EUROPEAN COMMISSION
Strasbourg, 21.11.2023
COM(2023) 904 final
PROPOSAL FOR A JOINT EMPLOYMENT REPORT
FROM THE COMMISSION AND THE COUNCIL
Table of Contents
KEY MESSAGES
CHAPTER 1. OVERVIEW OF LABOUR MARKET AND SOCIAL TRENDS, PROGRESS ON 2030 TARGETS, AND KEY HORIZONTAL FINDINGS ON SOCIAL CONVERGENCE
1.1 Key labour market trends
1.2 Key social trends
1.3 Progress on the 2030 EU headline and national targets
1.4 Update on the Social Scoreboard
1.5 Key horizontal findings from the first-stage country analysis on social convergence
CHAPTER 2. EMPLOYMENT AND SOCIAL REFORMS – MEMBER STATES’ PERFORMANCE AND ACTION
2.1 Guideline 5: Boosting the demand for labour
2.1.1 Key indicators
2.1.2 Measures taken by Member States
2.2. Guideline 6 – Enhancing labour supply and improving access to employment, skills and competences
2.2.1 Key indicators
2.2.2 Measures taken by Member States
2.3 Guideline 7: Enhancing the functioning of labour markets and the effectiveness of social dialogue
2.3.1 Key indicators
2.3.2 Measures taken by Member States
2.4: Guideline 8: Promoting equal opportunities for all, fostering social inclusion and fighting poverty
2.4.1 Key indicators
2.4.2 Measures taken by Member States
CHAPTER 3. FIRST-STAGE COUNTRY ANALYSIS
Belgium
Bulgaria
Czechia
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
The Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
KEY MESSAGES
The Joint Employment Report (JER) by the European Commission and the Council monitors the employment situation in the Union and the implementation of the Employment Guidelines, in line with Article 148 of the TFEU. The report provides an annual overview of key employment and social developments in the Union and of Member States’ recent policy measures, in line with the Guidelines for the Employment Policies of the Member States 1 . It also identifies related key priority areas for policy action. Chapter 1 of the report presents an overview of key employment and social trends and of progress made on the 2030 EU headline and national targets, as well as horizontal findings based on the principles of the Social Convergence Framework (SCF). Chapter 2 analyses challenges and policy responses in the Member States for each of the four employment guidelines. Chapter 3 provides country-specific analysis for all Member States in line with the principles of the SCF. Based on the Commission’s proposal, and following exchanges in the relevant Council advisory committees, the final text will be adopted by the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council. Addressing the challenges identified in the report will contribute to achieving upward social convergence, strengthen the Union’s drive towards fair green and digital transitions and contribute to facing demographic change, as well as the achievement of the Sustainable Development Goals and the implementation of the Union of Equality Strategies 2 .
The 2024 JER maintains a strong focus on the implementation of the European Pillar of Social Rights, in line with the Action Plan of March 2021, welcomed by the EU Leaders at the Porto Social Summit. This is done notably via thematic boxes covering key challenges in the areas of equal opportunities and access to the labour market, fair working conditions and social protection and inclusion, in light of the socio-economic outlook and most recent policy initiatives. The report monitors progress towards the 2030 EU headline targets on employment, skills, and poverty reduction, also welcomed by the EU leaders in Porto, and by the June 2021 European Council. For the first time, this edition reports on progress towards the 2030 national targets put forward by the Member States, as presented and discussed in the June 2022 EPSCO Council.
Employment, skills and poverty reduction targets by 2030 are driving policy actions across the relevant policy domains at EU level and in the Member States. Solid employment growth, on average over the last two years, has put the EU well on track towards its headline employment target by 2030 (from the 2022 level of 74.6%, the employment rate needs to rise by another 3.4 pps in the EU until 2030 to reach the 78% target), although most recent quarterly data point to slower progress.
·Against the background of the post-COVID recovery and the good labour market developments, by 2022 all Member States had made progress towards their employment targets. For the large majority of them, further efforts in terms of employment and skills policies are needed until 2030 to reach their targets. In a significant number of Member States, the employment rates of the lower qualified harbour the largest scope for improvement, followed by the employment rates of older women (55-64) and young people (20-29) in a good number of countries.
·At the same time, significant progress is needed to reach the EU headline target of 60% of adults in learning every year in the EU by 2030, from a low level of 37.4% in 2016, in line with the ambition for Europe to remain competitive, innovative and inclusive, also in the context of the green and digital transformations.
·Finally, against the challenging socio-economic context over the past three years, and thanks to the decisive policy action at EU and Member States’ level, the number of people at risk of poverty or social exclusion remained broadly stable in the EU (a decrease by 279 000 in 2022). While the majority of Member States registered some progress towards their national poverty reduction targets since 2019, several others experienced changes in the opposite direction. Significant further efforts and continuous monitoring will therefore be needed to ensure that the set national ambitions are met in order to reach the EU headline target of at least 15 million fewer people at risk of poverty or social exclusion by 2030, in comparison with 2019.
