Remarks by Commissioner Schmit at the press conference on the European Semester Autumn package

(Source: European Commission)

This year’s Joint Employment Report addresses the social and employment situations across the EU, focusing in particular on how Member States are implementing the European Pillar of Social Rights and using the revised Social Scoreboard.

The report reflects the outcomes of the Porto social summit, and notably the new 2030 EU headline targets on employment, skills and poverty reduction, which EU leaders confirmed at the European Council in June.

I will pick out a few of the main observations: The labour market impact of the COVID-19 crisis has been well-cushioned by the swift and decisive policy action at Member State and EU level. Here short-time work schemes have played an important role.

In the second quarter of this year, the employment rate for those aged 20-64 stood at 72.8%. There has been a 13% increase in hours worked per worker in the second quarter of this year compared to the fourth quarter of 2020, so an improvement, but this is still 2.7% lower than before the pandemic.

As the economy recovers from the COVID-19 shock, which unfortunately is not over, not all jobs are likely to be reinstated. For some of the impacted companies, the pandemic will have represented only a temporary shock, while for others, it may lead to profound changes in business models.

Active labour market policies, including skilling and where needed hiring incentives, need to be at the centre of our work to smoothen out the negative impacts of the pandemic, and to prepare us for the ongoing digital and green transitions. This follows the approach in the Commission’s ‘EASE’ recommendation from March this year: Effective Active Support to Employment.

Along with more investment in skills, it is also imperative to look at working conditions. We are helping people move to new, future-proof jobs but we also need to ensure the quality of these new types of jobs.

Adult learning remains far from standard practice throughout the EU. Just 9.2% of adults participated in learning over the previous 4 weeks in the EU in 2020, among which only 3.4% of low qualified adults. So, we are far from the 60 % target for adult learning set in the Pillar of Social Rights Action Plan.

Before the end of the year, we will propose two new initiatives under the Skills Agenda which will help us to meet the EU-wide target of getting 60% of adults in annual training, that we set in the Pillar of Social Rights Action Plan. These are Individual Learning Accounts and Micro-credentials.

Another message from the report is that, as we know, the COVID-19 crisis affected young people strongly, in particular job starters.

The youth unemployment rate in the EU showed initial signs of recovery by mid-2021 but still stood at 17.4% in the second quarter of 2021, which is nearly three times the level of unemployment rate of the population aged 25-74.

We have 9 million NEETs – that is young people not in education, employment or training – all over the EU. This is a tragedy. We have to support these young people.

Not only because it is the morally right thing to do, but also because we need the next generation’s innovation and productivity to keep our economy competitive. So we must be very active in getting young people the tools and experience they need to get onto the labour market and have access to stable jobs.

That’s why we created the Youth Guarantee and that is why Member States need to implement the Youth Guarantee to help young people. And we are launching a programme called ALMA which focuses on getting disadvantaged young people the skills and experiences they need to enter the job market through a work experience abroad and intensive training back home.

This brings me to another issue. The EU is also experiencing labour shortages despite the fact that unemployment is still quite high in Member States. Sectors such as construction, health, long-term care, and ICT reported the biggest labour shortages, fuelled by long-lasting skills shortages, among other causes. As a result of the green and digital transitions, increased labour demand can be expected in sectors related to renewable energy, construction, agriculture and forestry. If we want to have sustainable and durable growth, we need to focus on investing in people and in skills.

The share of people at risk of poverty or social exclusion was stable at around one in five persons in 2020 in the EU.

Of course, this number is far too high. In our Pillar of Social Rights Action Plan, we have set a target to reduce people at risk of poverty or social exclusion by at least 15 million by 2030, of which 5 million will be children. It is also an issue of bringing people who are long-term unemployed back to the labour market and also to implement the Child Guarantee to achieve the target on reducing child poverty.

Finally, social protection systems helped weather the COVID-19 crisis. Nevertheless, social protection gaps remain in many countries, in particular for non-standard workers and the self-employed.

Social partners have played a key role in the recovery strategy from the COVID-19 crisis. More than half of all measures in the areas of business continuity, employment protection and so on were agreed by or negotiated with social partners.

So to conclude, what the Joint Employment Report confirms is that the situation is not as bad as it could have been without the quick and bold reaction of the EU and Member States, but it is essential that Member States implement active labour market policies straight away.

The measures in the national recovery and resilience plans will go a long way to addressing some of the socio-economic issues highlighted in the Report, so I think we have cause for some optimism.

The proposal for a Joint Employment Report will now be discussed by the EPSCO Council’s advisory committees with a view to final adoption by EPSCO in March 2022.

And going forward, when reflecting on the future of the European Semester, these EPSCO advisory committees will also begin to consider a proposal made by two Member States for a Social Imbalances Procedure as we know that the pandemic has amplified social divergences and economic divergences and we need to tackle these in the context of the European Semester.

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