Employment, Social Policy, Health and Consumer Affairs

Labour market inclusion

The international economic downturn has hit the EU Member States hard and has contributed to a weakening of the labour market. The number of people in employment is falling and unemployment is rising sharply. All Member States have been affected by the crisis, although to varying degrees. What is more, all Member States will need to address those challenges that issues such as an ageing population bring.

From experience of previous recessions, we are aware that many who lose their jobs during short term recessions risk finding themselves in a situation of permanent exclusion. A third of Europe’s population is outside the labour market. Labour market inclusion is one of the issues Sweden is prioritising most during the Swedish Presidency. The issue will be discussed at a number of EU meetings. To gain support for the policy message on labour market inclusion, Sweden will maintain a dialogue with the Commission and other Member States. 

Rising unemployment in the EU

As unemployment rises sharply in the EU, drastic measures must be taken to prevent an even greater proportion of the working population from becoming permanently excluded from the labour market, with serious consequences for both the individual and society for a long time to come. An active labour market policy is needed, in combination with an active social security policy, to increase people's opportunities to participate in the labour market. Measures to safeguard the individual’s employability and to facilitate movement on the labour market should be prioritised. Those individuals who can and who want to work must be offered better opportunities to participate in working life. On the other hand, investment to protect individual companies from structural changes should be avoided.

In a recession, the countries’ labour market policies and social security systems are put to the test. The labour market and social security policies must therefore be more active, with a focus on early and active measures to support continued participation or a return to working life, and to prevent long term exclusion. To achieve this, it is extremely important that the focus is on the individual and that all the major players are given better opportunities to work together for higher labour market participation.

To counter the negative effects of the financial crisis and address the underlying long term challenges, investment is needed in structural reforms with relevant measures that can create jobs and encourage a flexible and inclusive labour market. Therefore, the measures that are taken to limit the short term negative effects of the financial crisis must also take into consideration the challenges that we face in the long term. Intensive structural reforms are necessary in order to deal with the effects of an ageing population by enabling more people to find work.

Competitiveness and flexibility

The growing globalisation is dependent upon countries maintaining their competitiveness and improving the flexibility of the labour market. The thresholds to the labour market must be lowered. All persons of working age must be given the same opportunities to develop their professional skills and must be given the motivation either to start working, to continue working, or to return to working life. For those outside the labour market, further investments are required to improve their chances of finding work. A modern and flexible education system, well adapted to the demands of the labour market, must be able to better prepare young people in an increasingly competitive work environment. 

Labour market analysts have often focused on the situation of specific groups: the older segment of the workforce, young people, immigrants, single parents and so on. A greater understanding of how labour market policies and social insurance policies interact is essential; the Member States must exchange experiences and identify ‘best practice’.

One hundred million EU citizens outside the labour market

Over a hundred million EU citizens find themselves outside the labour market. Full employment and reduced exclusion through continued structural reforms must once more become the focus of the work conducted within the framework of the Lisbon Strategy and the growth and jobs strategy.

The Swedish Presidency will conduct a broad discussion about how we can prevent those who now become unemployed from becoming permanently excluded, about ways of getting back into work for those who, even before the crisis, were excluded and about different methods of promoting a higher level of labour market participation in the Member States. The discussion will contribute to the work on the new strategy for growth and jobs that will replace the Lisbon Strategy.
 

Fact sheet: Promote labour market inclusion