The economic recovery which started in the EU in the spring of 2013 remains subdued and recent GDP forecasts for the EU have been revised down. However, despite the weak macroeconomic background, employment has shown a small but consistent growth in the EU since mid-2013, according to the latest Employment and Social Situation Quarterly Review. Employment has increased in the large majority of EU Member States, including in countries with very high unemployment rates such as Greece, Spain and Portugal. It has also improved across the large majority of sectors, expanding significantly in the services sector.
As the Review shows, all types of employment are growing. This means not only temporary and part-time employment, but also permanent and full time. However, the return to pre-crisis unemployment levels is less rapid than hoped for.
Commissioner for Employment, Social Affairs, Skills and Labour Mobility Marianne Thyssen, commented: "Though the employment growth we witness now is positive, it is still too small and too slow. Especially long-term unemployment remains a crucial challenge for the EU. With our €315 billion Investment Offensive we have the ambition to boost economic growth and to create more jobs. In addition we also need targeted action to help those who have been unemployed for a long time."
Many challenges remain, in particular long-term unemployment and low employment opportunities for youth (15-24) and young adults aged 25-39. The unemployment rate of young people has fallen significantly in the EU but remains very high. Long-term unemployment is a growing problem in the EU. In the second quarter of 2014, a total of 12.4 million people (5.1% of the labour force) had been unemployed for more than one year, and more than half of these had been unemployed for more than two years. In Greece and Cyprus, long-term unemployment rates have reached historic highs.
The growth in household income (GHDI) in the EU continued, but at a slower pace. Fragile economic recovery and challenges in the labour market have impacted on the modest developments in the situation of households and individuals. The easing in financial distress in low-income households, observed in the first half of 2014, appears to have halted in recent months.
Tax reforms as an instrument to reconcile efficiency and equity concerns
The reduction of the tax burden on labour has been an essential part of the 2014 Country-Specific Recommendations. In a context of fiscal consolidation, the policy options recommended are the shift from the tax burden on labour to less growth-detrimental sources and the fight of tax evasion and avoidance in a number of Member States. The review shows that up to 2012 (latest data available) in less than half of the Member States the tax burden on labour decreased, while only in few countries it was accompanied by an increase in the tax burden in consumption. The fight against tax evasion and avoidance can contribute positively to budgetary and employment goals, whilst achieving social goals.
Employment in the health care and social services
The health and social services sector is characterised by a better skilled workforce than the rest of the economy but also by a higher gender pay gap, harder working conditions and a high rate of part-time work which might lead to challenges in attracting new workers into the sector. Nevertheless, the sector will generate an increased number of jobs due to ageing labour force in the sector, increased demand due to the development of new needs driven by the demographic changes, the economic and social consequences of the crisis, growing inequalities, technological developments or changing social patterns. The economic and financial crisis has played a double role in relation to health and social services: on one side, it has shown that these services can cushion the impact of the crisis. On the other, budget constraints had an impact on the financing of health and social services through significant cuts in the spending on in-kind benefits.
For more information
- News item on DG Employment website
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