Employment, labour market

and free movement of labour

in the EU
JSM508 European social policy
14 April, 2008
Liudmila, Antonio, Angela, Mirza (Group A2)

Overview

Employment/unemployment in the EU
(what EU does about it and how
efficient?)

Labour market, free movement of

labour

What is
employment/unemployment?

Employee a person employed for wages

or salary
Employment the action of giving work to
someone; persons work or profession
Unemployed - without a paid job but
available to work
Unemployment the number or
proportion of unemployed people
Oxford dictionary

Employment in Europe I
Overall performance
Employment
rates

2006 (%)

Objective for
2010 (%)

Overall

64.3

70

Female

57.2

60

Older
workers

43.5

50

Employment in Europe II
(Commissions Employment in Europe 2007 Report)

increased in all 27 Member States with over 4 mln

youth unemployment - major challenge (behind
U.S., Canada, Japan)
older workers employment rate is up
youth and older workers are two problematic
groups
inequalities in access to continuing vocational
training (CVT); government intervention needed
labour income share is influenced by technological
progress, openness to trade etc. Not all skills
categories benefit
flexicurity can bring more and more secure jobs

Flexicurity

a combination of flexible labour

markets and a high level of
employment and income security
approach oriented less towards the
protection of jobs, and more towards
the protection of people
in line with the central elements of
the EU strategy for growth and jobs

EU strategy I

Lisbon Strategy 2000 - a new strategy to

modernize Europe focused on more and
better jobs and growth. 2 main reasons:

to fight unemployment
to cope with demographic change

Simplified and relaunched in 2005. 2 main

targets by 2010:

total (public and private) investment of 3% of

Europes GDP in research and development
raise employment rate to 70% (for women 60%, for older workers - 50%)

EU strategy II - instruments
INTEGRATED GUIDELIINES FOR GROWTH AND JOBS (2008-2010)
Employment guidelines

(17) Implement employment policies aimed at achieving full

employment, improving quality and productivity at work, and
strengthening social and territorial cohesion.

(18) Promote a lifecycle approach to work.

(19) Ensure inclusive labour markets, enhance work attractiveness, and

make work pay for job seekers, including disadvantaged people and the
inactive.

(20) Improve matching of labour market needs.

(21) Promote flexibility combined with employment security and reduce

labour market segmentation, having due regard to the role of the social
partners.

(22) Ensure employment-friendly labour cost developments and wage

setting mechanisms.

(23) Expand and improve investment in human capital.

(24) Adapt education and training systems in response to new

competence requirements.

EU strategy III instruments 2

Mutual learning program exchange of

best practices in 4 main areas:
increasing adaptability of workers and
enterprises;
attracting more people to the labour
market;
investing more and more effectively in
human capital;
ensuring effective implementation of
reforms through better governance.

EU strategy IV - indicators

to assess Member States' progress

in implementing the Employment
guidelines

agreed on annual basis

for 2008 - two sets: 1. monitoring

indicators, 2 analysis indicators

Indicators 2

Analysis indicators (selected ex.)

Employment impact of parenthood

Dispersion of regional employment and
unemployment rates
Employment in newly established enterprises
Investment by enterprises in training of adults etc.

Monitoring indicators (some ex.)

Employment/unemployment rate & growth

Growth in labour productivity
Gender pay gap
Long-term unemployment rate etc.

How efficient?

The disappearance of mass unemployment is not the

result of a shrinking pool of labour; in fact the average
employment rate in the European Union has increased by
more than 6 per cent in 10 years. This is the only area in
which Europe is approaching the ambitious economic
targets set at the Lisbon summit in 2000.
Financial Times, 01/16/2008

the EU has created almost 6.5m jobs in the past two

years and 5m more are expected by 2009. Average
unemployment is expected to fall to below 7 per cent this
year, the lowest since the mid-1980s. The Lisbon
benchmark of getting 70 per cent of the adult population
into work by 2010, which escaped the EUs recent purge
of targets, no longer looks impossible.
Financial Times, 03/07/2008

Labour Market
and Labour Force Mobility
Part 2

General assessment

Europe still has about twice the

unemployment rate of the United States
There's a need for flexibility
The old Europe has a problem
The right to mobility for workers is one the
fundamental "four freedoms" of the
European Treaty
Worker's mobility is a driver for the
promotion of a comprehensive set of EU
social legislation

Positive macro-economic effects

GDP growth

lower long-term unemployment

higher employment rates

Positive micro-economic effects

access to new cultures and languages

increased adaptability to a quickly

changing work environment

increased job satisfaction

Fundamental Freedom

Free movement of persons is one of the

fundamental freedoms guaranteed by
community law (Article 39 of the EC Treaty)
and is also an essential element of
European citizenship

Community rules on free movement of

workers also apply to member states of the
European Economic Area (ie to Iceland,
Liechtenstein and Norway)

The plan

The first two-year period specified in the 2+3+2year scheme expired on 30 April 2006. The member
states have to declare themselves again on this
issue in May 2009.

