Page 154 - ePaper
P. 154
Employment and Social Developments in Europe 2014
policies developed in synergy with other the portability of social security benefits However, not all workers (especially the
58
policies( ) to support the reallocation (health, pensions). low-skilled) will have the opportunity to
of labour towards these new activities benefit from the opportunities created by
in a secure way and in a way that ben- 4.2. Globalisation creates globalisation (in combination with tech-
efits all employees, especially the low- opportunities but also nological progress). Moreover, increased
skilled. For these workers, adequate challenges for job quality international competition from firms
earnings could be provided in the short and productivity located in countries with lower job quality
to medium run by measures that have standards and low wages may also result
a direct impact on wages (such as the This subsection looks at the potential in increased job insecurity (e.g. due to off-
minimum wage paid by the employer), impact of further globalisation brought shoring, restructuring), poorer worker con -
hiring subsidies (paid by the taxpayer to about by the removal of barriers to free ditions (e.g. in terms of maintenance of
employer) or by social transfers or fis- and fair trade, foreign direct invest- hygiene, occupational health and safety
cal benefits (paid by the taxpayer to the ment (FDI) and migration. These are norms) and cuts in wage and non-wage
employee). expected to create upward and down- labour costs (e.g. severance pay, individ-
ward impacts on job quality which have ual and collective dismissal procedures),
However, since differences in gross earn- a direct impact on labour market partici- especially for workers performing routine
ings are largely driven by differences in pation and productivity, as the following tasks in the production of tradable goods
59
productivity( ), closing the earnings analysis shows. and services. Globalisation may then have
gap through nominal unit labour cost a persistent adverse impact on job quality
increases( ) may be unsustainable for 4.2.1. International trade in these types of activities.
60
companies. In other words, to keep work - may enhance productivity and
ers with excessive labour costs (relative job quality Nevertheless, several policy instruments
to productivity) may be financially unsus - can be used to strengthen upward job
tainable to companies, especially in the Further opening to world markets mobility, including job-searching assis-
face of increased international competi- strengthens countries’ ability to exploit tance, skill formation and portability of
62
tion. Therefore, it is crucial immediately their comparative advantages, thereby social security benefits ( ). Job-searching
to reinforce the incentives and opportu- reinforcing their overall productivity assistance is a relatively effective, low-
nities for skills formation and life-long growth. For example, it is estimated that cost tool for smoothing the reallocation
learning directed at the low skilled and a 1 % increase in the openness of the of labour. However, as the transition to
both inside and outside the job (Euro- economy generates an increase of 0.6 % new knowledge- and technology-inten-
pean Commission, 2010a). These pro- in labour productivity the following year, sive activities poses new challenges,
ductivity-enhancing measures should based on an analysis of EU trade flows awareness of job opportunities and skills
complement the wage/income and other between 1996 and 2005 (e.g. European requirements by workers, employers and
targeted measures towards workers at Commission, 2007c). These increases employment services can be low.
the lowest end of the earnings distribu- in productivity create the potential to
tion (e.g. access to support services, such raise real wages, which is an important Hence, European and National plat-
as child and elderly care). determinant of job quality. In turn, these forms that facilitate the exchange of
increases in earnings may strengthen information between all stakeholders
Anticipating future changes in jobs and workers’ commitment, with further posi- should be strengthened to improve the
associated skill needs will remain a chal - tive impacts on productivity. effectiveness of job-searching struc-
lenge, requiring a stronger collaboration tures. Another policy is to strengthen the
between stakeholders (including employ - Production patterns will change as glo- expertise and capacity of employment
ers, employees, education providers and balisation, in combination with techno- services to be more proactive and to
skills forecasters) and better support logical progress, will allow (large) firms increase their offer of re-training pro-
for job mobility including through better to specialise in core activities and del- grammes and other relevant services.
information flows on job availability and egate much of their non-core activi-
ties to global suppliers so as to reduce In addition to modernising educa-
production costs. For the resource-poor, tion and training systems to meet the
( ) Such as investments in innovation,
58
improvements in the functioning of the skill-rich EU this may imply a shift from emerging demand for new skills, equal
Internal Market and opening up international traditional manufacturing (e.g. agro-food, access to skills formation should be
markets, mobilising public resources and
unlocking private funds, equipping labour steel, textiles) to more knowledge- and ensured to avoid any further polarisa-
force for industrial transformations. See, technology-intensive activities (e.g. high- tion. Despite a strong political commit-
for example, ‘Industrial revolution brings
industry back to Europe’ at http://ec.europa. tech business services, haute couture and ment to life-long learning, only half of
eu/enterprise/initiatives/mission-growth/ design, as well as industrial activities such all European workers underwent training
index_en.htm#h2-4 as computing, biotechnology and nano- in 2010 (Eurofound, 2010). The figures
59
( ) At least if competition and information 61
flows are not distorted too much. Notable technology) ( ). These developments will are particularly low among women,
exceptions are, for example, in ‘winner- strengthen workers’ opportunities to move older workers, lower-skilled workers,
takes-it-all’ games where it is relative (not
absolute) productivity which determines to jobs of higher quality and value added workers in small companies and work-
earnings, as is the case, for example, for (e.g. in terms of earnings or autonomy). ers on temporary contracts.
