Juan Menéndez-Valdés, Director of the European Foundation for the Improvement of Living and Working Conditions (Eurofound), the Dublin-based EU Agency.
"Yesterday (2 October), the European Commission puts forward initiatives to strengthen the social dimension of the Economic and Monetary Union, aimed at reinforcing existing rules on economic governance to better anticipate and address employment and social policy challenges.
Growth – on which job creation and the improvement of living conditions of Europeans depend – does not only hinge on macroeconomic stability. Unemployment, inactivity, lack of skills, or poverty can also be a source of structural imbalances in Europe, impacting on growth and quality of life. The social dimension of any new economic governance in Europe should focus on redressing these imbalances – as important contribution to Europe’s competitiveness and as a prerequisite for reaching the declared goal of the European Union: the harmonisation and improvement of living and working conditions.
Eurofound’s research shows that there is no inherent trade-off between a fair and a competitive society. The Nordic countries, Austria, Germany all boast robust social models and they also sit on top of the 2012 global competitiveness ranking by the World Economic Forum. What they also have in common is that they have adapted their systems to the challenges Europe is facing: ageing societies, a shrinking working-age population, and structural change of the labour market.
Participation in the labour market is essential and can be promoted by policies that avoid disincentives and are able to attract and retain in employment a broad and diverse population. This requires attention to quality of work. In times of record unemployment, it can be argued that any job is better than no job at all. Yet the quality of work is directly linked to labour market participation rates.
In the face of a shrinking working age population, a work environment needs to be created to help workers retain their physical and mental health, their motivation and productivity throughout an extended working life. The work environment needs to satisfy the needs of different groups of workers: older workers but also women, those with care responsibilities or people with physical disabilities or mental health.
In other words: work needs to become sustainable and quality of work is a key element of this sustainability. The European Working Conditions Survey, carried out by Eurofound since 1990, monitors a number of elements relevant to the quality of work, including earnings, prospects, working time quality and intrinsic job quality.
The results are not encouraging; according to data from the 2010 survey, one in five jobs in Europe is a low-quality job. These jobs pay little, and are characterised by poor working conditions and limited prospects. There is an inherent risk of early exit from the labour force. Our research shows that workers who feel that work affects their health negatively are more likely to have the intention to leave early. Those who have difficulties reconciling work and private obligations and would like to work less are also more likely to want to leave as soon as possible. Early exit puts additional burden on social security systems and takes those whose skills and experience we badly need out of the labour force.
Low quality of work can also be behind limited job growth. Eurofound research on jobs in the home care sector shows that potential for job creation - based on high demand - is not fully exploited because low pay, inconvenient hours and the weak image of the sector fails to attract workers. This is troubling also because receiving care at home is the preferred option for most Europeans. Expectations about the quality of life at a later age are increasing with more people wanting to lead their lives actively, with dignity and independently in their community.
Meeting citizens’ expectations with regard to quality and accessibility of services in times of scarce public funds is a major challenge. It must be addressed, not only because quality of health and social services is clearly related to the subjective well-being of European citizens – as analysis of data from Eurofound’s European Quality of Life Survey shows. The survey also reveals that citizens’ satisfaction with the quality of public services is the most important determinant of their level of trust in government.
Compared to other parts of the world, Europe still has high levels of spending on public services and social policy in general. It is unlikely that more money will be allocated in the current economic circumstances. We have to do more and better with the limited resources available. The social investment approach entails substantial investment in education, from pre-school to university level and throughout working life to get the best long-term return.
Finding the right balance between addressing immediate needs and investing today for long-term returns is not an easy task – and the question how to do this guides Eurofound research. One thing, however, is clear: inaction is not an option. The example of the costs of NEETs, young people not in employment, education and training, which according to Eurofound calculations came to € 153 billion in 2011, is huge and immediate and unacceptable not only form an economic but also a societal point of view.
Behind the commitment to Social Europe lies the conviction that inclusive societies which guarantee decent living conditions for all will not only provide a higher quality of life but a better chance to succeed in a competitive, globalised world. Better life and better work can be part of our way to competitiveness."