Romania and Bulgaria joined the EU on 1 January

2007, their citizens are also be subject to a 2+3+2
scheme. This means that all labor movement
restrictions between the EU's present 27 member
states will be lifted by 1 January 2014.

United Kingdom
and the free movement

In 2004 together with Sweden and Ireland, the only one

not to impose transitional measures on EU-8 workers in
the first place.
Its open-borders policy led to an estimated labor
immigration of 450.000 to 600.000 within the two-anda-half years following the May 2004 enlargement; this
amounts to about 30-fold of what was previously expected.
In spite of the undoubtedly positive impact that the
immigration of EU-8 workers
The UK government decided on 24 October 2006 not to
apply a similarly liberal scheme to Romanian and
Bulgarian job-seekers
Under the scheme announced, only a few experts and
20,000 unskilled workers for the food processing and
agriculture industries will be allowed into Britain

EU Treaties and Reports

May 1999

November 2000
March 2000

July 2002

June 2003

July 2004
December 2007

Amsterdam Treaty EU commitment to work together in the

field of JHA
EU Council, Tampere I Comprehensive guidelines on
immigration and asylum policies on partnership with countries of
origin.
Communication on Community immigration policy
Lisbon Strategy
Goal: to become the most competitive and dynamic knowledgebased economy in the world; sustain economic growth with more
and better jobs and greater social cohesion
Danish Presidency, Copenhagen
Integration into the labour market "Conference
Thessaloniki European Council
Request on Annual Report on Migration and Integration in Europe
First EC Annual Report on Migration and Integration
Treaty of Lisbon
member-states have an exclusive right to determine the numbers
of foreign nationals admitted to their territory and that
cooperation on integration is upplementary and not about the
harmonization of laws.

The Polish Plumber

5-13000 people per year were

estimated on historic data, and in the
worst case is not likely to be large
600000 of Polish workers came to
Britain since Poland's accession to the
European Union
The growth of British population is
highest in 40 years, and has reached
the 60 million mark

Chart 1: Migration to/from the UK

Chart 2: Country of origin of

migrant workers

Chart 3: Reason for recruiting

migrants

Chart 4:
Most common A8 jobs

Positive aspect of migration

Britain benefited with an estimated 6

billion pounds to the nations economy
in 2006

Inflation pressure was reduced by

increasing supply of goods and
services

Problems with the migration

As Poland's economy develops,

immigration slows done, causing
labor shortages in Britain
Not restricting themselves just to
cities, migration caused problems in
areas which are not used to migration
Pushing up housing costs and
increasing crime rates

Brain Drain

Britain is currently facing the biggest brain

drain in 50 years

3.247 million British-born people living

abroad, 1.1 million are highly-skilled
graduates

Poland in an effort to reverse the brain

drain will not tax Polish workers who paid
there taxes abroad since 2002

Circular migration

A key dilemma facing EU governments is how to prevent

their migration policies triggering a so-called brain drain
from poor countries.
On the one hand, EU governments want skilled immigrants
to plug gaps in their local labor market. On the other hand,
a country that loses its best and brightest is less likely to
develop its economy, which might trigger future migration
flows of the unskilled and illegal kind.
One way of addressing both issues is to encourage more
circular migration.
This means helping migrants to move to-and-fro
between their homelands and foreign places of work.
In the end only Ireland, Sweden and the United Kingdom
opened up their labor markets to workers from the ten new
Member States.

Conclusion

EUROPEAN MIGRATION PACT

The interior ministers of Britain, France, Germany,

Italy, Poland and Spain meet every six months to
strengthen practical co-operation between the EUs
largest domestic security and immigration services

These countries want the EU to adopt a European

pact on migration in October 2008, during the
French presidency.

A European approach on migration, instead of 27

often contradictory immigration and asylum systems,
one common system

Sources

http://ec.europa.eu/employment_social/employment_analysis/employ_en.htm
Joint Employment Report 2007/2008
http://register.consilium.europa.eu/pdf/en/08/st07/st07169.en08.pdf
COMMUNICATION FROM THE COMMISSION TO THE SPRING EUROPEAN
COUNCIL. INTEGRATED GUIDELINES FOR GROWTH AND JOBS (2008-2010)
http://ec.europa.eu/growthandjobs/pdf/european-dimension-200712-annualprogress-report/200712-annual-report-integrated-guidelines_en.pdf
http://www.cer.org.uk/pdf/briefing_813.pdf
Freedom of Movement for Workers from Central and Eastern Europe: Experiences
in Ireland and Sweden. Report No. 5 May/2006 Publisher: Swedish Institute for
European Policy Studies http://www.europarl.europa.eu/sides/getDoc.do?
pubRef=-//EP//NONSGML+REPORT+A6-2006069+0+DOC+PDF+V0//EN&language=EN
http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0048en01.pdf
http://www.ecas.org/file_uploads/1182.pdf
Europe is caught mid-river in labour reforms, Tito Boeri, Financial Times,
01/16/2008
Europe must use its head to boost research, Bruno van Pottelsberghe, Financial
Times, 03/07/2008