- European employment strategy – Lisbon
It is more than
four years since the heady days of the Lisbon
summit when European leaders committed themselves
to an employment strategy designed to create 20m
jobs in Europe by 2010.
Although 6m jobs
have been created since 1999, bringing the employment
rate to just over 64 per cent across the 15 European
Union states prior to enlargement, slow economic
growth in the early 2000s is beginning to make
the 20m target look out of reach.
within the European Commission will admit as much.
In fact one of them described the target last
week as something of an "irrelevance".
Far more important, he said, was to have a co-ordinated
European employment strategy. He could have a
point, but the problem with targets, particularly
when they are not achieved, is that they can come
back to haunt us. The underlying problem with
the Lisbon target, however, is not so much the
number, but the premise on which it was set: that
creating jobs is a good thing. Is a job a component
of enterprise or a social necessity?
goes to the very heart of the tensions between
the social agenda of the EU and the need for businesses
to sustain competitiveness within the eurozone.
It also addresses the relationship between employment
and business. There is a common belief, bordering
on delusion, particularly within human resources
departments, that businesses view their employees
as assets. It is difficult to find much evidence
for this belief in shareholder behaviour. Shareholders
tend to take the view that employees are a cost.
confirm this conclusion. Employees are the greatest
cost for many businesses. They are also, invariably,
the most vital part of the company, hence the
popular acknowledgement of employees as "assets".
But this can seem a shallow assertion when a company
switches its production from one country to another,
changing workforces in an effort to drive down
costs.In the broader community there is a moral
and economic obligation to sustain healthy levels
of employment. This is sometimes better understood
by governments than by business.
It is clear,
in this context, why governments seek to ensure
job protection for employees. It is clearer still
that protectionist measures have failed to create
jobs. In 2003 there was a net loss of 200,000
jobs across the EU. The threat of migrating jobs
and production out of Germany forced manufacturing
workers at Siemens earlier this year to move,
at the company's demand, from a 35-hour to a 40-hour
week. No amount of employee regulation, therefore,
is going to protect Europe from the realities
of international competition. The good news for
business is that last November's report on the
employment taskforce headed by Wim Kok, the former
prime minister of the Netherlands, ushered in
a new sense of pragmatism governing EU employment
four principle recommendations have all been adopted
within the European Employment Strategy - the
blueprint for employment policy across the union.
These recognise the need for increasing adaptability
of workers and enterprises, broadening the reach
of the labour market across a greater number of
people, increasing investment in human capital
and lifelong learning, and improving
the governance of reforms.
These new priorities
signal a shift in emphasis away from the old concept
of job creation towards extending the reach of
the labour market among under-represented groups
such as women and older workers. This includes
the development of what the Kok report called
"active ageing" in the workforce.
are being urged to get rid of financial incentives
for early retirees and to introduce pensions reforms
and tax mechanisms to encourage lengthier careers
and the recruitment of older workers.
strategy also now appears to be firmly committed
to improving the quality of part-time and temporary
working, much of which has for so long been regarded,
overtly by trade unions and tacitly by business,
as second-class employment.
The Kok taskforce
report heralded a significant transformation in
attitudes towards flexible working. Where temporary
and part-time work may have been seen in the past
as "stop gap" work, subordinate to the
ideal of the full-time permanent job, the taskforce
recognised the importance of variable forms of
working. It urged member states to "remove
obstacles to, and raise the attractiveness of,
part-time work for employers and workers".
This, it said,
included the removal of legal barriers preventing
the establishment and development of temporary
employment agencies "as effective and attractive
intermediaries in the labour market, offering
improved job opportunities and high employment
These were the
principles behind the Agency Workers Directive
shelved in 2003, partly because of opposition
against greater regulation of the industry within
the UK. The Kok report pointed to the way that
the Netherlands deregulated its temporary agency
market while introducing new responsibilities
for agencies at the same time. This means that
temporary workers have the same benefits and entitlements
as fulltime workers but employers have greater
freedom over hiring and firing people in the first
six months of a contract. After 18 months working
for the same client employer, an employee is deemed
to have a permanent contract with the agency.
endorsement of such measures suggests that the
"temporary to permanent" mentality that
does not appreciate a desire among some workers
to develop "arm's length" working arrangements
continues to inform EU thinking on temporary work.
The concept of charging a premium for flexibility
that underpins the interim management market,
has yet to take root in Brussels-based policymaking
that continues to view the benefits of competition
and choice with suspicion.
that have emerged in the past 12 months, however,
point to a definable sea change, not only in attitudes
to employment across the EU, but in the approach
to reform. A requirement for annual national action
plans to address perceived weaknesses in individual
countries, introduced some years ago, has led
to a clearer picture of the various issues.
arguments over employment directives can conceal
the depth of European-wide policymaking on employment
that became transparent in the Kok taskforce report.
As the EU remains committed, officially at least,
to its Lisbon objectives, the fresh challenges
of enlargement and the pressures of globalisation
appear to be reshaping attitudes to accept a greater
diversity of employment models and a stronger
emphasis on investment in human potential.
While it is true
that the strategy remains committed to increasing
jobs, a discernible shift towards quality over
quantity points to a significant and welcome reshaping
of the European social model.
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