ESN’s Policy Director Alfonso Lara Montero participated in the 2013 Employment and Social Developments Review organised by the European Commission’s DG Employment in Brussels on the 18 February. The aim of this meeting was to discuss the findings of the third annual review on Employment and Social Developments in Europe with representatives from the Commission, national governments and academics.
Employment and social aspects in the EMU
Guy Lejeyne and Olivier Bontout from DG Employment explained that there have been different trends during the past years. The average social expenditure per beneficiary increased in 2009, though it decreased in 2011. Benefits-in-kind, such as health and childcare, decreased in 2011, but benefits in cash increased. In 2012 there was an overall decrease in social protection expenditure though GDP continued to go down as well. How did this translate into people’s incomes? “Since 2008, real incomes have been declining because of a reduction in labour incomes; the situation got worse in 2012 since social expenditure decreased too”, argued Mr. Lejeyne.
The gender impact
Anna Marosi from DG Employment presented how the crisis may have affected the gender balance across the EU. She acknowledged that “gender gaps have narrowed but mainly because of changes affecting men which include: loss of jobs in male dominated sectors (construction); lack of temporary jobs for young men; more men accepting part time jobs.”
Gender equal working regimes, part time positions, flexible working arrangements, and friendly child care have an influence in closing the gender employment gap. The debate focused on the availability of quality childcare programmes and extending other public policy incentives, such as parental leave.
The effectiveness and efficiency of social transfers
There are strong variations across Member States in terms of pensions, family, unemployment, social exclusion and housing expenditure, but is Member States’ relative performance in line with their relative expenditure levels? Do high or low spenders perform better or worse?
Terezie Lokajickova from DG Employment compared pensions expenditure across various European countries. For instance, Germany and Ireland spend less than the average, whilst Malta, Cyprus and The Netherlands are the highest spenders. “Looking at family expenditure, Denmark, Sweden and France have a similar level of expenditure but their outcomes in terms of relative income, employment rates and child care vary considerably”, explained Ms Lokajickova.
Inclusive indicators beyond GDP
As emphasised in ESN’s previous work on Investing in Children, GDP alone is a poor proxy of social progress and quality of life. It is essential to ensure that economic growth is inclusive and that it captures the situation of households and individuals. Therefore, it is necessary to look at GDP, but also at distribution of growth. Real growth in median disposable income and GDP can differ substantially, thus distribution can have important results on outcomes.
The speakers at the conference pointed out the need for inclusive indicators: Bartek Lessaer from DG Employment recognised that “rising inequality can undermine the sustainability of growth and make it shorter, lead to insufficient demand and unsustainable borrowing, perverse incentives to take up loans – indebtedness; damage social trust and civic involvement.” Andrea Brandolini from the Bank of Italy suggested a new indicator – a national average deflator of household consumption, mentioning that: “Though the emphasis should be placed on real median income, measuring this across the 28 countries in the EU would not be an easy exercise”. Erik Schokkaert from the Louvain University in Belgium argued that it is important to measure wellbeing, for which it is necessary to move beyond the household to the individual and look at gender inequality and child poverty.
Conclusion
Closing the meeting, DG Employment Director General Michael Servoz argued that “the EU is not seen any more as a convergence mechanism as it used to be”, whilst Martine Durand from the OECD spoke of the “need to look at the social impact of economic policies and put in place a sustainable growth agenda.” Speakers emphasised the need to move beyond GDP and include further indicators of quality of life and wealth inequalities, with an emphasis on health, access, and quality of services.
Resources:
Employment and Social Developments in Europe 2013 – highlights and full report
ESN’s analysis of the European Recommendation Investing in Children