Europe urged to adapt workforce to ageing

Migration will not provide a long-term solution to Europe’s ageing crisis. Instead, policymakers must focus on getting people to have more babies while working ‘longer and better’, business leaders declared at the European Business Summit.

The challenge is to rejuvenate Europe’s population, increase the number of workers and keep them working longer, said an all-male panel of policymakers, business leaders and trade union representatives, at a conference on ‘(Baby) booming Europe’s workforce’, at the European Business Summit on 15-16 March 2007. 

The majority of participants at the event, moderated by EURACTIV Publisher Christophe Leclercq, agreed that policymakers can have an impact on demographic evolution.

Speakers agreed that if they are to meet the challenge, they will have to ensure decent working conditions, make it easier to combine work and family life, and support lifelong learning schemes. Reforms to countries’ social-protection systems will also be needed in order to guarantee sustainable public finances. 

Immigration also remains an option, although Employment and Social Affairs Commissioner Vladimir Špidla pointed out that “immigration is neither a panacea, nor the principal solution to our problems”.

Employment and Social Affairs Commissioner Vladimir Špidla pointed out that Europe is, in a way, "lucky" to be confronted to the demographic challenge of ageing, as the elimination of all forms of discrimination - necessary to increase the overall activity rate - will ultimately lead to a society that is "more inclusive". Unfortunately, he said, age discrimination is still very present in Europe. 

On the question of immigration, the Commissioner said: "The question is not that of having a false choice between a Europe with or without migration; it is that of having a real choice between a Europe with a well or badly managed immigration." 

He underlined the fact that one should not confuse free movement of labour within the EU and immigration from third countries. "Free movement is a right," he stressed, adding that "no catastrophe has occurred on the labour market since the new members joined the EU". Indeed, he said, countries that have opened up to workers from Central and Eastern Europe have been growing faster than their counterparts and have seen their unemployment levels fall, in some cases significantly. "Work generates more work," he said. 

BusinessEurope Secretary-General Philippe De Buck said he thinks that the most important effect of demographic evolution will be on the society. "The older a society is, the less risk-taking it will be." This will impact negatively on Europe’s capacity to innovate and remain competitive, he said. 

He said that the reduction in workforce needs to be countered by a raise in productivity. "We need to rejuvenate the labour market. But for this, we have to attract more people to work in Europe and solve the current brain drain problem," he said, stressing that Europe must start offering the same sort of career opportunities as in the US. 

He also felt that people need to contribute more to the workplace than they have done in the past. The real problem is to change people’s mentalities – and in particular those of the trade unions – in order to get them to work longer than the pre-retirement age. 

This, he said, is also a question for companies, which need to stop trying to get rid of their older staff. On the other hand, he pointed out, this also means that people must remain "employable", and requires investment in lifelong learning schemes. 

Finally, he added that Europe would have to "completely review" its pension system and place more emphasis on personal financing. 

Reiner Hoffman, deputy secretary-general of the European Trade Union Confederation (ETUC) however stressed that social protection must be seen as an investment, not a cost to society. 

He noted that equal pay is still an issue in the EU, even after 50 years and that acting on this could help to increase the participation of women in the labour market. He added that there was clearly room for action at European level - pointing to legislation that has already resulted from agreements between European Social Partners, including Directives on part-time work and parental leave. He said that social partners should continue to conclude such framework agreements in order to disseminate common principles across the bloc.

He also insisted that Europe needs a pro-active migration policy where immigration is "managed", not prevented. But he stressed that leaders had to ensure that all workers are receiving equal treatment and are not competing in areas such as working hours and pay. This goes both for intra-EU movements and immigration from third countries, he said. 

Dieter Scheiff, CEO of the recruitment agency Adecco, said: "Ageing will impact on business dramatically…It’s like having high blood pressure: You don't feel it but it can kill you." However, he noted that only 6% of companies are preparing themselves for demographic change. 

In his view, bringing in more people can only be a temporary solution. "We need to make more of the resources we have," he said. 

He believes that one way of increasing productivity is through temping. When people stay 20 years in the same job, they become "bored and cynical", he said, whereas with temping, they are often much more motivated. 

Soon, more than half of the European population will be over 40. Already 22% of the population is older than 60 and this is expected to rise to 36% in 2050, as life expectancy increases and birth rates remain low, at around 1.5 children per woman. 

This demographic evolution is increasingly weighing down on Europe's economy as the costs of pensions and healthcare swell and the workforce dwindles. 

In October 2006, the Commission outlined a new strategy, entitled 'The demographic challenge - a chance for Europe', to tackle this challenge (EURACTIV 12/10/06)

  • 9 March 2007: EU heads of state and government announced the establishment of an Alliance for Families Platform for the exchange of good practice on family-friendly policies.
  • May 2007: The Commission will present a Communication on families, which will provide more details on the work of the Alliance for Families.
  • 2008: Commissioner Spidla has announced that he will present a Communication on childcare, with concrete proposals on availability, quality and affordability.

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