The inclusive labour market and career patterns: achieving the Lisbon targets?

20 November 2006

Joakim Palme, Director, Institute for Future Studies, Stockholm, described the findings of their recent report: Sustainable policies in an ageing Europe: modernising family polices. This analysed social trends in Europe: an ageing society, declining marriage, fertility and birth rates, and an increased female labour force.

Mr Palme said that if the European social model was to be sustainable, policy-makers needed to make wide-ranging reforms to current social protection systems and fine-tune the relationship between encouraging higher birth rates, improving Europe’s skills base and increasing the labour supply to enlarge the future tax base.

Education plays an important role, as building up Europe’s “human capital” (i.e. a highly-skilled work force) will increase GDP per capita growth, providing revenue to care for an ageing population.

However, the study also found that, in some Member States, prolonging education reduced fertility levels as women delayed having children to continue their studies and some then decided not to have children at all because of the negative impact this would have on their employment opportunities.

In Scandinavian countries, where policies support working mothers, both the level of women at work and female fertility have increased, and family poverty has decreased. In countries which provide less support, such as Italy or Spain, fertility levels are falling and family poverty increasing.

Mr Palme said this demonstrated that family policies must support female workers, encourage mothers and fathers to share the burden of having children, and improve the work-life balance.

Despite the growth of ‘dual-earner’ families in Europe, and the obvious benefits of having more women in work, sharp variations remain in the support national governments give to working mothers. Mr Palme said it was important to design the European social model so that social benefits provided adequate coverage for all citizens, and social security programmes boosted the number of taxpayers. To quote European Commission President Jose Manuel Barroso, “the European social model is about social inclusion and equality of opportunity”.

Reinventing retirement: opportunities and challenges of an ageing workforce

Roger Liddle, Principal Economic Adviser, Bureau of European Policy Advisers, European Commission, said the Commission’s research had also found an increase in fertility levels in those EU Member States which provided childcare, encouraged financially viable part-time work, and supported a more equitable work-life balance.

As well as providing for pensions and sustainable health systems, societies where the population is ageing can only build a sustainable future by extending the tax base, raising skill levels and increasing productivity. Sadly the EU as a whole is a “long way short of its education potential”, said Mr Liddle.

He agreed that poverty in Europe was the result of low levels of employment among women, so social policies should push for gender equality and support dual-earner families. He also noted that in an ageing society, women are likely to have to shoulder the burden of caring for their elderly parents as well as for their children, so will need additional support.

David Coats, Associate Director, Policy, the Work Foundation, UK, stressed the importance of investing in human capital and supporting dual-earner families in order to reduce “child and gender poverty”.

Mr Coats cautioned against assuming that fertility levels would continue to decline, since these had always swung “from boom to bust”. Immigration could partially compensate for a declining workforce, provided good social inclusion measures were put in place and migrant communities maintained their high birth rates.

While on the need to develop human capital, Mr Coats said the UK experience showed that increasing the skills base through tertiary education did not automatically improve productivity or performance. It also required employers to update their business models, and adapt to changing skill levels and career patterns.

Dr Ulrich Schoof, Project Manager, Bertelsmann Foundation, emphasised that to solve the problems of an ageing society, a balance must be struck in the entire range of family and gender policies, encouraging education and lifelong learning, and health policies.

Dr Schoof noted that fertility rates had decreased over time, and felt that while this decline could be slowed down, society should welcome the opportunities provided by people staying healthier for longer since this both improved the labour market and enabled them to participate more fully in society.

Adapting to a changing world

Dr Richard Straub, Adviser to the Chairman of IBM Europe, Middle East and Africa and Director of Development, European Foundation of Management Development, noted that technology had triggered a “secular change in society and the economy”, resulting in the ‘flat world’ (of work) and the rise of the “knowledge worker”.

The expansion of “high value knowledge-intensive services” and the move towards more individual work patterns was forcing corporations to adapt to different ways of operating.

