Harsh new employment realities shatter dreams of a job-for-life

Date: 01/05/1997

By Simon Coss

FOR every unemployed person in the EU, eight others are currently in work - and it is the relationship between these two groups which lies at the heart of the debate over the future of European social policy.

If the Union seriously wants to help the 18 million Europeans queuing up at unemployment offices across the continent to get back to work, then the 168 million wage-earners will have to make sacrifices.

There is, quite simply, less work around than there used to be. As the Union changes from a labour-intensive society based on heavy industry to a post-industrial or information society (to use the current European Commission buzz-word), more 'old' jobs are being lost than 'new' ones created.

The Commission's oft-cited 1993 White Paper on Growth, Competitiveness and Employment admitted that there was no miracle cure for the problem and warned that changes in behaviour and policy were needed in all areas.

It also suggested a number of fields where new employment could be generated, including local services such as home helps for the elderly, minding pre-school age children, running local shops and working in leisure centres.

But while such initiatives may go a small way towards reducing joblessness, the basic fact remains that - to cite a current example - the 3,100 Renault carworkers about to lose their jobs in the Brussels district of Vilvoorde will not all find employment as child-minders.

In reality, precisely how many new jobs can be created can only be guessed at - a fact graphically illustrated by Commission figures on how much employment has been generated through the advent of the single market.

The institution boasts that the project created between 300,000 and 900,000 new jobs between its conception in 1987 and its birth in 1993. Given that the higher estimate is three times larger than the lower, all these figures really show is that the Commission is just as much in the dark as anyone else over the whole issue.

But, in a sense, this kind of quibbling over numbers is missing the point. What is perfectly clear - using even the most glowingly optimistic estimates - is that the 18 million Europeans currently on the dole will not all find 'new' employment.

If it is not possible to exchange new jobs for old, the only real alternative seems to be to reallocate existing employment.

But this would mean governments asking the majority of voters, the employed, to work fewer hours and earn less money - hardly a recipe for re-election.

Europe's politicians have nevertheless embarked on a series of high-profile crusades aimed at showing the unemployed how much they care.

From the Commission's point of view, the centrepiece has been Jacques Santer's grandiosely titled 'confidence pact for employment'.

Launched a little under a year ago, Santer's plan was to encourage governments to agree on four main priority areas for tackling unemployment: economic growth, completing the internal market, reforming social benefit systems and targeting the EU's structural funds more directly towards job creation.

It has not been an overwhelming success. Things got off to a bad start when Union finance ministers torpedoed Santer's call for

top-up funding for the Trans-European Network transport projects, and went downhill from there. The Commission president embarked on a tour of European capitals trying to sell his 'big idea' and found his calls for an EU-wide 'crusade for jobs' met with a somewhat frosty response.

National leaders made it clear that they did not appreciate the Commission asking them to tighten their belts and cut public spending in order to meet the tough convergence criteria for the single currency while at the same time calling for ambitious national job-creation programmes.

Ironically, it is the euro - seen as the great symbol of a single market in a unified Europe - which has been the cause of arguably the most turbulent period of Union-wide social unrest in the EU's 40-year history.

The Commission insists it is crucial to stick to the timetable and ensure that the first wave of eligible member states adopts the euro in 1999, arguing that the current pain will be worth it in the long run.

But many are not convinced. The past two years have seen wave upon wave of strikes and protests across the continent, with confidence in the whole 'European idea' at an all-time low. Disgruntled workers have taken to the streets in Paris, Brussels, Athens, Rome, Bonn and countless other European cities, protesting at the implications for their jobs of governments' attempts to qualify for the prized euro-zone.

Yet while they continue to pursue economic policies blamed for the rising jobless total, Europe's leaders are, at the same time, stressing their commitment to fighting unemployment at every opportunity.

It now seems clear that the revised Maastricht Treaty set to be unveiled in Amsterdam this June will contain a chapter on employment. But critics argue it will be long on words and short on substance. The new treaty will set up an employment advisory committee, aim to encourage member states to work together on job-creation projects and provide for annual assessment of national measures.

As far as the Commission is concerned, most EU-level legislation on employment and social policy is now in place. The flood of proposals pouring out of the institution's Directorate-General for social affairs (DGV) in the late 1980s and early 1990s - much of it concerned with health and safety in the workplace - has now slowed to a trickle. The one significant area which remains to be tackled is the delicate issue of worker involvement in company decisions.

Certain rules already exist governing employee consultation, most notably the 1994 European Works Council Directive. This EU law obliges multinational companies over a certain size to set up committees of management and workers which must be consulted in the event of major company restructuring or closures. But, crucially, the workforce has no final say in the decision managers take.

Thus the legal row surrounding Renault's apparent disregard for the directive when it dropped its Vilvoorde bombshell is not an argument about whether or not the factory should have been closed, but about how the decision was taken.

Proposals for a European Company Statute, allowing businesses to set up as European rather than national operations, would allow a greater degree of worker influence. But these plans have been stuck in Council of Ministers' negotiations between EU governments for more than 20 years.

The problem is Germany. Bonn already has extremely forward-looking rules which give workers the right to sit on company boards, and has always complained that the current Union proposals would force it to take a step backwards. Others, however, do not want to be obliged to match up to the Germans.

The issue is now being examined by a high-level group under the chairmanship of former European Commissioner Etienne Davignon, with hopes now high that he could announce a breakthrough in early May.

But even if agreement is reached on this issue, it is clear that Europe's social and employment landscape is changing irrevocably.

The experience of the UK - which has moved furthest down the deregulated free-market road now being tentatively explored by Union partners - suggests unemployment will stabilise at around 7 to 10&percent;, while the 'demographic time bomb' of an ageing population means pay-outs from the EU's traditionally generous social security systems will continue to be progressively reined in.

Any Europeans still dreaming of the 'job-for-life' security of the post-war years are in for a rude awakening.