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European Commissioner responsible for Employment, Social Affairs and Inclusion
Youth unemployment – our shared concern
Opening of the EU-LAC Social Cohesion Forum /Buenos Aires,
15 October 2012
It is a great pleasure for me to be here with you today and open the EU-CELAC Social Cohesion Forum on my first visit to Latin America and the Caribbean as European Commissioner for Employment, Social Affairs and Inclusion.
Europe, Latin-America and the Caribbean are strategic partners. We share a lot more than just a powerful trade relationship. We are tied by culture, history, language, and democratic values. Today we have to put our relationship into the perspective of economic and political globalisation. The world is changing, our regions are changing, so our relationship must adapt.
Therefore we need to reaffirm our strategic partnership and strengthen our cooperation. It is in our both regions' interest to work together to promote our interests and values, contribute to peace and security, promote human rights, strengthen democracy and protect our citizens from the consequences of the global financial crisis and the economic recession.
Employment and social cohesion have been important areas of the bilateral cooperation between the European Union and Latin America. Our regular dialogue, which has started in 2004 in Guadalajara, shows how much we share and the magnitude of the challenges facing us. Over the years, we have had several opportunities to discuss and exchange experiences and best practices between our two regions on employment and social issues.
The most recent Social Cohesion Forum held in 2010 in Peru focused on the promotion of decent work for young people. We tried, at that time, to identify together solutions and concrete actions for youth employment in our regions. We made valuable recommendations to the 6th EU - LAC Summit, held in Madrid. I think these recommendations are still relevant today: to encourage labour market integration of young workers into decent jobs and ensure that education and training systems offer young people the competences they need in the labour market.
And here we are today to discuss, in light of the current economic crisis, the need to ensure coherence between economic growth, employment and social cohesion. We are here again to see how we can address the issue of youth employment since unemployment among young people is a growing challenge across the world.
Since our forum is a platform for exchanging ideas between our two regions, let me share with you the experience of the European Union.
Indeed the crisis has been taking a heavy toll on our economies and society. This is why all our efforts are now geared towards leaving this crisis behind and setting foot on a path of growth with quality jobs and decent social conditions for all.
For this we have our master plan: the EU's long term growth and jobs agenda, the Europe 2020 strategy. In this we are not only aiming for growth, but for smart, sustainable and inclusive growth for the benefit of all our citizens. To achieve this through these difficult times, we strengthen economic and budgetary coordination for the EU as a whole and align them better with employment and social policies. As a result, the EU’s interdependent economies will be better placed to chart a path to growth and job creation.
For us the major challenge remains unemployment. Today, over 10% of EU workers — and over 11% of euro-area workers — do not have a job. Behind these headline figures there are specific problems. First, nearly a quarter of young people looking for a job in the EU cannot find one. That figure rises to over 50% in some Member States. Many other youngsters are working in precarious positions with uncertain prospects.
Secondly, long-term unemployment is rising fast. The latest data show that 4.5% of our active population — more than 10 million people — have been unemployed for over a year. Long-term unemployment not only undermines people’s chances of getting back into employment, but also points to the structural weaknesses of the labour market — its inability to reabsorb job losses.
Lastly, the crisis is also affecting the quality of employment. Segmentation of the labour market, wage polarisation and low wages feeding the phenomenon of "in-work poverty" are further driving factors of inequality in our workforce. 8.4% of employed people in the EU today fall below the poverty line. This worsening of labour market conditions has badly hit the income of many Europeans.
Dealing with these issues is one of the fundamental elements in restoring growth and jobs in the EU. So how are we responding to these challenges?
To overcome the effects of the economic crisis and prepare the EU economy for the next decade, we have launched the Europe 2020 Strategy. We have set up ambitious but realistic targets for 2020: a target employment rate of 75%, with fewer people dropping out of education and more people achieving higher education qualifications. Also to reduce the number of those living in poverty and social exclusion by at least 20 million. Those targets form the basis for the economic and social model we are striving to build — a Europe that is smart, sustainable and inclusive.
The European Union is very diverse. This gives the EU its strengths, but it is also something we have to pay high attention to when it comes to designing policies. We have 27 Member States, soon we will be 28 with very different situations and traditions, labour market relations and economic and financial cultures. However, we all face the same challenges and we are ready to find a joint response to overcome the crisis and its adverse effects
This is why, at European level, we have launched in April this year an "Employment Package" to multiply efforts needed for a job-rich recovery. The Employment Package sets out a medium-term agenda, based on a job-centred approach to recovery, covering three main areas:
First, it emphasises the need to refocus on the demand side of the labour market and support job creation. Supply-side labour market policies like training and activation are important, but fundamentally we need to boost demand for labour, in particular in areas with the greatest employment potential (green jobs, ICT and health services).