This development has blurred the lines between work and non-work, said Dr Straub and has repercussions for the way society views ‘retirement’. It has produced knowledge workers who have “multiple careers” and do not expect to retire at 60 or 65.

Anne-Sophie Parent, Director, AGE, The European Older Peoples’ Platform, was concerned about previous speakers’ suggestions and thought that it was rather cynical to say that the aim of social policies was to encourage women to have more babies because we need more taxpayers in the future to finance the European social model. Family friendly policies are necessary to ensure that women have a real choice over their fertility, not to produce more tax payers

Society should see ageing as an opportunity, not a threat.  Pension reforms are needed to make them not only more sustainable but also more equitable, and to encourage solidarity between the generations and within generations. Ms Parent was concerned that as the current pensions’ reforms are based on projections based on a male full time, full career, average earner profile, they are not taking on board women’s career breaks and shorter working lives. This could lead to an increased risk of poverty among women in old age.

Recent research shows that older people want to remain at work but face age discrimination. Ms Parent said employers and governments needed to do more to tackle this issue.

Implementing gender equality to improve labour market participation: obstacles and best practice

Sheila Wild, European Policy Director, UK Equal Opportunities Commission (EOC), explained that while the UK had met the Lisbon Agenda targets for gender equality, a high proportion of British women worked part-time. While these women were as well educated as men, they found themselves “stuck in part-time, low-skilled, lowly-paid work”.

UK workplaces were still shaped round the outdated male pattern of full-time work, with flexible working known as “the Mummy track”. There was too much emphasis on the need for women to change. In fact, said Ms Wild, it was working patterns that needed to change.

The EOC is investigating occupational segregation and the transformation of work, and has concluded that an inclusive approach is best – for both women and men - and should focus on transforming workplace practices.

Equality a goal in itself

Daniel Waterschoot, Policy Office, Directorate-General for Employment, Social Affairs and Equal Opportunities, European Commission, said equality was not just an instrument for growth and employment, but a goal in itself.

Since 2000, three-quarters of all new jobs in Europe have gone to women. However, most women’s work is still concentrated in ‘female professions’ - education, health and administration. One-third of women workers are part-time and they earn 15% less than men.

Gender equality is not a side issue, insisted Mr Waterschoot, explaining that the Commission has adopted a road map for equality, is mainstreaming gender equality in all its policies, and is setting up an Institute for Gender Equality.

Member States must commit themselves to gender equality, reducing male-female differences in their labour markets and resolving work-life balance issues. Gender equality is a “win-win situation” that benefits both women and men.

Women - the untapped potential

Marie Jepsen, Acting Department Head, Senior Researcher, European Trade Union Institute, said women were “the untapped potential for increasing economic growth”. While more women are in work, most of their jobs are insecure and poorly paid. Social policies therefore need to combine flexibility and security, and reconcile work and family care.

Welfare state regimes affect women’s ability to stay in high-quality jobs after childbirth. Nordic countries and Belgium have a “universal breadwinner” or “modified breadwinner” model, and women’s employment patterns do not change after having children. By contrast, under the British or German “maternal part-time work” model, women often leave the labour market for good.

Low-paid, part-time employment is not the answer, insisted Ms Jepsen, as it is a “sub-optima utilisation of human capital”. The key issue is to review the institutional framework to create better employment opportunities for both men and women.

Jeanne Schmitt, Senior Adviser, Social Affairs, UNICE, said Europe’s employers no longer concentrated on the model of the “male bread winner”, and worked with the social partners at all levels on gender policies.

They are tackling labour market segregation and developing diversity policies. UNICE adopted a framework of actions on gender equality with the other EU social partners which priorities for action to address gender roles and stereotypes in the labour market, promote the role of women in decision-making, draw up plans for an equitable work-life balance for women and confront the gender pay gap.

Members organisations from the European social partners (UNICE, UEAPME, CEEP and ETUC) work to minimise the adverse effects of having children and flexible working on women’s careers, and has created a multi-enterprise fund to finance maternity leave. Equal pay is an important issue, and the social partners are reviewing collective agreements and ensuring that employees understand their rights.