ILO Calls For Shift To Job-Centered Crisis Response In Europe

ILO News– The International Labour Organization (ILO) has called for an urgent shift to a job-centred strategy to tackle the deepening unemployment crisis that has left more than 26 million Europeans without a job.

While fiscal and competitiveness goals are important, it is crucial not to tackle them through austerity measures and structural reforms that do not address the root causes of the crisis,” says the ILO in a snapshot of the EU labor market ahead of its 9th European Regional Meeting that opens in Oslo on Monday, April 8, 2013. “Instead, moving to a job-centered strategy could serve both macroeconomic and employment goals.”

According to the ILO, the employment situation has continued to deteriorate since the introduction of fiscal consolidation policies.

A French unemployment queue. Photo: ILO/M

A French unemployment queue. Photo: ILO/M. Crozet

Following a pause in 2010-2011, unemployment has kept growing and shows no signs of improvement. During the past six months alone, one million people have lost their jobs in the EU.

Only five EU countries out of 27 (Austria, Germany, Hungary, Luxemburg and Malta) have witnessed employment rates above pre-crisis levels. Countries like Cyprus, Greece, Portugal and Spain have seen their employment rate drop by more than 3 percentage points in the last two years alone.

There are now more than 10 million more jobless people in Europe than at the start of the crisis. Young and low-skilled workers are the hardest hit.

Long-term unemployment is becoming a structural problem for many European countries. In 19 of them, more than 40% of the unemployed are now long-term unemployed, meaning that they have been out of a job for twelve months or longer.

The worsening employment situation also means that the risk of social unrest is now 12 percentage points higher than before the start of the crisis.

A Job-Centered Response To The European Financial Crisis

The ILO is calling for the adoption of a series of policies to tackle the jobs crisis.

First, addressing the structural issues that lie behind the crisis, notably in the financial sector, which were at the epicenter of the crisis but have not yet been resolved. The result is that small and medium-sized companies do not have adequate access to bank credit, which is crucial to produce and create jobs.

Second, confronting the downward pressures on wages and employment that are damaging productive investment and intra-EU trade. The successful experience of Sweden’s response to its financial crisis in the 1990s shows that such an approach is both effective and feasible.

Third, adopting emergency measures such as employment guarantee schemes for young people. These are programs designed to help young people get a job, education or training.

Fourth, using social dialogue between employers, workers and governments as a key tool for designing policies, gathering support for pro-employment reforms and ensuring that such reforms focus on what people really need.

The ILO’s 9th European Regional Meeting will bring together government, worker and employer representatives from 51 European and Central Asian member States to discuss the way forward for the region in the context of the continuing financial, economic and social crisis. The meeting will webcast at the website above.

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