SOLIDAR Social Progress Watch - No. 6 - 10th February 2016
The Social Progress Watch (SPW) initiative is a tool implemented by members and partners of SOLIDAR to monitor the commitment and progress made by national governments towards a more social and cohesive Europe. Through the SPW, SOLIDAR collects on a yearly basis country reports providing recommendations for upward social convergence as well as case studies presenting innovative and sustainable models to promote social inclusion, the social economy and quality job creation.

The European labour market continues to be plagued by high levels of unemployment, despite showing a slight improvement on average (i.e. 10.2% EU28 in 2014, down from the record high of 10.9% in 2013).

The country studies of the 2015 SOLIDAR SPWI provide a tangible insight in the relation between this state of play and the policy response within the 2014 European Semester. The high levels of unemployment continue to trigger a one-sided policy response aimed at more flexible labour market rules and wage setting, despite international institutions such as the International Labour Office (ILO Office) clearly stating ‘[…] that reducing protection for workers does not lower unemployment.

Against this background, SOLIDAR reiterates its call for a reorientation of the currently narrow-minded set of structural reforms pursued by national governments and promoted by the European institutions. The current set of reforms carry a high social costs as they have been contributing to the rise in poverty and social exclusion. SOLIDAR advocates instead for a set of progressive structural reforms such as investment in education, social services and social security systems as well as a comprehensive reform of the current tax system towards progressive taxation of wealth and environmentally damaging activities as well as financial transactions as foreseen in the proposal for a Financial Transaction Tax.

The Croatian labour market has been confronted with a consistently high unemployment rate (17.3% in 2014, up from 16.0% in 2012), while the increase in unemployed young people has been especially marked since the start of the crisis (45.5% in 2014 for people in the labour force below the age of 25).

According to the country-specific recommendations issued to the Croatian government, reforms should, above all, be focused on the creation of a less rigid labour market, highlighting a review of the conditions for dismissal and working time, wherein the comparatively high labour costs are better aligned with productivity developments.
However, the SOLIDAR EU Strategy Group in Croatia is concerned with the overall direction in which these reforms are headed, notably cautioning that lowering labour costs alone will not bring about the desired effect of reducing unemployment. Instead, our Croatian Strategy Group points out that the
poor performance of the labour market generally stems from the limited governance capacity of the public sector and the lack of available data, which hampers both effective policymaking and implementation.
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The European Commission has reported on the prolonged recession that continues to cripple the Greek economy and its labour market, summarising ‘Unemployment, youth unemployment and the NEETs rate have all increased considerably.

The SOLIDAR EU Strategy Group, led by SOLIDAR member Volkshilfe Hellas in Greece agrees with the Commission that the high unemployment rate in the country remains one of the top social problems, and it stresses that an efficient solution needs to be found immediately. Our Strategy Group reports that the unstable political environment in Greece (i.e. the quick succession of an election, a referendum, capital controls, then a new election, etc.) has had a negative impact on the Greek labour market, thwarting the materialisation of the slightly more favourable forecasts in terms of job growth. As such, our Strategy Group stresses that a return to political stability is a sine qua non for implementation of solutions to the current challenges.

Once this has been achieved, specific measures should be taken to:
  • Fight youth unemployment
  • Offer better working conditions to the employed population (e.g. insurance, minimum wages, social welfare and services)
  • Protect the employers towards the harsh economic situation of the country
  • Protect the working relations

The European Commission has reported that ‘Hungary faces significant labour market challenges due to a number of structural problems and low economic growth.’  While the labour statistics are improving, the country still performs below the EU average.

The country-specific recommendations call on the government to further strengthen the labour market reforms that have been introduced in recent years.  In contrast, the controversial public works scheme – where unemployed workers need to join in public works to retain their benefits beyond a certain period – is again targeted for its questionable effectiveness.

The SOLIDAR EU Strategy Group in Hungary, led by SOLIDAR partner Progressive Hungary Foundation is critical of the fact that the Commission refers to recent labour market reforms such as the restriction of early retirement, the review of the disability pension and benefit system, changes in unemployment and social assistance system, and easing return from parental leave as reforms that are ‘going in the right direction’.

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The Slovakian labour market continues to be plagued by one of the highest unemployment rates in the EU, although following the high water mark of 14.2% in 2013, the number unemployed persons as a percentage of the labour force has now dropped to 13.2%. Against this background, Slovakia particularly faces long term and youth unemployment rates that are among the highest in the Union, while the Roma population and women are also vulnerable groups on the labour market.
Country Specific Recommendations reiterate their call for more effective measures on all these issues, whereby a range of tailored activation measures to counter the high unemployment rate of vulnerable groups are highlighted.
In light of the government’s current measures and their lacklustre results, the SOLIDAR EU Strategy Group in Slovakia, led by SOLIDAR member AOPSS points out that restrictive
measures alone will not support and guide vulnerable groups toward a greater participation to the labour market. Rather, it is crucial to complement such measures with positive campaigns that should target the historical roadblocks in a society that still feels the effects of its communist past.
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The SOLIDAR Social Progress Watch is funded through the EU Programme for Employment and Social Innovation (EaSI).
Copyright © 2016 SOLIDAR, All rights reserved.

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