Joint employment report (2000)

1) OBJECTIVE

Present the employment situation in the European Union - both overall and at national level - and examine the measures taken by the Member States to implement the employment guidelines for 2000.

2) COMMUNITY MEASURE

Joint employment report 2000 (Part I)

3) CONTENTS

The joint employment report consists of two parts. The first part contains a comparative overview of the current situation and the results of implementing the employment guidelines for 2000 in the Member States across the four pillars (improving employability, developing entrepreneurship, encouraging adaptability of businesses and their employees and, finally, reinforcing equal opportunities for women and men). The report also cites certain examples of good practices implemented by certain Member States.

The joint report analyses the National Action Plans for Employment (NAPs) on the basis of the data provided by the Member States before 1 May 2000. The conclusions of the preceding report may be reflected in the new one. Indeed, it seems that the Member States have adopted a decidedly more preventive approach in combating youth unemployment and long term unemployment.

The Luxembourg process, by enshrining an ambitious framework for policy coordination, requires the preparation of comparable quantitative objectives at European and national levels. The Lisbon European Council laid down the objective of full employment for 2010, while establishing priorities such as the development of information technology in the knowledge society and the integration of the concept of lifelong learning in the four pillars.

Economic context

Economic growth accelerated as from the second half of 1999. The figures published in the report show that GNP grew by 2.5% in 1999 and by 3.4% in 2000. These high figures have had a beneficial effect on employment.

The unemployment rate fell from 9.2% in 1999 to 8.7% in 2000 and the current trend suggests that it will be below 8% in 2001. However it is still too high and efforts to reduce it must be sustained because large regional disparities still exist. Structural problems persist, despite the improvement in the figures, partly due to the high growth rate (2.4% in 1999).

The employment rate, which is one of the objectives defined at the Lisbon Council, rose from 61.3% in 1998 to 62.2% in 1999.

Women were the primary beneficiaries of the recovery: their employment rate rose from 51% to 52% between 1999 and 2000, while the employment rate for men rose from 71% to 71.5%. Although youth unemployment is at its lowest level since the Eighties, it is still too high.

The economic upswing also reduced long term unemployment, although it remains a serious problem in the EU.

Most of the jobs created were in the services sector and to a lesser extent in industry, while the employment rate in the primary sector (agriculture) continued to fall.

There are also geographical disparities. Hence, certain Member States have already achieved the 70 % employment rate. This applies to Sweden, the United Kingdom, the Netherlands and Denmark, which leads the field with an employment rate of 76.5%. At the other extreme we have Spain, Italy and Greece -the latter being the only country in which the employment rate actually fell in 1999. There are also considerable disparities between the regions.

The report also notes that European achievement in raising the employment rate must be seen in relation to trends in the full-time equivalent (FTE) employment rate, i.e. the trend in the number of full-time equivalent jobs. The FTE employment rate has risen in Europe but to a considerably lower extent than the gross employment rate.

Evaluation of the NAPs

The NAPs are based on the four priority strands (pillars) which impose common guidelines on all the Member States while leaving them a margin for manoeuvre to respond to national needs. As regards implementation of the three first guidelines - which concern youth unemployment, long-term unemployment and the reinforcement of active measures - real progress has been made.

On the other hand, where the guidelines do not propose any quantitative objective, their implementation has been far less consistent.

Pillar I: employability

A high level of education is crucial for an efficient and adaptable labour market. There are still considerable differences between Member States in this area. These differences are even greater in the field of lifelong learning.

The preventive approach, defined by guidelines 1 to 3, seems to have borne fruit in 2000, to the extent that the Member States which have low levels of long-term unemployment are those which have wholeheartedly implemented this approach.

The objectives of lifelong learning must be pursued more rigorously by the Member States, and particularly by those which have been lagging behind.

Pillar II: entrepreneurship

Entrepreneurship and the creation of jobs are closely linked. Companies must benefit from the simplification of administrative procedures, for example via the opening of one-stop offices. Access to finance must also be simplified.

Pillar III: encouraging adaptability of businesses and their employees

The third pillar focuses on the two objectives of modernising the organisation of work and promoting the adaptability of businesses. It is based on the concept of the economics of knowledge, which makes it possible to achieve a higher level of innovation, added value and productivity.

Government, firms and social partners are invited to cooperate closely in order to modernise the organisation of work and to encourage the adaptability of businesses, chiefly by promoting lifelong learning.

The report points out that the NAPs have not yet made much headway in this area. Besides, the degree of involvement of the social partners in this consultation process differs from one Member State to another. The tight labour market, combined with greater demand in certain sectors, has led certain Member States to modify their immigration rules for certain skills, such as professionals employed in leading-edge sectors.

Pillar IV: reinforce equal opportunities between women and men

Large inequalities still exist between women and men on the EU labour market. The employment rate for women is 53 %, or 18.2% points lower than the male employment rate. The report notes that the Member States with the lowest employment rates and the greatest gender gaps (Spain and Greece) have not yet taken adequate measures to rectify this situation.

Numerous measures have been adopted, although they are sometimes hard to evaluate, in order to reduce the gender pay gap. Member States differ considerably as regards measures to reconcile work and family life.

Horizontal aspects of implementation of the NAPs

The report 2000 notes that the Member States seem to becoming more aware of the need for lifelong learning, which corresponds to guideline 6 of the Employment Guidelines. However, it regrets that the approach of most of the Member States is overly piecemeal and that they normally limited to the notion of permanent training or reskilling.

The priority attached to information and communication technologies in this area seems to have been well integrated by the Member States.

As required by the new planning rules for 2000-2006, the NAPs furnish particulars on the use of the European Social Fund (ESF) in implementing the European Employment Strategy. The Council's recommendations concerning the implementation of the Member States' policies are used as a basis for incorporating the ESF in the new programmes.

Although there are still numerous gaps and room for improvement, the Member States paid more attention to equal opportunities between the sexes in their NAPs in 2000.

At the special Lisbon European Council, which took place half way through the five-year cycle of the Employment Strategy launched by the European Council in 1997, the Commission and the Member States were invited to review the Luxembourg process. The contribution of the latter to reducing unemployment in Europe was recognised and the Lisbon Summit extended the "open coordination method" between the Member States.

However, it was noted that there was an imbalance in the implementation of the four pillars: employability remains the "privileged" pillar.

The current economic upswing and the transition to a knowledge economy have had a positive impact on European labour markets. Certain structural problems, such as the high rate of long-term unemployment, have yet to be resolved, while others are emerging, such as population ageing. Against this backdrop, the conclusions of the Lisbon Summit focus on lifelong learning.

Other improvements must be made, such as the need to accelerate the adoption of the annual "employment package" and to involve the social partners more closely in the debate. With a view to further improving the dissemination of good practices, new indicators should be prepared, something which should also facilitate comparisons between Member States.