Joint Employment Report 2015: Unemployment slowly decreasing, but poverty on the rise

The European Commission has released its Joint Employment Report (JER) alongside the 2015 Annual Growth Survey. The JER includes key indicators on the social performance of member states and is part of the European Semester exercise. Unemployment remains at high levels with 24.6 million unemployed in the EU. The employment rate of older workers is increasing, but half of older workers do not work. Poverty continues to increase in many countries, on top of already high levels of poverty.

Commission’s vision of labour market policies: invest in skills, pension reforms and gender equality

The JER first sets out the types of policies that the Commission sees favourably for fostering employment. It positively singles out several member states who have introduced measures to increase adult learning and improving worker’s skills, job activation measures, simplified labour law. Pension reforms that aim to raise pensionable ages and to equalise the pension ages of men and women are also seen positively.

Unemployment: older unemployed still take more time to find work

The Commission notes that unemployment is slowly decreasing, while remaining at high levels. Between 2008 and 2013, unemployment increased from 7.0% to 10.8%. 2014 brought a slight decline to 10.1% in September 2014. The Commission notes that while employment of older workers is slightly increasing, older workers have much more difficulties to regain employment once they are unemployed. However, long-term unemployment is increasing from 3.9% in 2010 to 5.1% in 2013.

Gender differences: total earnings gap of women 37%, gender pension gap 39%

Women and older workers are increasingly active on the labour market, but activity level of men and women still differ by 11%. Women’s employment rate lies well below that of men and the gap in full-time employment is of 18.3% and the pay gap per hour 16%. The total earnings gap for women is 37%, while the gap for retired women I 39%. Women above 55% are also overrepresented in the number of people at risk of poverty.

Reforms to benefit women would be, according to the Commission paper, to increase affordable and quality childcare and long-term care services, as well as flexible working arrangements and adequate leave policies. While some member states increase the availability of childcare facilities, little measures have been taken to reduce the gender pay gap.

Pension reforms: still focus on raising retirement ages

The Commission commends the efforts of member states to raise retirement ages, going alongside an equalisation of retirement ages for men and women. Also, measures to take into account times raising children in pension entitlements are seen positively. The Commission also lists all states who have introduced explicit links between pensionable ages and life expectancy. Restricting access to early retirement is seen by the Commission as steps to improve adequacy and sustainability of pensions. Member states where early retirement has been (re)introduced for certain categories of workers are singled out by the Commission. The Commission also sees positively efforts in several member States to allow the combination of retirement income and work in old age.

Health care: from ‘cost effectiveness’ to ‘value for money’

The Commission exposes that while in the Netherlands, some responsibilities of the health care system are transferred to the local level and health insurance companies, many member states have a complete lack of formal long term care services. The Commission reframes its demands for reform by emphasising reforms should bring ‘value for money’.

Poverty increasing

The Joint Employment Report also notes that the at-risk of poverty rates in many member states are quite high and increasing, as a result of negative or stagnating GDP growth, rising long-term unemployment and the weakening of social transfers

For more information, please contact Philippe Seidel from the AGE Secretariat:

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