Together with cohesion policy funds, the implementation of the reforms and investments in Member States’ recovery and resilience plans (RRPs) supports fair, inclusive and sustainable growth. Alongside the support provided to policy interventions in the respective policy areas by the European Social Fund Plus (ESF+), the European Regional Development Fund (ERDF), the Just Transition Fund (JTF) and the Technical Support Instrument (TSI), the Recovery and Resilience Facility (RRF) promotes the Union’s economic, social, and territorial cohesion by improving the resilience, crisis preparedness, adjustment capacity, and growth potential of the Member States, and fostering high quality employment creation through relevant reforms and investment. In this way, the Facility also contributes to the implementation of the European Pillar of Social Rights. 3 A total of around EUR 139.6 billion allocated to Member States contributes to social spending, which represents about 28% of the total estimated expenditure. 4 To date, the Commission has disbursed around EUR 175 billion under the RRF in both grants and loans as well as pre-financing. Of the 6266 milestones and targets included in the 27 RRPs, 2045 are expected to contribute to social policies. Of the 808 milestones and targets fulfilled as of 13 November, 243 foster social policies, corresponding to around 30% of the total number of fulfilled milestones and targets, and almost 12% of the milestones and targets linked to social policies included in the 27 RRPs. As part of the policy response analysis, the JER also includes a selection of measures supported by EU funding, notably the RRF, ESF+, ERDF, JTF and the TSI. All these will support growth and employment prospects as well as social and economic cohesion and resilience in the Union.
The 2024 JER has a stronger country-specific focus in line with the principles of the Social Convergence Framework (SCF), following discussions in the EPSCO Council of June 2022, as prepared by the Employment (EMCO) and the Social Protection Committees (SPC) 5 . Relying on existing tools (the Social Scoreboard and the agreed JER traffic-light methodology), Member States’ labour market, skills and social challenges are analysed in order to identify potential risks to upward social convergence that require deeper analysis in a second stage. In this sense, the country-specific analysis reinforces the monitoring of the employment, skills and social policy domains in the European Semester, in line with Art. 148 of the TFEU. The JER contains a first-stage country analysis, mostly based on the Social Scoreboard headline indicators. All in all, the first-stage analysis of the SCF points at:
I.Member States starting with relatively worse overall employment and unemployment outcomes having improved more substantially in 2022, which points at convergence on these dimensions;
II.potential risks to upward social convergence with regard to skills, despite the recent positive developments, which may pose employability challenges and raise inequalities unless policy action is significantly stepped up;
III.social outcomes that are broadly stable overall in 2022 despite the multiple crises, but that should be closely monitored in light of the high cost of living.
More detailed second-stage analysis (using a wider set of quantitative and qualitative evidence, including on progress towards the 2030 national targets) will be conducted by the Commission services in relation to the countries for which potential risks to upward social convergence are identified in the first stage (Bulgaria, Estonia, Hungary, Italy, Lithuania, Romania and Spain, based on the analysis presented in this report).
Employment, skills and social challenges across EU Member States by headline indicators of the Social Scoreboard
Note: 1) Data for the indicator on adults’ participation in learning is not yet available. 2) Data are missing for some indicators for some countries – see Table 1.4.1 in section 1.4. Legends for all indicators are presented in the Annex.
Overall, labour market outcomes were strong on average in 2022 and 2023, despite the exceptional shocks faced, and surpassed pre-pandemic levels in many cases. Although the EU economy has recently lost momentum, the labour market continued to show resilience in the wake of the shocks related to health, supply chains, energy and food prices, natural disasters and geopolitical instability. The exceptional measures put in place at the EU and the national level in the difficult socio-economic context of the last three years have contributed to this performance. 6 Overall, the employment rate reached 74.6% in the EU in 2022, and rose further to 75.4% in Q2-2023, which is 2.5 pps above pre-pandemic levels (of Q4-2019). At the same time, the unemployment and long-term unemployment rates reached their lowest levels of 6.2% and 2.4%, respectively, in 2022 in the EU (further down to 6% and 2.1% in Q2-2023). Differences were nonetheless reported across Member States and regions, as well as across sectors. The energy crisis dampened employment growth in highly energy-intensive sectors, while the information and communication technology (ICT) sector saw the highest employment growth, adding more than one million jobs between Q4-2019 and Q2-2023.
