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Joint Employment Report 2005/2006
The report on the annual situation follows the previous report without making any real changes to its conclusions. This document concludes that it is essential to move up a gear in implementing the Lisbon Strategy. It takes stock of the progress made by the Member States in implementing the guidelines for growth. Despite the effectiveness of certain reforms, this report considers that the Member States should be more ambitious, particularly as regards the development of human capital.
Joint Employment Report 2005/2006 - More and Better Jobs: Delivering the Priorities of the European Employment Strategy
The joint employment report highlights the guidelines of the European Employment Strategy with a view to achieving the objectives of the Lisbon strategy. It is based on the decisions taken at the European Council of March 2006, and on the comments on the Member States in the European Commission's 2006 annual report on growth and employment. This evaluation is not an assessment of the overall policies or systems in the relevant areas.
This document does nevertheless ascertain the need to speed up implementation of the Lisbon strategy. The European economy has the potential to make a substantial step forward in creating more and better jobs.
The report draws conclusions from the reforms carried out in the Member States which have helped to raise the employment content of growth, encourage wage developments, and lower rates of unemployment. For the EU as a whole, however,
the scope of reform has lacked ambition. The report emphasises the lack of progress made in fuelling more economic and employment growth.
Achievements and shortcomings
More ambitious policies should result in a sizeable increase in economic growth and in lifting the employment rate well above the current 63.3% stated in this document towards the 70% employment rate target by 2010.
Despite some progress over the years, such as the increase in employment rates of women and older people, the overall employment rate remains 7 percentage points or some 20 million jobs below the 2010 target. Long-term unemployment rose to 4.1%, this figure including youth unemployment which stands at around double the overall rate. Regional employment and unemployment disparities also remain widespread.
Attracting more people to the labour market is a priority for the Member States, and this objective is, of course, welcome. In order to make such policies effective, this approach should be complemented by a lifecycle approach. There is also a need to review the structure and sources of financial investments in education and lifelong learning.
The application of the National Reform Programmes (NRPs) is in line with the country-specific Employment Recommendations. The report does, however, contain evidence that government ownership of the strategy at national level seems well articulated, but there is less indication that the agenda is shared across society and is firmly built on social partnerships for reform.
According to this report, progress in terms of increased quality at work remains mixed. Participation in lifelong learning has risen, as have youth education levels, but few Member States pay attention to the synergies between improved quality and productivity at work and to developing employment.
The report emphasises the lack of importance attached to the adaptability of workers and enterprises. In many Member States, the current balance between flexibility and security has led to increasingly segmented labour markets, with the risk of augmenting the precariousness of jobs and limiting human capital accumulation.
Avenues to be explored
The European Employment Strategy (ESS), which is the employment section of the Lisbon strategy, is based around three key objectives for meeting the conditions required to improve Europe's employment performance. These are:
- full employment;
- quality at work, and social and territorial cohesion.
The employment guidelines, which determine the "employment" aspect of the NRPs, provide the policy framework to focus action. The aim is to:
- attract and retain more people in employment, increase labour supply and modernise social protection systems;
- improve the adaptability of workers and enterprises;
- increase investment in human capital through better education and skills.
In order to better focus further implementation of the Lisbon strategy, the report asks the Member States to take account of the following aspects:
- demographic trends should encourage politicians to adopt a lifecycle-based approach to labour, with a view to facilitating employment and career transitions. It is crucial that these active policies operate in better synergy with social protection instruments;
- particular attention must be paid to labour supply and improving employment opportunities for target groups such as young people, women, older workers, people with disabilities and immigrants and minorities;
- both demand and supply measures are crucial for Europe to address globalisation and facilitate the transition to a knowledge based economy. This is why measures for those with low skills and low pay on the margins of the labour market need more focus;
- human capital development is crucial, thus the importance of paying more attention to the provision of financial incentives for education and lifelong learning, and to improving the efficiency of investment in human capital;
- the implementation of strategies aimed at improving the adaptability of workers and enterprises, including labour mobility, need to be developed. Member States should address flexibility combined with employment security, and avoid labour market segmentation by taking as their basis a set of common principles on flexicurity drawn up by the Commission together with the Member States and social partners.
In 2007, the assessment of the Member States' labour market performance will provide a sound basis for maintaining the momentum for reform and may lead, if necessary, to country specific recommendations. Bilateral contacts between the Commission and the Member States will be beneficial and help to improve governance of the strategy in the field of employment.
For a detailed analysis of recent trends and performances in the EU labour market, please see the European Commission's "Employment in Europe 2004" report. For the latest macro-economic updates, see the European Commission's "Economic Forecasts Spring 2005" [PDF].