On 14 October 1998, the European Commission adopted its proposal for the 1999 Employment Guidelines. These stress the need for continuity and consolidation and closely follow the 1998 Guidelines, but contain further emphasis on measures to help integrate people from ethnic minorities into the labour market, promote lifelong learning and promote the job-creation potential of the services sector. The Guidelines were informed by the 1998 Employment Rates Report and the draft 1998 Joint Employment Report, which were published on the same day. The former charts the employment performance of the EU and the latter highlights the experience of the implementation of the 1998 National Action Plans on employment.
On 14 October 1998, the European Commission adopted its proposal for the 1999 Employment Guidelines, within the framework of the European employment strategy. The drawing up of annual guidelines for EU Member States' employment policies arose from the decision at the June 1997 European Council meeting to implement the new "employment chapter" of the Amsterdam EU Treaty in advance of the Treaty coming into force (EU9707135F). A set of draft guidelines for 1998, drawn up by the Commission, were approved by the Council following the extraordinary "Employment Summit" in Luxembourg in November 1997 (EU9711168F). The 1998 Employment Guidelines were subsequently incorporated by the Member States into National Action Plans (NAP s) for employment, which were submitted in April 1998 (EU9805107N) and evaluated at the June 1998 Cardiff European Council (EU9806109F).
The draft 1999 guidelines, which were presented by Commission President Jacques Santer and Pádraig Flynn, the Commissioner responsible for social affairs and employment, propose a series of key policy measures which the Commission considers essential, if the Member States are to build on the progress made during 1998. The Commission argues that there is a need for consistency to consolidate these achievements and has therefore kept changes in relation to the 1998 guidelines to a minimum.
The Employment Rates Report 1998
The draft 1999 guidelines draw on the assessment and analysis contained in the draft Joint Employment Report (see next section) and the 1998 Employment Rates Report, which were also adopted on 14 October. The latter document is the first such overview report on the EU's employment performance and was compiled at the request of the November 1997 Employment Summit. The report aims to present a brief analysis of developments in job creation and job losses across the EU, as well as to draw conclusions about the potential contributions that individual Member States could make to achieving a significant increase in the EU's average employment rate.
The report argues that the employment rate - the number of employed people as a proportion of the total population of working age - is an effective measure of the performance of an economy, in the sense that it measures how the economy is able to provide jobs for all those who are able to work. It focuses attention both on employment, and on the employment potential of the non-employed, including both the "economically inactive" population and unemployed people.
According to the report, the EU's employment rate has developed very unfavourably over the past 20 years, compared with that of the USA. In 1977, the EU's employment rate was 64%, whilst that of the USA was 62%. By 1997, the EU rate had dropped to 60.5%, while that of the US had increased to 74%. It is argued that a reversal of this downward trend would be beneficial for the following reasons:
- economics. The low employment rate in Europe means that there is a high level of unused potential labour stock. Employing these under-utilised labour resources could help to increase growth on a lasting basis;
- demographic ageing of the population. At the same time as life expectancy is increasing, the number of individuals aged over 55 in active employment in declining, placing additional pressure on the social security and public pension systems. This trend needs to be reversed; and
- social cohesiveness. It is important to limit the potential for social exclusion and to reduce the "gender gap". Women should participate in the labour market on equal terms in order to develop the full growth potential.
The report states that employment in France, Germany and Italy accounts for more than 50% of total EU employment. Significant improvements in the employment situation in these three countries alone, particularly in the areas of female employment, employment of older workers and in the services sector would therefore have a major impact on the overall employment rate in the EU.
The 1998 Joint Employment Report
The objective of the draft 1998 Joint Employment Report from the Commission and Council of Minister is to inform the Vienna European Council in December 1998 of the progress made to date under the Luxembourg process. It is based on the NAPs submitted to the Commission and the Council in April 1998 and the implementation reports presented in July 1998.
The main finding of the Joint Employment Report is that the Luxembourg process is being consolidated and the political momentum is being maintained. Employment strategies are argued to have become more systematic, consistent and transparent.
