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Labour market shortages in a period of unemployment: Best practices and possible solutions
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Labour market shortages in a period of unemployment: Best practices and possible solutions

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Presentation by Klaas Soens (Assistant Adviser, FEB/VBO - Federation of Enterprises in Belgium) on the occasion of the EESC LMO meeting on Labour market shortages in a period of unemployment of 16 …

Presentation by Klaas Soens (Assistant Adviser, FEB/VBO - Federation of Enterprises in Belgium) on the occasion of the EESC LMO meeting on Labour market shortages in a period of unemployment of 16 November 2011.

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  • 1. Labour market shortages in a period of unemployment: Best practices and possible solutionsEuropean Economic and Social CommitteeBrussels, 16 November 2011Klaas SoensDeputy advisor researcher FEB
  • 2. 1. Observationsl Also in Belgium: a relatively high unemployment rate (6,7% in September < 9,7% EU-27) and a lot of critical vacancies l FEB survey spring 2011: 4 on 10 companies have vacancies > 3 months open + 1 on 4 had to cancel vacancies in 2010 l Construction: 1 on 2 cancel of vacancies, retail: 29%, production: 23%,… l Indeed, skills mismatch: 60% of unemployed has no secondary education diploma and 86% has maximum this diploma 2
  • 3. 1. Observationsl But next to this: 64% of critical vacancies in Flanders has no diploma demands and 50% no experience demands l 33% in 2000, 50% in 2005, 64% in 2010 → companies the more the less demandingl Increase in vacancies, even at the bottom of the crisis, just 20% drop in labour demandl Next 5 years: 500.000 vacancies will probably be opened because of (early) retirement 3
  • 4. 2. Best practicesl European Commission asks for follow-up of unemployed: < 6 months for youth and < 12 months overalll Belgium: follow-up since 2004: after 15 months for youth and 21 months overall, under the age of 50 years l Earlier regional training and coaching l Since 2004: over the economic cycles 72.000 less longterm unemployed l FEB asks for shorter terms of follow-up + to the age of 60 and more 4
  • 5. 2. Best practices Evolution du chômage de longue durée, dans le groupe des moins de 50 ans et le groupe des plus de 50 ans (Source: ONEM)225,000200,000 194,396175,000150,000 122,680125,000100,000 91,295 75,000 50,000 43,584 25,000 0 2004 2005 2006 2007 2008 2009 2010 2011 (Sept.) Plus de 50 ans, chômage ≥ 2 ans Moins de 50 ans, chômage ≥ 2 ans 5
  • 6. 2. Best practicesl Promotion of local services: cleaning, ironing,… subsidized jobs to make black jobs white l Good for low qualified (female) unemployed: 90.000 jobs (FTE) l Support of the workforce (work/life balance) l But expensive for the state budget 6
  • 7. 3. Further possible solutionsl Belgium has the most expensive unemployment policy (3,79% of GDP in 2009), but not with the best resultsl FEB asks for an EU-benchmark: l Unemployment benefits limited in time + more degressive (10% in Belgium for family heads and singles contra 40% in Europe) l Reform of “waiting allowance” for school leavers: limited in time + evaluation of training and job search efforts l Idea of a progressive benefit for training (at the regional level) 7
  • 8. 3. Further possible solutions Evolution du ratio de remplacement net des allocations de chômage, en 5 ans, moyenne pour 2 niveaux de salaire et 4 types de ménage (Source: CE et OCDE, 2011)Allocation de chômage nette comparée au salaire net 90% 80% 71% 70% 65% 63% 60% 50% antérieur 40% 35% 30% 20% 10% 0% BE AT DK IE PT DE FR FI SE EU-15 UK ES NL LU EL IT 1° année Années 2-5 8
  • 9. 3. Further possible solutionsl More development of combination of school and work: uniformisation and promotion → to decrease the number of unqualified youthl Further promotion of “individual professional training”: 6 months of training on the job + afterwards employment contractl Longer working: mentality of all stakeholders will change if the rules change → “the reason why Swedish men work long is because Swedish women work long” 9
  • 10. 3. Further possible solutionsl Investment in lifelong learning: but tripartite responsibility and not just a company investment → Belgian companies invest yearly 1,6% of labour cost in training = equal to EU-average (cf. Eurostat, CVTS3)l No increase of minimum wage: among the top 3 in Europe → OECD promotes the opposite for Belgium: lower for the youth, as in the Netherlands → to promote job creation and reduce povertyl First job is often step up for better job 10
  • 11. Thank you for your attention ! 11