Employment

Employment in Europe

Description of Employment

The Concise Encyclopedia of the European Union describes employment in the following terms: [1] The EU’s policy on employment goes little further than monitoring it, regulating some of its aspects and expressing concern that it is not in more plentiful supply. There are policies on vocational training, regional aid (through the structural funds) and hours of employment (through the Working Time Directive). In addition, the Social Chapter of the Maastricht Treaty committed the signatories to measures on workplace conditions, while the Treaty of Romeproclaims the objective of a ‘high level of employment’. The Commissionproduces White Papers on employment and the Council of Ministers calls summit meetings on the subject, where it ‘launches initiatives’ and agonises over the contrast between the success of the USA in creating 25 million new jobs since 1980 and the EU’s chronic unemployment, running at some 10% of the working population at the turn of the century. The culmination of much fruitless discussion was the formulation of an Employment Chapter in the 1997 Treaty of Amsterdam. This, however, amounted only to phrase-making, since there is within the EU no consensus on the appropriate policy response to the problem.

France essentially casts itself as the opponent of neo-liberalism, often advocating public-sector job-creation schemes and harmonisation of tax and social policy, so as to deny competitive advantage to less costly countries. At the other extreme, since Margaret Thatcher’s time the UK has advocated privatisation, deregulation, low taxes and flexible labour markets. Germanymistrusts the spending of taxpayers’ money on artificial employment but has long regarded statutory job protection and consensual employer-union relations as central to its social market economy. A ‘third way’, pursued by The Netherlands, has been successful in reducing nominal unemployment through voluntarily negotiated wage restraint, reduced hours and early retirement, albeit at the cost of falling real wages and disguised joblessness in the form of widespread disability and sickness leave.

The overall European verdict on employment strategies is less clear than it would have been in the 1980s and early 1990s. Then the ‘Rhine model’ appeared over the years to have outperformed the Anglo-Saxon model, at least as practised by the UK. But there is growing agreement that the problem of joblessness is of structural origin. Thus when Prime Minister Tony Blairannounced in 1997 that the UK would renounce its opt-out from the Social Chapter, he spoke from strength in calling for labour market reform throughout the EU, for the economy that he had inherited from the Conservatives was among the most effective in Europe, with unemployment (doubtless helped by cyclical factors) running at half the EU average.

Blair’s repeated subsequent appeals for a free market approach to improve competitiveness met with a cool response in the capitals of Europe (see more in this European encyclopedia). Beneath the surface, however, business has been more flexible than governments, and there is less rigidity in Continental employment practices than is often assumed. France regulates lay-offs, enforcing consultation with works councils, but although severance is expensive and slow the courts rarely block redundancies. To avoid anti-dismissal laws in Spain and Germany – and high social security costs in several countries – there has been a marked increase in part-time and short-term employment throughout the Eu (see more in this European encyclopedia). In 1998, for example, over one-third of all jobs in Spain were filled by temporary workers, and nearly two-fifths of employment in The Netherlands was part-time.

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Notas y References

  1. Based on the book “A Concise Encyclopedia of the European Union from Aachen to Zollverein”, by Rodney Leach (Profile Books; London)

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