The report is structured across the four "pillars" of activity outlined by the 1998 Employment Guidelines- employability, entrepreneurship, adaptability and equal opportunities - and 10 examples of "good practice" are highlighted. Over the next year or so, there will be an assessment of the extent ti which this perceived good practice may be transferable to other Member States.
Employability
Member States are seen to have shown a high level of commitment towards the prevention of long-term employment through early preventive intervention and an increased degree of activation of labour market policy. Legislative, administrative and policy measures have been taken to offer a "new start" and to improve the capacity of employment services. The EU operational targets - the offer of a new start before six or 12 months of unemployment to respectively young and adult unemployed people, and the participation of 20% of unemployed people in training or equivalent measures - have been taken into consideration in all NAPs. However, differences remain in the way these targets have been addressed, depending on the different starting positions of different Member States, and the report underlines the need to work towards achieving the targets.
Entrepreneurship
While all Member States have committed themselves to instituting measures to assist small-business formation, the report argues that progress has so far been moderate. This is attributed to the length of time required to adjust regulatory and budgetary frameworks.
Adaptability
The Commission welcomes measures taken by governments and social partners to increase labour market flexibility and introduce innovations in working time and training. These measures have often been achieved through a process of lengthy negotiation and progress has therefore been fairly slow.
Equal opportunities
Overall, the extent to which measures in the NAPs have addressed the need to achieve greater equality of opportunity, in the labour market and society as a whole, is judged to have been disappointing. The Commission is calling for more decisive action in this area to enhance the reconciliation between work and family life.
The 1999 Employment Guidelines
In the light of the perceived need for continuing and greater emphasis on a number of measures under the 1998 Employment Guidelines, the Commission is proposing only a limited number of adjustments for 1999. These are as follows.
- More emphasis on active measures. There is a perceived need for a review and reform of tax and benefit systems to make it more attractive to take up work or training opportunities. A reassessment of measures such as early retirement schemes, which induce workers to leave the labour force early, is called for.
- Lifelong learning. The importance of lifelong learning in the development of a skilled and adaptable workforce is underlined, especially in the field of information and communication technologies. Member States should set themselves targets to increase the numbers benefiting from such measures, and easy access for older workers will be particularly important.
- A labour market open to all. Evidence shows that certain groups, for example, people with disabilities and from ethnic minorities, suffer disproportionately from unemployment and lack of opportunity in the workplace. It is proposed that special attention be given to groups and individuals experiencing difficulty in acquiring skills and access to the labour market, in order to promote their integration.
- Exploiting fully the jobs potential of the services sector. The EU is seriously lagging behind the USA in terms of job creation in the services sector. It is argued that future increases in the overall employment rate will depend on an expansion of jobs in services.
- Reconciling work and family life. More attention needs to be paid to the importance of affordable, accessible and high-quality care services and flexible working conditions in promoting the reconciliation of career and family responsibilities. The Commission is calling upon Member States to "mainstream" the principle of equality of opportunity throughout all the pillars of the employment strategy.
Speaking in Brussels on the occasion of the adoption of the proposal for the 1999 Employment Guidelines, Commissioner Flynn said that "the progress made in pursuing the Luxembourg process during the past year has been truly remarkable. It is important to remember, however, that whilst a process has been launched and plans put in place, success will ultimately depend on the implementation of agreed measures during 1998, and subsequent years, as well as committed participation by all concerned. After such a period of great activity, consolidation is now essential and we have therefore limited ourselves to a small number of adjustments for 1999."
Commentary
The 1999 Employment Guidelines contain few surprises. The overall emphasis remains the same as in 1998, with some added objectives in relation to the integration of people from ethnic minorities, lifelong learning and the job-creation potential of the services sector. No further targets are set in relation to the reduction of unemployment. The Joint Employment Report highlights the perceived successes of the European employment strategy in terms of a greater coordination of policies, but also points to the shortcomings of the 1998 NAPs. These are particularly marked in relation to equal opportunities policies and the Commission is now additionally calling for equal opportunities to be mainstreamed throughout all labour market policy objectives and measures. (Tina Weber, ECOTEC Research and Consulting)