Single market means 'more jobs for British workers'

Writing exclusively for our sister publication PoliticsHome, László Andor explains Europe's plans for youth unemployment and why British workers benefit from our membership of the EU.

By László Andor

László Andor is the Secretary General of the Foundation for European Progressive Studies (FEPS) and a Former European Commissioner for Employment, Social Affairs and Inclusion.

12 Sep 2014

What is the EU's strategy to tackle youth unemployment?

Youth unemployment in the EU is at record levels due to the economic crisis - over five million. More than one in five young Europeans on the labour market cannot find a job; in Greece and Spain it is one in two. Clearly this situation is unacceptable and unsustainable, especially when it comes to the massive polarisation of the employment situation inside the eurozone.

To tackle youth unemployment, the commission has persuaded EU countries to adopt a fundamentally new approach known as the youth guarantee based on structural reforms of training, education and job-search systems, modelled on the successful schemes used in Austria and Finland.

Under the youth guarantee member states should ensure that, within four months of leaving school or losing a job, young people can either find a job suited to their education, skills and experience or acquire the education, skills and experience required to find a job in the future.

Member states have already taken concrete steps to make the youth guarantee a reality. In most countries setting up the youth guarantee requires in-depth structural reforms of training, job-search and education systems that cannot be delivered from one day to the next. The main source of EU money to support implementation of the youth guarantee is the European social fund, worth over €10bn every year and a further €6bn is available through the youth employment Initiative for countries with the most serious youth unemployment.

We cannot create significant numbers of jobs without economic growth and the youth guarantee is no substitute for macroeconomic instruments. But once a real economic recovery takes off in Europe, the youth guarantee can help to make sure far more young people can get a job.

How is the EU investing in human capital?

Investing in human capital is essential for giving people the training and skills that help to ensure fairer job opportunities for all EU citizens and to give a chance of a better life for the EU's poorest people. Europe's main instrument to achieving this goal is the European social fund (ESF), worth over €10bn annually. Every year the ESF helps some 15 million people to upgrade their skills to labour market needs and to escape social exclusion and poverty. In 2014-20, the UK will benefit from the ESF to the tune of around €5bn.

Investing in people's education and training to improve their employability by giving them relevant skills and experience, brings significant productivity gains for the whole economy. Examples of ESF-funded projects in the UK include the 'Smart exporter' programme in Scotland, which is giving employees in 6000 companies the skills needed to boost exports. The 'Exploring enterprise2 programme' in Northern Ireland is helping people to acquire extra skills. People in Tamworth are getting the opportunity to invest in their skills and work-relevant experiences through the Tamworth employability bank. In North London, an innovative project called ¡nspire! has proven highly successful in reaching out to 16-19 year-olds who are not in education, employment or training supporting them with a series of tailor-made workshops and skills development sessions focused on their employability skills.

How does EU membership benefit UK workers?

Full access to the EU single market means more jobs for British people. But the EU also means a lot in terms of the quality of employment and working conditions.

The EU treaty has obliged member states to ensure equal pay for equivalent work by men and women since 1957, and the UK's 1970 Equal pay act was introduced to comply with this obligation. It is also EU law that obliges employers in the UK to ensure that their workers benefit inter alia from paid holidays, limits to working hours, consultation and information or protection in case of insolvency or transfer of company ownership, clear information on conditions applicable to their contract or employment relationship and protection from discrimination against part-time or temporary agency workers.

The EU also requires employers to protect their workers from accidents and occupational diseases in the workplace. Health and safety rules are often ridiculed for being superfluous 'red tape' but work-related accidents and diseases affect all sectors and professions, irrespective of whether people are sitting behind a desk, driving a truck or working in a mine or on a construction site. They not only cause personal suffering but also impose high costs on companies and society as a whole in terms of lower productivity and higher health care costs.

EU health and safety rules not only increase the wellbeing of workers but also boost productivity (through fewer absences). Moreover, pan-European health and safety rules ensure that UK companies do not face unfair competition from companies based in other EU countries that could otherwise apply laxer health and safety rules. The European commission has proposed a new strategic framework for health and safety, which identifies key future challenges in the 2014 - 2020 period such as ageing of the workforce and improving the prevention of work-related diseases.

What are the benefits and challenges of free movement of workers?

Free movement of workers to and from other EU countries is of huge benefit to the workers concerned, in terms of more job opportunities, and to employers, in terms of addressing labour shortages and skills gaps. Mobile EU workers usually pay more in tax and social security contributions than they receive in benefits and so are net contributors to the UK exchequer, as has been recognised by the UK's Office of budget responsibility, the OECD and many other independent studies. As a result UK workers have to pay less tax than they would in the absence of workers from other EU countries.

Workers from other EU countries also tend to be complementary to UK workers, doing different jobs, rather than taking jobs from Brits. Outright competition for the same job is more the exception than the rule.

There are, nevertheless, some challenges that need to be understood and addressed. The safeguards that exist under EU law to prevent abuse of host countries social security benefits must be applied strictly, even if in practice the actual risk of abuse is minimal, and neither the British nor other governments have been able to provide any evidence of systematic or widespread abuse of benefits by people from other EU countries.

Labour inspectors play an important role in preventing fraud or social dumping. They must be given enough resources to check that workers from other EU countries are paid at least the statutory minimum wage and are employed legally. In the same context, the commission proposed in April 2014 to step up cooperation between EU countries on tackling undeclared work.

In countries with significant incoming migration, there can be problems when there is a large, sudden influx of people from other EU countries into particular towns or areas, putting a strain on schools, housing, healthcare and infrastructure. But the answer to these problems is to invest in new facilities, housing and services, not to turn away people that are working hard and more than paying their share into the UK's budget. The UK authorities should listen to people where these problems arise, and be prepared to invest in new infrastructure and services to address these problems, rather than simply take advantage of the economic and financial benefits of workers coming from other EU countries.

In countries with more outward migration, on the other hand, there are risks of losing a productive workforce, especially if highly skilled people are overrepresented in the workforce moving abroad. These countries have to develop a smart human capital strategy that takes into account the movement of professionals. Again, EU money can contribute to funding such programs.

Read the most recent articles written by László Andor - SOTEU 2020 was business as unusual, says FEPs Secretary General László Andor

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