Division 1 Attract and retain more people in employment, increase labour supply and modernise social protection systems

Raising employment levels is the most effective means of generating economic growth and promoting socially inclusive economies whilst ensuring a safety net for those unable to work. Promoting labour supply, a lifecycle approach to work and modernising social protection systems to ensure their adequacy, financial sustainability and responsiveness to changing needs in society are all the more necessary because of the expected decline in the working-age population. Special attention should be paid to substantially reducing the persistent employment gaps between women and men, and the gender pay gap. Further increasing the employment rates of older workers and young people, as part of a new intergenerational approach, and promoting active inclusion of those most excluded from the labour market is also important. Intensified action is also required to improve the situation of young people in the labour market, especially for the low skilled, and to significantly reduce youth unemployment, which is on average double the overall unemployment rate.

The right conditions must be put in place to facilitate progress in employment, whether it is first-time entry, a move back to employment after a break or the wish to prolong working lives. The quality of jobs, including pay and benefits, working conditions, access to lifelong learning and career prospects, are crucial, as are support and incentives stemming from social protection systems. To enhance a lifecycle approach to work and to promote reconciliation between work and family life, policies regarding childcare provision are necessary. Securing coverage of at least 90 % of children between 3 years old and the mandatory school age and at least 33 % of children under 3 years of age by 2010 is a useful benchmark at national level, but specific efforts are also needed to tackle regional disparities within countries. The increase in the average employment rate of parents, especially single parents, who are usually exposed to higher poverty risk, requires measures to support families. In particular, Member States should take account of the special needs of single parents and families with many children. Furthermore, by 2010 the effective average exit age from the labour market at EU level should increase by 5 years compared to 2001.

Member States should also enact measures for improved (occupational) health status with the goal of reducing sickness burdens, increasing labour productivity and prolonging working life. The implementation of the European Youth Pact, the Pact for Gender Equality; and the European Alliance for Families should also be a contribution to a lifecycle approach to work, in particular by facilitating the transition from education to the labour market. Young people with fewer opportunities should be given equal chances for social and professional integration through individually tailored measures.

Guideline 18. Promote a lifecycle approach to work through:

• a renewed endeavour to build employment pathways for young people and reduce youth unemployment, as called for in the European Youth Pact,

• resolute action to increase female participation and reduce gender gaps in employment, unemployment and pay,

• better reconciliation of work and private life and the provision of accessible and affordable childcare facilities and care for other dependants,

• support for active ageing, including appropriate working conditions, improved (occupational) health status and adequate incentives to work and discouragement of early retirement,

• modern social protection systems, including pensions and healthcare, ensuring their social adequacy, financial sustainability and responsiveness to changing needs, so as to support participation and better retention in employment and longer working lives.

See also integrated guideline ‘To safeguard economic and fiscal sustainability as a basis for increased employment’ (No 2).

Active inclusion policies can increase labour supply and strengthen society’s cohesiveness and are a powerful means of promoting the social and labour market integration of the most disadvantaged.

Every unemployed person should be offered a job, apprenticeship, additional training or other employability measure; in the case of young persons who have left school within no more than 4 months by 2010 and in the case of adults within no more than 12 months. Policies aiming at offering active labour market measures to the long-term unemployed should be pursued, taking into consideration the participation rate benchmark of 25 % in 2010. Activation should be in the form of training, retraining, work practice, a job or other employability measure, combined where appropriate with on-going job search assistance. Facilitating access to employment for job seekers, preventing unemployment and ensuring that those who become unemployed remain closely connected to the labour market and employable are essential to increase participation, and combat social exclusion. Attaining these objectives requires removing barriers to the labour market by assisting with effective job-searching, facilitating access to training and other active labour market measures. Ensuring affordable access to basic social services, adequate levels of minimum resources to all, combined with the principle of fair remuneration in order to make work pay are equally important. This approach should, at the same time, ensure that work pays for all workers, as well as remove unemployment, poverty and inactivity traps.

Special attention should be paid to promoting the inclusion of disadvantaged people, including low-skilled workers, in the labour market, inter alia, through the expansion of social services and the social economy, as well as the development of new sources of jobs in response to collective needs. Combating discrimination, promoting access to employment for disabled people and integrating immigrants and minorities are particularly essential.

Guideline 19. Ensure inclusive labour markets, enhance work attractiveness, and make work pay for job-seekers, including disadvantaged people, and the inactive through:

• active and preventive labour market measures including early identification of needs, job search assistance, guidance and training as part of personalised action plans, provision of necessary social services to support the inclusion of those furthest away from the labour market and contribute to the eradication of poverty,

• continual review of the incentives and disincentives resulting from the tax and benefit systems, including the management and conditionality of benefits and a significant reduction of high marginal effective tax rates, notably for those with low incomes, whilst ensuring adequate levels of social protection,

• development of new sources of jobs in services for individuals and businesses, notably at local level.

To allow more people to find better employment, it is also necessary to strengthen the labour market infrastructure at national and EU level, including through the EURES network, so as to better anticipate and resolve possible mismatches. Better transitions between jobs and into employment are essential and policies to enhance mobility and matching on the labour market should be promoted. Job-seekers throughout the EU should be able to consult all job vacancies advertised through Member States’ employment services. Mobility of workers within the EU should be fully ensured within the context of the Treaties. Full consideration must also be given on the national labour markets to the additional labour supply resulting from immigration of third-country nationals.

Guideline 20. Improve matching of labour market needs through:

• the modernisation and strengthening of labour market institutions, notably employment services, also with a view to ensuring greater transparency of employment and training opportunities at national and European level,

• removing obstacles to mobility for workers across Europe within the framework of the Treaties,

• better anticipation of skill needs, labour market shortages and bottlenecks,

• appropriate management of economic migration,