Unemployed people are most costly in Belgium: Report
An unemployed person costs the Belgian government an average €33,443 per year compared to €18,008 in Britain, according to an analysis of six nations by the European Federation for Services to Individuals (EFSI).
Unemployment remains an important economic problem in the European Union, with the unemployment rate reaching above 20% in some countries.
To reduce unemployment, the European Commission has emphasised the need for member states to give priority to the provision of services to the individuals and households.
However, public interventions implemented in some EU countries to foster the development of personal services are considered too expensive. Such services include child care, long-term care for the elderly and disabled, house cleaning and home repairs.
In the report Why invest in employment? published yesterday (30 January), the EFSI has calculated the cost of an unemployed person related to the benefit of an active person in six EU member states.
Belgium (€33,443) takes first place, followed by France (€28 737), Germany (€25,550), Spain (€19,991), Sweden (€26,905) and Britain (€18,008).
The report reveals that the most important cost of unemployment is induced by the potential loss of revenue for governments.
Cost of unemployment unacceptably high
EFSI, which represents national federations and companies involved in the personal and household services, stresses that schemes supporting the sector could create 5.5 million jobs at a low-cost for public finance.
"Public measures supporting the personal and household services sector will undoubtedly contribute to move millions of undeclared workers from the shadow to the formal economy,” said Aurélie Decker, EFSI’s director.
“It is time for governments to recognise that the cost of an unemployed is higher than the potential loss of revenue induced by schemes supporting jobs creation in the sector," Decker added.
Whereas the average cost of an unemployed in Belgium is over €30,000 per year, the service vouchers scheme costs on average €3,500 per year per worker.
For instance, personal and household services enables women and family careers to better conciliate professional and personal life and allow them to return to the job market.
In addition, it contributes to the social inclusion of elderly and dependent people and also of people with low or no qualification that are usually on the fringes of the labour market.
Speaking about the report, Commissioner responsible for employment, social affairs and inclusion, László Andor, said measuring the real cost of unemployment is a key element in the EU's efforts to shape a policy response to the recession.
"Leaving aside the specificities identified by the report and all related methodological issues, the results show that the cost of unemployment remains unacceptably high throughout Europe and calls for urgent action by both policymakers and stakeholders," Andor said.
After five years of economic crisis and the return of a recession in 2012, unemployment is hitting peaks not seen for almost 20 years, according to a report by the European Commission published on 8 January, which showed growing disparity between North and South Europe.
The EU's statistical office, Eurostat, estimates that 26.1 million men and women in the 27 EU member states, of whom 18.8 million were in the euro area, were unemployed in November 2012.