Labour market and wage developments in 2004, with special focus on the risk of jobless growth

This report examines recent labour market developments from a macroeconomic perspective, with the aim of shedding light on the interaction of employment trends with others macroeconomic developments such as GDP and productivity growth in 2004. It presents in a comprehensive way the main findings related to recent trends and prospects on both the quantity side (employment, participation, unemployment) and labour cost side (wage and unit labour cost developments).

The special focus of the report takes a detailed look at one of the pressing problems facing policy makers as regards labour markets. It asks whether the EU, in the event of an upturn of economic activity, faces the same risk of a “job-loss” or a “jobless” recovery or may continue to be job-rich as in 1995-2000. This question clearly has important ramifications for the future growth prospects of the EU and the possibility of achieving the Lisbon goals.

By combining macroeconomic and microeconomic aspects, the report provides the necessary depth and analysis that can fulfil a variety of policy needs such as multilateral surveillance of Member States’ economies by the Economic Policy Committee, a better understanding of the contribution of employment to growth in the context of the Lisbon strategy, the necessary information on wages and labour costs for the macroeconomic dialogue.