Europe turns to active labour market policies to beef up job recovery

Commissioner for Employment, Nicolas Schmit called on member states to strengthen active labour market policies to make the recovery "a success" [EPA-EFE/FRANCOIS WALSCHAERTS]

The European Commission wants member states to adopt measures to support workers’ hiring and retraining in the aftermath of the pandemic, as the green and digital transitions will shake up a European job market already in pain because of COVID-19.

Europe is in the midst of a twin transition, officials repeat. National economies want to become ‘greener’ and more digital this decade. But there is a third and more complicated transition ongoing, as the bloc is trying to overcome the biggest recession in three generations and offset the job losses caused by the virus.

The massive response by the capitals, and backed by the EU’s SURE mechanism to support workers, helped to protect 32 million jobs in the Union, via short-time work schemes and temporary furloughs. 

But as the health crisis starts to recede in Europe and the economic response becomes more calibrated, the Commission wants member states to change the focus from protecting jobs to helping workers to complete the transition to the post-covid economy.

“We need to strengthen our active labour market policies”, the Commissioner for Employment, Nicholas Schmit, said on 3 June.

These type of policies will fit better with the transformation ongoing in many companies across Europe, pushed by the new sustainability priorities and a world of work transformed by automation and artificial intelligence.

Schmit said temporary subsidies for hiring workers, reskilling and upskilling and successful management of active labour market policies will be more essential than ever “to make the recovery a success”.

Before the crisis hit, the EU labour market had ended its sixth year of expansion, with more than 209 million people in employment and an unemployment rate of 6.5% in the fourth quarter of 2019.

One year later, employment had dropped by three million, and the unemployment rate rose to 7.3% in April. Between the fourth quarter of 2019 and the second quarter of 2020, the EU job rate registered the sharpest decline observed over two successive quarters. 

But optimism is not only back in the European outlook, national governments are also aiming for ambitious targets for this decade.

EU leaders to give strong backing to new social targets at Porto summit

The 27 heads of EU national governments will commit to “closely following” progress towards new jobs, skills and poverty reduction targets and will be open to adding new indicators to the GDP to measure national progress, according to the latest draft of the Porto social summit declaration seen by EURACTIV.

EU leaders agreed during the Porto summit in May to “closely follow, including at the highest level, the progress achieved towards the implementation of the European Pillar of Social Rights and the EU headline targets for 2030”, including at least 78% of people aged 20 to 64 being in employment by 2030.

The figure stood at 73.9% in 2019, before the pandemic hit.

The Commission’s Joint Employment Report 2021, adopted by the Council on 9 March, stressed that “active labour market policies are key to support labour market adjustments following the COVID- 19 shock”.

Against this backdrop, the EU executive noted that public employment services “will need to go beyond traditional ways of working” to deal with a surge in the number of job-seekers and support their reallocation across occupations or sectors. 

For that reason, the report recommended investing in public employment services and strengthening active labour market policy measures, for example by enhancing the monitoring and evaluation of measures already taken.

The report considered upskilling and reskilling a “top priority to foster an inclusive recovery and support the digital and great transition”.

However, as many as 20 member states missed the EU-wide adult learning target of 15% by 2020. 

For that reason, the Commission’s report called for enhancing reskilling and upskilling opportunities, especially for the young, including by reinforcing vocational and education training systems.

[Edited by Zoran Radosavljevic]

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