Secondly, it makes the case for a more dynamic EU labour market and identifies and offers support for balanced labour market reform in our Member States. A dynamic labour market enables people to progress in their careers and improve their situation. That means creating the conditions for a true common labour market by removing barriers to free movement and promoting mechanisms that can enhance skills matching across borders.
Thirdly, the Employment Package sets out ways of stepping up coordination and multilateral surveillance of employment policy at EU level — with greater social partner involvement in the process.
The agenda for a job-rich recovery we have set out is about bringing together reforms and investments, connecting macro- and micro-economics and creating synergies between different policy fields. But most of all it’s about bringing people together. Social partners, national parliaments, companies, ministries, regional and local governments, EU institutions, labour market institutions – we all have to work together in order to put people to work and in that way generate an inclusive recovery in Europe.
Let me come back to the issue of youth employment, since this is a shared concern of our two regions and even beyond. Even though Europe is confronted with an ageing population, while the one in Latin America and the Caribbean is still very young, the future of our young generation on both continents should preoccupy us equally.
The unemployment rate for young people is more than twice the rate for adults. And those young people who have managed to find jobs face other hardships. Many young people work part-time — sometimes by choice, more often by lack of an alternative, while a great number of young people are neither in employment, nor in education or training.
The EU is taking this problem very seriously. We put young people at the centre of policy making with a special agenda for improving their education, training and employment.
In 2010, we launched a new initiative to help more than 400 000 young people to work, train and study abroad every year. In addition, we keep placing much emphasis on improving the conditions for youth entrepreneurship, traineeships and apprenticeships, and we will soon introduce youth guarantee schemes to ensure that young people will be in work, training or education within months of leaving school. All these programmes are backed by substantial funding from the EU budget.
The other issue I would like to mention here is poverty. The current economic crisis, and the austerity measures taken to address it has already had a huge social impact. It has deeply affected our citizens. Therefore improving social cohesion within our growth model is not only an intelligent way forward; it is the only way forward.
Poverty always means fewer opportunities, curtailed dreams and wasted potential. In the case of children, it is our future that is at stake. Breaking the cycle of exclusion and interrupting this route to joblessness is one of our shared biggest challenges. To complicate matters, the face of poverty is changing. Families are more fragmented and inequalities have grown in our constantly evolving and interconnected global economies.
Therefore, reducing poverty is another area where our regions could learn from each other's experiences. We are looking into the Latin American success stories such as Mexico's Progresa Oportunidades, Brazil's Bolsa Escola and Bolsa Familia, Panama´s Red de Oportunidades and Chile's Chile Solidario, to mention only a few. And we are happy to share our experience and best practices from all over Europe.
We have set up a very ambitious target: to reduce poverty and social exclusion by at least 20 million by 2020. We act on the various factors that contribute to social exclusion, help people to develop their skills and get better jobs and we shape labour markets in a way to create more opportunities for people living with disabilities or belonging to vulnerable minorities. We are improving our social services, and to help men and women to reconcile family and work. All this is based on the right national and local strategies, but also EU level efforts to coordinate employment and social policies, and support them with EU and national financial instruments.
This brings me to the importance we attach to social dialogue. It is essential for the European social model and for the acceptance of reforms and their successful implementation. Social dialogue also improves economic resilience and helps employment at macro level, as well as at the level of an enterprise. Social dialogue must take place on all levels, from the enterprise through sectoral and national levels to the EU level. Those who believe that social dialogue contradicts economic competitiveness should think again.
The economic crisis triggered a new momentum for strengthening dialogue on the employment and social dimension of globalisation at the international level. This year the G20 Employment and Labour Ministers in Guadalajara as well as the G20 leaders in Los Cabos emphasised that quality employment should be at the heart of our macroeconomic policies. Jobs with labour rights, social security coverage and decent income contribute to more stable growth, enhance social inclusion and reduce poverty. Creating jobs and reducing unemployment, particularly among our young people and those most affected by the crisis, should be central to all our countries.
As President Barroso said in his recent State of the Union speech, we are seeing a real social emergency. But this does not mean that our social model is dead. We need to reform our economies and modernise our social protection systems. An effective social protection system is not an obstacle to prosperity. It is an indispensable element of it. Indeed, the European countries with the most effective social protection systems and with the most developed social partnerships are among the most successful and competitive economies in the world.
It is necessary to continue promoting coherence between social, economic, financial, environmental and all other policies at national and international level, so that they are efficient and have an impact on quality employment and social cohesion.
I would like to conclude by saying that it is essential to continue our bi-regional dialogue on employment and social policies and focus on aspects that add value to our common engagement in global fora, notably in the G20 the ILO and the Rio+20 process. We should also intensify our efforts to strengthen cooperation in education, skills development and training policies. I wish you all a fruitful discussion during these two days of the forum.