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.
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