INTRODUCING THE DECENT EMPLOYMENT RATE

The European Centre for Workers'Questions EZA with the financial support of the European Commission has just published an interesting booklet with the promising title “Europe 2020 – How to meet the 75% employment rate target in a decent way?” (Contributions to Social dialogue 14). Not an easy subject but the three authors Tom Vandenbrande, Michael Schwarz & Hubert Cosey have succeeded in presenting the results of this research project from both EZA and the Higher Institute for Labour ofthe Catholic University of Leuven (Belgium) in a clear and straightforward manner.

The authors analyze the 'Europe 2020' policy regarding the target 75% of the 20-64 years-old to be employed in 2020. Today a very topical issue in the EU where unemployment rates are rising fast because of the economic crisis that followed after the financial crisis in the Eurozone countries. To find out what will be the employment rates in the EU in the year 2020 the researchers used the rather simple forecasting methodology assuming that the participation patterns of European citizens will show the same patterns as in the decade before ( the EU Lisbon agreement 2000 – 2010). Based on this methodology it is expected that “the employment rate will rise very moderately between 2010 and 2020 to achieve an employment rate close to 70% in 2020.”

The authors expect “that two elements are in favor of the employment target set by the European Commission for the next decade.” First of all, our forecast is encouraging for European policymakers, as the number of countries within target would increase from 5 to 6 countries and 8 other countries come close to the target in exercise. The number of countries with an employment rate of more than 10% below target would be reduced from eleven to six countries. Secondly, the opportunity given by the European Commission to translate the 75% target into national targets has been inspiring and possibly motivating individual Member States to work out a feasible national strategy with regard to employment rate progress.” (page 16 – 18)

The most important issue however is how to reach this employment rate of 75%? On this point the authors make some critical observations on the recipes offered by the European Commission. The European policy makers suggest 3 paths in the quest for more employment:

1. Reducing the cost of labour by reducing social security contributions, flexibility in entry wage setting, a wider use of in-work benefits..

2.Attract inactive people to the labour market: enhance greater internal flexibility, flex-time, extend day-care facilities, link unemployment benefits to training/job search etc...

3. Education and training: responsiveness of training to the labour market, support targeted training...

Regarding the number one proposal, that is to reduce labour costs, the authors come to a remarkable conclusion after analyzing EU labour statistics: “there is no strong relation between reducing the labour cost and a positive evolution of the employment rate in European Member States.” (page 21) This means that the idea of the European policymakers that work will become attractive for employers by reducing labour costs does not work so well. Therefore the authors propose an alternative way which is to make work more attractive for workers by ensuring decent jobs. “As workers have the prospect of a high-quality job, the reward of working time is bigger than the reward of free time, and more people will be motivated to invest their time in a job. So, raising the job quality will be positively linked to more workers and a higher employment rate.” (page 23)

This positive relationship between job quality and employment rate should be supported firstly by raising the human capital of workers. “Investment in training and learning opportunities increases individual productivity, but also the productivity of co-workers through spill-over effects. Secondly, workers' security induces economic growth. Elements such as job protection, safe working conditions, fair wages, and access to social protection may also increase productivity and participation, and therefore favor growth and labour supply. In addition, many security mechanisms work as automatic stabilizers, which are particularly helpful during economic downturns. “ (page 23-24)

Following these conclusions the authors look for ways how to make work attractive as an alternative way for creating more employment. The result is a list of elements that define work quality: work autonomy, work intensity, physical risk exposure, psychological risk exposure, level of team autonomy, meaningfulness of work, wages and social benefits, suitable working times, job security, skills development, career opportunities, voice.

Because of the foregoing it is not a surprise that the authors propose the development of a 'decent employment rate' that in the future will accompany the employment rate that is “calculated by dividing the number of people working in decent employment by the total population.” (page 49)

They call the unions “to promote actively the economic and social advantages for employers and employees that emerge through the introduction of good work quality policies... Workers' organizations should also insist that good practice examples from European countries are, where applicable, considered, promoted and possibly adopted by other Member States.” (page 50)