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A strong labour market despite the exceptional shocks faced |
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75.4 %
75%
6%
14.3%
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Key labour market indicators in the EU‑27 (%, quarterly)
Source : Eurostat [ lfsi_emp_q ], [ une_rt_q ], [ une_ltu_q ] and [ lfsi_neet_q ]. Seasonally adjusted, not calendar adjusted data. |
Sizeable labour and skills shortages pose bottlenecks to economic growth and can slow down the green and digital transitions if not adequately addressed. Labour shortages are widespread across occupations and skills levels. Despite some easing in recent quarters, the job vacancy rate was at 2.7% in Q2-2023 in the EU, which is well above the average of 1.7% for the period 2013-19. 7 Sizeable shortages were reported in 2022 in sectors such as healthcare, STEM (particularly ICT), construction and certain service occupations. Labour shortages in sectors that are key to the green transition have doubled since 2015, while training provision in these sectors remains below average. In 2021, more than 60% of EU enterprises that recruited or tried to recruit ICT specialists had difficulties in filling such vacancies. Widespread labour shortages are driven by strong labour demand despite the recent slowing of the economy, but factors limiting labour supply (such as population ageing and a falling trend in hours worked per employee) may also have played a role. At the same time, labour shortages are also importantly generated by the new jobs created by the green and digital transformations and the lack of labour market relevant skills in the workforce. A recent mapping of regional competitive sustainability shows shifts in employment towards greener and more productive sectors over 2008–18 and marked differences across regions (the more developed of them faring better in the transition than the less developed or the transition ones). 8 Finally, in certain cases and sectors shortages also relate to poor working conditions, especially in sectors like healthcare, residential care and transport. Improving access to the labour market, in particular through fostering the labour market integration of under-represented groups (women, young people, older workers, people with a migrant background) could help counterbalance the impact of demographic change on labour supply. An adequate provision of up- and reskilling is essential, in line with the European Skills Agenda. Addressing gender disparities in education, in particular in tertiary education attainment and in the choice of study fields, could help to increase high-skilled labour supply. Several Member States have started to develop their national skills strategies, including under the Pact for Skills, and defined national priorities and measures to modernise and future-proof vocational education and training (VET). Strengthening working conditions would also help attracting and retaining workers in certain sectors and occupations with shortages. Furthermore, promoting intra-EU mobility, as well as attracting skilled workers from third countries, while ensuring respect and enforcement of labour and social protection rights, and channelling legal migration towards occupations experiencing shortages with the support of EU Talent Pool can also contribute to addressing labour and skills shortages, in full complementarity to harnessing talents from within the Union. 9
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Sizeable labour shortages in the Union |
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At or above 4% vacancy rates
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Job vacancy rates in the EU by economic activity (%, annual data)
Note: NACE 2 activities, B-S (Industry, construction, and services (except activities of households as employers and extra-territorial organisations and bodies), C (manufacturing), F (construction), G-I (wholesale and retail trade, transport, accommodation, and food services), J (information and communication), M-N (professional, scientific, and technical activities). Source: Eurostat [ jvs_a_rate_r2 ] |
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30% higher labour shortages in 2022 compared to 2019 |
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Despite nominal wage increases, real wages fell in almost all Member States in 2022, to various degrees, highlighting the importance of well-balanced wage setting mechanisms. Tight labour market conditions and high inflation have put upward pressure on nominal wages. Nevertheless, at 4.8% in 2022 in the EU, nominal wage growth remained below inflation, causing real wages to fall in almost all Member States, and by 3.7% on average in the EU. 10 However, because of stronger wage growth and moderating inflation, the decline in real wages slowed down in the first half of 2023. Gradually recovering purchasing power and mitigating further losses is essential to contain the social effects of the high costs of living especially on low-wage earners. Developments in profit margins suggest potential room for further increases in wages in some sectors, while remaining vigilant about second-round effects on inflation. In this context, strong social dialogue and effective collective bargaining, in accordance with national practices, is crucial to achieving an overall wage growth that supports purchasing power, notably of low- and middle-wage earners, while supporting job creation and safeguarding competitiveness.
Adequate minimum wages can help protect the purchasing power of low-wage earners and decrease in-work poverty, while strengthening incentives to work. From January 2022 to July 2023, statutory minimum wages increased significantly in nominal terms in all Member States where they are in place, compensating for the impact of high inflation on the purchasing power of minimum-wage earners in half of those Member States. These rises reflected automatic indexation adjustments where such mechanisms are in place, and discretionary updates. In addition, in Member States without a statutory minimum wage, collectively agreed wages for the lowest paid occupations registered subdued growth, leading to substantial losses in real terms. Mitigating the effects of high inflation is particularly important with regard to low-wage earners, who are disproportionately hit by still elevated energy and food prices. The transposition of the Directive on adequate minimum wages 11 will be crucial to help protect the purchasing power of low-wage earners and prevent increases of in-work poverty, while strengthening incentives to work, with social partners playing a key role in its implementation. The Directive also contains provisions to promote collective bargaining and to enhance enforcement and monitoring mechanisms in all Member States.
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Real wages decreased in 2022 and continue falling though at a slower pace |
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Nominal compensation per employee increased by 4.8% in 2022, and by 6% in Q2‑2023 vs Q2-2022 |
Real gross wages and salaries per employee
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