Short-time work schemes are effective, employment review shows

The green transition has to be accompanied by social measures

Photo: EU Nicolas Schmit.

All Member States are experiencing a greater economic shock than in 2008-2009, economic output has contracted sharply and unemployment is on the rise, shows the 2020 edition of the Employment and Social Developments in Europe review, released by the Commission's DG EMPL on Tuesday.

It also highlights that the most vulnerable persons, including Europe's youth, are hit particularly hard. The review provides evidence-based analysis on how to achieve greater fairness across the EU in the face of crises such as the Covid-19 pandemic as well as structural changes due to demographic ageing, and the green and digital transitions. It puts together up-to-date economic analysis of employment and social trends in Europe and discusses related policy options.

This report shows that strengthening social fairness is key to overcoming the crisis and requires putting people front and centre, Nicolas Schmit, EU Commissioner for Jobs and Social Rights commented. To ensure resilience, solidarity and cohesion, the EU's response has to prioritise employment, reduce inequalities and ensure equal opportunities, he said adding that “the effective implementation of the European Pillar of Social Rights will serve as our guide.”

The review notes that the pandemic is having profound health, economic, employment and social effects, threatening much of the progress that the EU had achieved previously.

Adequate minimum wages and minimum income can have a beneficial effect on the social mobility of Europeans is one of the finding of the review. It suggests that strengthening social fairness, including through investments in people, pays off. Closing gender-related gaps brings particularly high returns, while extending working lives, and raising educational attainment also have positive effects, the review says.

Other finding suggests that structural change, such as the green transition, has to be accompanied by social measures to be successful. This shift requires social investment in the form of re-skilling programmes and unemployment benefits. According to ESDE, this social investment could amount to €20bn or more until 2030.

Short-time work schemes are protecting jobs effectively. The EU is helping Member States to provide such support through solidarity mechanisms like the instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE).

Social dialogue and collective bargaining influence fairness and its perception at the workplace by promoting more equitable wages, better working conditions and more inclusive labour markets, the report points.

The review also defines that more generally, to repair the damage done by Covid-19 and prepare an economy and society for a future of faster structural changes, the EU and Member States need to embrace fully the opportunities offered by the transition to a greener, digitalised economy and build inclusiveness, solidarity and resilience into the design of all policies.

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