribute unpaid and paid work. This would not only create jobs, but also save workers from getting stressed from work overload which is a big problem in my country. Another interesting recent research in the Netherlands has shown that not only women are suffering from stress due to trying to combine paid work, unpaid work at home and social life, the number of men suffering from the same problems is increasing. Most people who have been interviewed say that in order to cope with this form of stress, they are trying to work part-time, in flexible working hours or at home. Another high priority for the people interviewed is childcare. People want more and cheaper child care. By the way, the research shows also that men get apparently stressed rather easily: of all the men working full-time, only 1% does most of the house keeping, with women that is 51%

So: reduction of working time is good for us. What else could help to create jobs? My favourite proposals are:

  • stimulation of innovation, research and professional training;
  • tax reforms including the reduction of non-wage labour costs, primarily in the case of low-wage groups, a shift of taxes from labour to environmental and energy factors and a social VAT;
  • special support for SMEs (which, after all account for 55% of jobs in Europe);
  • creation of jobs in the public sector, the "Third System" and through local employment initiatives.
Allow me to briefly digress to the topic of "local employment initiatives", because I think this is a terribly important issue, especially for our cities where the current polarization between advantaged and disadvantaged groups is most evident. The president of the European Parliament, Jacques Santer, said once that "nothing can be done without grassroots involvement". That is certainly true if we want to revive disadvantaged neighbourhoods and inner cities. Supportive measures to create community businesses (which can also provide training opportunities), to set up mutual aid arrangements and to facilitate transitions from voluntary activities to paid work (or combinations of both) are crucial to rebuild confidence and solidarity. In many neighbourhoods people all over Europe have shown that they can do it with just a little help from outside. The European Parliament has been very supportive to this idea and to a close cooperation with NGO's and grassroots organisations on all levels.

When the European governments met in Luxembourg in November last year, they took some encouraging steps in the right direction: they agreed to set concrete common goals based on bench marking and best practices. The most important goals are:

  • a new start to every unemployed young person before they reach six months of unemployment;
  • a new start or individual vocational guidance for unemployed adults before they reach twelve months of unemployment;
  • to increase significantly the percentage of unemployed persons receiving training to gradually achieve an average of the three best performing countries, or at least 20%.
Around this time all European governments should have produced their national action plans as has been agreed in Luxembourg. Within a couple of weeks we will know whether they are determined to continue the course set in November last year forcefully. If they do, I am convinced that - to say it with the words of the song millions of people in the UK probably never want to hear again - things can only get better. In the meantime, the unemployed in Germany and France have made clear to their governments that they know other tunes as well. So has, apparently, many a member of British pop groups in the recent past and many young people in the UK seem to have more trust in Blur than in Blair after not even a year of New Labour. That may not be fair, but who says that voters have to be, especially when they're young and unemployed and for a moment believed that, indeed, things could only get better. That still has to be proven. The good news is that it is possible. As another great song by another extremely cool Britpop band goes: "We can work it out".

Ladies and gentlemen, thank you very much.