The EU’s vacuous employment strategy

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On Wednesday, I attended a briefing breakfast organised by Eurociett, the European Federation of Private Employment Agencies, where we were addressed by Fabian Zuleeg, Chief Executive and Chief Economist of something called the European Policy Centre, which describes itself as “an independent think tank dedicated to making European integration work”.  So that’s OK then: non-partisan but pro-EU.

His speech was quite long, and I don’t propose to summarise it, but you’ll get the flavour from my own (also rather long) intervention which followed.

“Thank you Mr. Chairman (Lib-Dem Phil Bennion MEP ).  We have discussed the EU’s Youth Employment Guarantee.  But you need to understand that this scheme is like the EU’s “subsidiarity”.  It’s there to be talked about.  It’s there so that EU leaders have something to say when challenged on the appalling levels of unemployment in Southern Europe.  No one actually expects it to deliver.  (Of course I agree with your support for apprenticeships, but that’s not at all the same thing as a universal jobs guarantee).

You mentioned “second careers for older workers”.  I offer myself as an example.  After thirty-odd years in business, I was elected fifteen years ago as an MEP.  Mind you that’s not a route that I could recommend to others – I think employment as an MEP may prove rather short term, especially for British MEPs.

You mentioned that we used to think that economic growth of at least three per cent was needed to generated new jobs, but recent research suggests that has reduced to 1½ to 2%.  This is worrying.  We all want growth and jobs, but if lower growth is needed to deliver jobs, that suggests to me that productivity growth is depressed, which bodes ill for long-term competitiveness.

I don’t mean to criticise – well OK, I do mean to criticise – but Fabian’s speech was all jargon and generalisation.  We need European initiatives.  We need support for some member-states.  We need country-specific proposals.  OK, Fabian, but what are you going to do?  I try to imagine a nineteen-year-old unemployed Greek who might have been listening to this briefing today.  I suspect he would have gone away in despair.  Nothing practical.  Nothing concrete.

Worse yet, there are several real and immediate problems which you missed.  You didn’t talk about the EU’s excessive and onerous labour market regulation, which creates disincentives to hiring new staff.  You didn’t mention the Working Time Directive.  This breakfast is sponsored by the temporary work agencies, yet you never mentioned the Temporary Workers’ Directive.  We used to regard temporary work as a ladder back into full-time employment for those who had been out of the labour market for some reason .  The Directive kicks that ladder away.

Labour regulation is presented as compassionate protection for workers.  But we have to recognise that it protects those currently in work at the expense of those currently unemployed.  It creates barriers to entry and disincentives for employers.

You didn’t mention the excessive levels of taxes which depress growth, employment and investment.  And especially taxes on employment itself, which act as a disincentive to hiring.

Perhaps most important of all, you never once mentioned the €uro, which has created devastation across Southern Europe on a scale not seen since the Great Depression.  This is a direct result of EU policy, yet we are frightened to address it.

You criticise member-state governments for trying to reduce state payrolls, and argue that these should be maintained.  The private sector was not able to fill the gap.  But in the UK, we have a different experience.  When the current government started to reduce state payrolls, arguing that the private sector would provide the jobs, it faced ridicule and derision from the Labour opposition.  Yet exactly that has proved to be the case (at least they got one thing right).  Job creation in the private sector exceeded the cuts to the state payroll, and we now have more people in employment in the UK than ever before.  It is the excessive and bloated size of the state sector which is squeezing the life out of the productive economy. 

I can agree with you, however, when you point to energy prices as a threat to European growth and jobs.  Unfortunately we don’t seem to have a solution in mind.  As long as we cling to climate alarmism and a unilateral climate mitigation policy, we will be stuck with unsustainable price levels, and we will continue to drive business abroad and pensioners into fuel poverty”,

 

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8 Responses to The EU’s vacuous employment strategy

  1. neil craig says:

    Interesting that the correlation between growth and jobs is said to now be kicking in at 1% growth. This may be explained by the fact that there is also a virtually 1:1 correlation between energy use and gdp. As growth in Europe’s energy use drops below zero for political reasons& new technology also gets politically banned gdp growth can mainly be obtained by more people working. Technology improvements which even the politicians cannot stop us adopting may explain why job growth starts on 1% rather than at zero.

    I don’t know if this means we would not cut unemployment by increasing energy supply 10% a year and gdp the same, as China is, but it is an experiment I would love to try.
    —————————————–
    Elsewhere I have just found my question answered. The Chinese now say they need 7.2% growth for full employment. http://nextbigfuture.com/2013/11/china-needs-72-gdp-growth-for-fully.html

  2. bumper says:

    Fabian looks like he has never had a job. Lard A**e springs to mind.

  3. Mike Stallard says:

    This man, of whom I have never heard, is dictating the economic policy in our country. Who is he? What right has he to do this? What can I do about it if he is proven wrong?

    Answers on the back of a cigarette packet (political cliché now twenty years or so out of date).

  4. Me_Again says:

    Many of the jobs created in Britain, as I understand it, are temporary/part time/zero hours contracts/8 hour contracts/16 hour contracts. I know companies that now do not offer full time work at all unless it is for management. I know a particular company that went around systematically reducing existing contract hours, refuse and you were marked for ‘extra’ attention.
    With the crazy benefits system we have, if you are young and unmarried but living on your own, you need to work 30 hours of a low paid job in order to qualify for tax credits. So all the zero, 8,and 16 hour contracts are taken by people as second jobs and migrant worker jobs.
    This is NOT because all of these people don’t want to work it is because they cannot afford to work. When they start a low contract hours job they lose other support and entitlements. Housing benefit under current government reform has been chopped for the lowest income families. Careful calculations need doing to decide whether you can even apply for a job otherwise literally the ends don’t meet. The jump from benefits to work has been made steeper by this government.

    A smarter way to get people working more hours would be to incentivise them. It is a huge gap between a zero hours contract and a 30 hour contract -as my son explained to me. He is stuck on 20 hours where he works and just has his head above water if he only works 20 hours. He would love to escape the pressure to sell placed on him by the stupid tossers that pose as managers in his shop but the options are limited because to survive without benefits in rented accommodation he has to work X hours or he no longer treads water. Worse still there’s no end in sight with so few jobs around where he lives and the catch 22 of moving to another area -almost all others have higher rents.
    I walk around the 99p shop locally or Bargain madness and pass two of the young girls re-stocking shelves, they chatter gaily to each other -in Polish? And I think to myself this ‘no-borders’ to migrant workers thing is brilliant for employers, cheaper and cheaper work forces………..better profit margins and fewer admin costs, fewer workers benefits. Yeah an employers wet dream.

    • Chris says:

      Vote UKIP.

      • Me_Again says:

        It is something I’ve done since there has been a UKIP candidate locally.
        I do hope it will make a difference when we win.
        I do hope that UKIP don’t go totally in the direction of employers without regard to the employed, if they do their star will rise quickly and fall just as swiftly……..
        I do hope they shun the globalist cause -the antithesis of what they want really and don’t consider the slash and burn tactics sensible.

  5. www.rogerhelmer.com says:

    I don’t buy the idea that employers and employed must always be in opposition to each other. In well-run businesses with responsible unions, the two parties recognise their interdependence.

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