How to Reconcile employees’ interest with the increasing older workers employment policies

1. Employment rates in Europe

The European trade union movement supports the ambitious targets set by the European Council in Lisbon (2000) and Stockholm (2001): increase of the general employment rate to 70% and of the employment rate of older workers (55 to 64) to 50% by 2010. This increase is crucial in order to ensure the sustainability of the pension system, whatever be their design.
As to the general employment rate in Europe (25) we reached 62.9% in 2003. That means that we are still 7% below the treshhold set in Lisbon. One of the reasons for this state of play is that economic growth in Europe is too low: 0.8% in 2003 as compared to 3.1% in the US. Employment growth in 2003 was almost static (0.2%) while the unemployment rate rose to 9.1% up from 8.8% in 2002. GDP growth for the enlarged EU is foreseen to rise to 2.0% in 2004 and to 2.4% in 2005.
For the European Trade Union Confederation (ETUC) a qualitative growth policy is a precondition reaching the targets set in Lisbon and Stockholm concerning employment in general and employment of older workers in particular. Also the sustainability of decent pensions — whatever be their design and type of financing — is dependent on a good economic performance by the European economy. Therefore the European Stability and Growth Pact needs urgent revision: it should ensure not only monetary stability but also economic growth.
As to the employment status of the over-55s it is also generally acknowledged that the employment rate in Europe in the 55-64 age group is unsatisfactory: with 40.2% in 2003 we are far away from the Stockholm target of 50% (by 2010). The situation at national level is quite different: Sweden realizes already 68.6% while Italy stands at 30.3%.
The average age of withdrawal from the labour market in Europe in 2003 was 60.4%. The Barcelona Council (2002) decided that by 2010 the average exit age should reach 65 years.
The ETUC has never accepted this situation as irreversible, in particular since the original social response (early withdrawal) to an economic problem (high youth unemployment) was subsequently diverted from its original objective, namely to create more employment opportunities for young workers. Indeed, very soon the social measure of early retirement was turned into a convenient tool for companies to get rid of older employees at a low cost at an ever earlier age.
Soon it became clear that this dumping of older workers also led to a waste of human, social and economic resources, depriving enterprises of valuable expertise and know-how and in fact of the ‘memory’ of the company. Numerous are the companies and even sectors who, soon after having laid off their older workers, were confronted with huge shortages of qualified workers and made great efforts to re-recruit the same people they had first excluded.
The ETUC cannot accept the systematic exclusion of older workers from the labour market but neither the European Commission’s radical stance on the general discouraging of early withdrawal from the labour market: for the ETUC early retirement scheme should remain available as instruments of last resort to alleviate painful industrial restructurings if no other jobs are available and also as an exit route for particular heavy or unhealthy jobs. In the whole discussion on activation of older workers the ETUC believes that before starting to discuss about the increase of the statutory retirement age as some governments and employers do, Europe should look for policies which allow and motivate men and women to remain active until they reach the normal statutory retirement age.
Can things be changed and the trend be reversed? The examples in several countries prove that reversing the trend is possible. The trend in the employment of older workers over the period 1998-2003 was most favourable in Finland (+13.4% points), Hungary (+11.6% p.), the Netherlands (+10.9% p.), France (+8.5% p.) and Denmark (+8.2% p.) as compared to +4.4% p. in EU 25. In Italy the performance was very weak (only +2.6% p.) and in Poland the trend was even negative: -5.2% p.

2. The way forward

The main policies used to maintain older workers in the labour market include:
• Removing incentives to early retirement and encouraging later retirement and flexible retirement;
• Legislation to counter age discrimination and awareness-raising campaigns among employers in view of changing attitudes;
• Guidance and training programmes regardless of age;
• Employment incentive schemes including active employment policies and special job offers for older workers.
Two other policy issues identified as being vital in an integrated approach to active strategies but rarely implemented are care infrastructures and working conditions. An in-depth analysis of these policy areas has taught that all the above-mentioned issues are of equal importance and that they are all multidimensional and complex in themselves. This makes the issue of active ageing even more challenging for policy makers.

Martin Hutsebaut: Administrative Manager, European Trade Union Institute, Brussels

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