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Mr. László ANDOR

EU Commissioner responsible for Employment, Social Affairs and Inclusion

"Addressing Europe's employment and social challenges in a coordinated way: Employment and Social Developments Review 2011"

Employment and Social Developments in Europe 2011 Conference

Brussels, 9th February 2012

Ladies and gentlemen,

I am pleased to open today the conference devoted to our new analytical review: Employment and Social Developments in Europe (ESDE).

This review is the Commission's key analytical document for 2011 and I had the pleasure of presenting it to the press upon its publication in mid-December. This conference gives us a very timely opportunity to dig further into the detail of the review.

The EU employment and social policy agenda is developing quite rapidly, as we have seen the Annual Growth Survey for 2012 and in the conclusions of the informal European Council 10 days ago. It is therefore very good to reflect again on our analytical findings.

The review merges and replaces two previous reports – Employment in Europe and the Social Situation Report. It brings together a comprehensive analysis of some of the key challenges facing the EU in the areas of both employment and social policy.

This conference should be seen as one oriented on policy. In this sense, it represents a continuation of the conferences we held in the autumn on wage trends and inequalities.

Ladies and gentlemen,

As we stressed in the 2012 Annual Growth Survey, the EU must address the economic, employment and social dimensions of the crisis together.

Greater labour market participation and social inclusion are essential for job-rich growth and they are key elements of the Europe 2020 strategy.

The Review's analysis is also an important underpinning for the Employment Package which we will put forward in April and which will address job creation and labour market efficiency.

Today, we are going to group and discuss the 6 chapters of the Review in 4 panels:

  • one on poverty;

  • one on inequality and shifts in the jobs structure;

  • one on ageing;

  • and the last one on labour mobility following the enlargement.

Let me say a few words on what I think are some of the Review's key findings as food for thought for the panels, especially showing the interlinkages between employment and social policies.

1. Growing difference in wages and the social implications

First, the review describes the trend of growing differences in wages in Europe – or a “polarization” of the labour market. This has been a longer term trend, but has deepened during the crisis, mainly through the massive destruction of medium-paid jobs, especially in manufacturing and construction.

At the same time, the best paid jobs (the top 20%) were the only ones to see a moderate increase, even during the crisis.

This shows us how the structure of our economy changes. Some types of jobs disappear but not all of them are replaced sufficiently soon by similar or better paying jobs.

It is a labour market phenomenon – but it has an important social impact: this polarization of the jobs structure has contributed to the trend of increasing income inequality.

The review looks at combined policy solutions. For example, combining labour market activation measures, fairer taxation of top incomes and wealth, and more effective social investment.

A crucial question we have to ask ourselves during this European semester is, how to use these and other combined policies to reverse growing inequality and promote employment.

2. Poverty measurement and the working poor

The second issue analysed in the Review and on the agenda today, is poverty, its patterns across Europe, the challenges involved in measuring it, and the specific problem of in-work poverty.

The whole issue of poverty of course has a very strong labour market dimension.

Having a job should normally be the best safeguard against poverty and social exclusion, but it is not always the case.

Over 8 per cent of people with a job in the EU are at risk of poverty – this is what we call the "working poor". And almost a quarter of the Europe's population is at risk of poverty or social exclusion (115m for 2010).

But while in Eastern European Member States the main problem is severe material deprivation, in the Northern and Western Member States the biggest issue is exclusion from the labour market. That is why it is essential to take into account national specificities and to develop well designed packages of employment and social policies when tackling poverty.

But as society develops and human needs change, we have to ask ourselves whether our poverty indicators are still fit-for-purpose. Issues like energy poverty of digital illiteracy might be more relevant today than they were a few years ago.

It could be therefore useful to discuss today the question whether we need to measure also other aspects of poverty and exclusion than those we are measuring today. And if so, which ones?

3. Active Ageing

The topic of active ageing, which will be addressed by the third panel, is another example where policies have to be combined. Given the demographic projections, we know that achieving the overall employment rate target of 75 % by 2020 depends on sustained progress in increasing employment rates among older people.

Active ageing means not only working longer, but also:

investing in lifelong learning;

adapting working conditions to the needs of older workers;

developing options for "second careers" or arrangements for combining part-time work with partial pension;

providing care for the very old or those who are not healthy enough to work (in order to prevent their children being obliged to exit the labour market to provide this care);

AND it also means providing more care structures for young children (in order to avoid that, against their wish, young mothers exit the labour market or older people retire earlier than expected to care for their grandchildren. This is a question of solidarity between generations!

Most of these aspects of active ageing are of course linked to my previous points about the labour market structure, inequalities, poverty and coverage of social services: Let's not forget that care structures have a cost! It may be difficult for a low-paid worker to put members of his family in care, if the cost is higher than what he earns. This is why provision of cost-effective social services is so important.

4. Workers' Mobility

Finally, the Review looks also into the issue of workers' mobility within the EU. The findings confirm that, for most countries, the opening of labour markets has not had any significant impact on local levels of unemployment or wages, while the risks of brain drain for the countries of origin seem limited overall. At a time when we see increasing mismatches between the supply and demand for labour, barriers to geographical mobility can constitute real bottlenecks for growth. This is something we will also look into within the Employment Package, as one of the key dimensions of the single market is the single labour market.

Ladies and Gentlemen,

As I mentioned, noted, the Employment and Social Developments in Europe review will be an important basis for the upcoming Employment Package, but it will also underpin our efforts in the context of the European Semester.

I know it will also serve national policy-makers as it shows the big European picture, provides comparisons across countries and analyses key structural issues. It could be therefore useful in the preparations of updated National Reform Programmes.

And last but not least, the analysis will feed into the actions within the framework of the European Year of Active Ageing and Intergenerational Solidarity.

By way of conclusion let me just say that I will be very interested to learn what you think of the analysis presented in this review and how we can improve it and make the best use of it in our policy formulation.

I would also like to know what aspects of employment and social developments in Europe are in your view under-researched, which areas could we focus on for the next annual Review and should be part of our longer term research agenda.

Thank you for your attention and I wish you a productive and inspiring conference.

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