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EUROPEAN COMMISSION
PRESS RELEASE
Brussels, 21 January 2014
Employment and Social Developments: Annual Review
highlights need to address risks of in-work poverty
A significant increase in poverty among the working age population is one of the most
tangible social consequences of the economic crisis. A gradual reduction of unemployment
levels may not be enough to reverse this situation if wage polarisation continues, notably
due to a rise in part-time work. This is one of the main findings of the 2013 Employment
and Social Developments in Europe Review, which also looks into the positive impact
of social benefits on the likelihood of getting back into employment, the consequences of
persistent gender imbalances, and the social dimension of the Economic and Monetary
Union.
The review shows how taking up a job can help people to get out of poverty, but only in
half of the cases: much depends on the type of job found, but also on the household
composition and labour market situation of the partner.
"We need to pay attention not only to job creation, but also to the quality of jobs, in order
to achieve a sustainable recovery that will not only reduce unemployment but also
poverty", Commissioner for Employment, Social Affairs and Inclusion, László Andor,
stressed.
Positive impact of unemployment and social benefits
The Review also features an analysis showing that, contrary to commonly held beliefs,
people receiving unemployment benefits are more like to get a job than people not
receiving benefits (other things being equal). This especially applies to well-designed
benefit systems (like those reducing benefit levels over time), accompanied by appropriate
conditions, such as requirements to look for a job. Such systems tend to support better
skills matching and therefore the take up of higher quality jobs, which in turn help people
to get out of poverty.
The review also highlights that in some countries (e.g. Poland, Bulgaria), significant shares
of unemployed are not covered by standard safety nets (unemployment benefits, social
assistance), and tend to rely on family solidarity or informal work. Unemployed people not
receiving unemployment benefits are less likely to find a job because they are less likely to
be the subject of activation measures and are not obliged to look for a job in order to
receive benefits.
IP/14/43
Persistent gender differences
Although the crisis saw a contraction of some gender gaps historically faced by women
(largely the result of male-dominated sectors most hit by the crisis), gender differences
still persist in labour market participation, pay and the risk of poverty. Moreover, women
still tend to work fewer total hours than men and, while this can reflect individual
preferences, it still leads to diminished career opportunities, lower pay and lower
prospective pensions, underutilisation of human capital and thus lower economic growth
and prosperity. Gender gaps therefore give rise to both economic and social costs and
should be effectively tackled whenever they result from societal or institutional barriers or
constraints.
Some distinct patterns can be found among Member States with regard to the gender gap
in terms of hours worked: in some cases a high share of women are working but with
relatively shorter hours (for example in the Netherlands, Germany, Austria and the UK), in
others, female participation is lower, but once in employment, women tend to work
relatively longer hours (in many Central and Eastern European countries, Spain, Ireland).
Only some Member States (mainly the Nordic and Baltic countries) succeed in combining
high female employment rates with a low gender gap in hours worked. An effective policy
mix appears to include gender-equal working time, widely available flexible work,
incentives for the division of unpaid work within a couple, and employment-friendly,
accessible and affordable childcare with longer day-care hours.
Social dimension of the EMU
The still growing macroeconomic, employment and social divergences threaten the core
objectives of the EU as set out in the Treaties, namely to benefit all its members by
promoting economic convergence and to improve the lives of citizens in the Member
States. The latest review shows how the seeds of the current divergence were already
sown in the early years of the euro, as unbalanced growth in some Member States, based
on accumulating debt fuelled by low interest rates and strong capital inflows, was often
associated with disappointing productivity developments and competitiveness issues.
In the absence of the currency devaluation option, euro area countries attempting to
regain cost competitiveness have to rely on internal devaluation (wage and price
containment). This policy, however, has its limitations and downsides not least in terms of
increased unemployment and social hardship, and its effectiveness depends on many
factors such as the openness of the economy, the strength of external demand, and the
presence of policies and investments enhancing non-cost competitiveness.
Enhanced surveillance of employment and social developments was proposed by the
Commission in its October 2013 Communication on the Social Dimension of EMU (see
IP/13/893). In the long term and after Treaty changes, an EMU-wide fiscal capacity with a
shock absorption function could complement existing policy coordination instruments.
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For more information
News item on DG Employment website
Employment and social analysis
László Andor's website
Follow László Andor on Twitter
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affairs and inclusion: http://ec.europa.eu/social/e-newsletter
Contacts :
Jonathan Todd (+32 2 299 41 07)
Cécile Dubois (+32 2 295 18 83)
For the public: Europe Direct by phone 00 800 6 7 8 9 10 11 or by e-mail
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