Commission reports on employment in wake of terrorist attacks

In January 2002, the European Commission issued a report examining the employment implications of the recent economic slowdown and of the terrorist attacks on the USA on 11 September 2001.

The European Commission issued on 15 January 2002 an autumn update of its Employment in Europe 2001 report (EU0107230F), based on forecasts made in November 2001. The update's main message is that employment growth forecasts have been revised downwards for the coming months, but that it is expected that economic recovery from mid-2002 onwards will once again stimulate employment.

After employment in the EU grew by 2.1% in 2001, the forecasts are for 'moderate' growth in 2002 and for an average overall employment rate of 64.3% compared with the current 64.0%.

The average EU unemployment rate increased slightly in October 2001, to 7.8% compared with 7.7% the previous month, and is expected to increase further during 2002. The new report notes that the current economic slowdown has affected all sectors of the economy, including the 'high-tech' and 'knowledge-intensive' sectors which have over the past years acted as the drivers of employment creation. It states further that aviation, tourism and other travel-related sectors have particularly suffered.

The report maintains that although the terrorist attacks of 11 September 2001 on the USA have had a special impact on employment, a downward trend was in evidence before these events and so 'at this stage, few job losses can be directly attributed to the events of 11 September, although these events might have an additional negative impact in 2002.'

According to the update, the employment targets of an overall employment rate of 70% and a female employment rate of 60% by 2010, set at the Lisbon European Council in March 2000 (EU0004241F), might not be viable if economic slowdowns 'adversely affect longer-term potential growth through a depreciation of human capital or a deterioration of quality in work'.

Following the publication of the update, the Commission issued, on 24 January, proposals aimed at improving labour market participation and promoting 'active ageing', to be submitted to the Barcelona European Council in March 2002. The Commission notes that, in order to fulfil the employment targets set at Lisbon, 20 million new jobs must be created, of which 11 million must be reserved for women and 5 million for workers over the age of 50. It states that this will require a sustained effort on the part of all Member States, and proposes that action should be concentrated on areas such as: training and skills acquisition; decreasing the pay differential between men and women; reducing school drop-out rates; balancing work and family responsibilities; and removing incentives for employees to retire early.