The EU will have to recognise and deal with the considerable national differences in employment rates (Figure 1). Several countries have reached or exceeded 70%, such as Denmark, Sweden, the Netherlands and the UK. However, in Italy, Spain and Greece, the percentages are much lower. In 1999, the employment rate in Greece actually fell. To attain an aggregate employment rate of 70%, it will have to be these countries with the lower rates that will have to improve most, because the higher performing countries have less capacity to change.
One of the most critical factors in achieving the 70% employment rate is to increase the employment rate of women. This is one of the reasons that the US is more successful in terms of employment. The US employs more women in its workforce, especially in the service sector. Of those women who are able to work, in the US 67% are employed. This compares with an EU average of 52% (2000). The Lisbon target for female employment is 60% by 2010, with an additional target of 57% by 2005 (Figure 2). Some of the EU countries have already achieved this, particularly in the Scandinavian countries.
The figure is in the early 40 percentile for Greece, Spain and Italy. However, cultural factors are likely to continue to result in significant divergences in female employment rates between EU countries. It is something of a North-South divide. The countries nearer the south are more likely to have the female of the household staying at home with the family. But the Scandinavian experience shows how ‘family-friendly’ working practices (notably with regards to flexible working and childcare provision) can make a significant difference in this area. Another move forward was in Barcelona in 2002.
This was to provide childcare for 90% of all school age children and 33% of under 3’s by 2010. This would increase the amount of women in employment two ways. Firstly, the increase in childcare facilities would enable more women to go out to work, as there would be more provisions for them to take their children to. Secondly, childcare is a predominantly female sector of employment, thereby increasing the amount of women in the workplace. To achieve the 70% employment rate by 2010, it was agreed that the female employment rate should be set at 60% by 2010.
Another factor that would help push up the employment rate is increasing the employment rate of older workers. This is a little complex as a result of the widespread resort to early retirement in recent years and social preferences. In Austria, Belgium, France, Italy, Luxembourg and the Netherlands, employment rates for those aged 55- 64 are less than half the employment rates for people aged 25-55. 7 Almost two-thirds of Swedes aged 55-64 work. Over the last decade, the Netherlands has increased its employment rate for older workers, though it still remains under the target, at 38%.
The projected target for the employment rate of elderly workers by 2010 is 50%. What the EU proposed in Barcelona in 2002 was an increase of five years in the effective retirement age by 2010. Only 5 out of the 15 member states have met the target so far. This can be linked to the issue of pension reform. The elder workforce has an advantage in some jobs over the younger population. They are seen as more reliable as those younger than them. They are less likely to use the job as a stepping stone to a new career.
Due to the low number of under 25’s (40%) in employment in the EU, more and better opportunities should be provided to new entrants into the labour market. This does not include those that are in full time education. This applies to countries such as Germany and Spain, when a young person in full time education doesn’t leave school until they are over 25. However, new entrants are defined by their lack of labour market experience. Giving more work experience and training would help, as would a young person receiving more qualifications.
A person is more likely to be unemployed if they have no qualifications. But, the unemployment rate among younger people has improved over the past few years. Even though it has been a problem for most European countries, the unemployment rate of under 25’s has fallen by more than the full unemployment rate in recent years, except for Belgium and Denmark. 10 This solution could also be applied to those facing disadvantages in the labour market. As mentioned before, the reason that the US is more successful in dropping the unemployment rate is that they have more employment in the service sector.
In Europe, more people are in employment in agriculture and utility industries. As they are the big industries, more people are likely to be trained in them. If the EU is working towards more jobs in the service sector, it would be suffice to say that they would have to give the adequate training to those people. There is another type that would benefit those who are disadvantaged in the labour market. Many jobs now use computers as a normal part of their daily business, and there is a great amount of the European population who are still not familiar on how to use them.
There are already some training and qualifications in place that help with this, such as the ECDL, the European Computer Driving License. This gives those who take it an in depth use of how to use a computer in daily life. Therefore, in order to achieve a 70% employment rate by 2010, deregulating the European labour market and introducing greater labour market flexibility would help, but it wouldn’t achievable with only that. Higher economic growth is a factor, especially when compared to the US.
Those who are eligible for work, but for various reasons do not are also important to reach the 70%. As the figures show, there a vast number of people who could be in work, but are not. Perhaps the EU could look at countries within itself to draw on the experiences of the member states that exceed or are close to reaching the 70% target. But, perhaps ain order to reach the 70%, a rethink of the notion of standard working conditions is needed. Perhaps rather than the common, full time “9 to 5” job, more part time jobs and job shares are needed.