Olympic athletes or employees in the
financial sector.
60
62
( ) I.e. nominal compensation per employee ( ) Apart from guidelines for Multinational
61
adjusted for productivity, whereby ( ) For example, from 1970–2003, the Enterprises that establish responsible
gross wages are an important part of textile workforce dropped by 60 % in the business conduct wherever they operate, as
compensation per employee. G7 countries (Huwart and Verdier, 2013). is outlined in, for example, OECD (2011a).
152
policies developed in synergy with other the portability of social security benefits However, not all workers (especially the
58
policies( ) to support the reallocation (health, pensions). low-skilled) will have the opportunity to
of labour towards these new activities benefit from the opportunities created by
in a secure way and in a way that ben- 4.2. Globalisation creates globalisation (in combination with tech-
efits all employees, especially the low- opportunities but also nological progress). Moreover, increased
skilled. For these workers, adequate challenges for job quality international competition from firms
earnings could be provided in the short and productivity located in countries with lower job quality
to medium run by measures that have standards and low wages may also result
a direct impact on wages (such as the This subsection looks at the potential in increased job insecurity (e.g. due to off-
minimum wage paid by the employer), impact of further globalisation brought shoring, restructuring), poorer worker con -
hiring subsidies (paid by the taxpayer to about by the removal of barriers to free ditions (e.g. in terms of maintenance of
employer) or by social transfers or fis- and fair trade, foreign direct invest- hygiene, occupational health and safety
cal benefits (paid by the taxpayer to the ment (FDI) and migration. These are norms) and cuts in wage and non-wage
employee). expected to create upward and down- labour costs (e.g. severance pay, individ-
ward impacts on job quality which have ual and collective dismissal procedures),
However, since differences in gross earn- a direct impact on labour market partici- especially for workers performing routine
ings are largely driven by differences in pation and productivity, as the following tasks in the production of tradable goods
59
productivity( ), closing the earnings analysis shows. and services. Globalisation may then have
gap through nominal unit labour cost a persistent adverse impact on job quality
increases( ) may be unsustainable for 4.2.1. International trade in these types of activities.
60
companies. In other words, to keep work - may enhance productivity and
ers with excessive labour costs (relative job quality Nevertheless, several policy instruments
to productivity) may be financially unsus - can be used to strengthen upward job
tainable to companies, especially in the Further opening to world markets mobility, including job-searching assis-
face of increased international competi- strengthens countries’ ability to exploit tance, skill formation and portability of
62
tion. Therefore, it is crucial immediately their comparative advantages, thereby social security benefits ( ). Job-searching
to reinforce the incentives and opportu- reinforcing their overall productivity assistance is a relatively effective, low-
nities for skills formation and life-long growth. For example, it is estimated that cost tool for smoothing the reallocation
learning directed at the low skilled and a 1 % increase in the openness of the of labour. However, as the transition to
both inside and outside the job (Euro- economy generates an increase of 0.6 % new knowledge- and technology-inten-
pean Commission, 2010a). These pro- in labour productivity the following year, sive activities poses new challenges,
ductivity-enhancing measures should based on an analysis of EU trade flows awareness of job opportunities and skills
complement the wage/income and other between 1996 and 2005 (e.g. European requirements by workers, employers and
targeted measures towards workers at Commission, 2007c). These increases employment services can be low.
the lowest end of the earnings distribu- in productivity create the potential to
tion (e.g. access to support services, such raise real wages, which is an important Hence, European and National plat-
as child and elderly care). determinant of job quality. In turn, these forms that facilitate the exchange of
increases in earnings may strengthen information between all stakeholders
Anticipating future changes in jobs and workers’ commitment, with further posi- should be strengthened to improve the
associated skill needs will remain a chal - tive impacts on productivity. effectiveness of job-searching struc-
lenge, requiring a stronger collaboration tures. Another policy is to strengthen the
between stakeholders (including employ - Production patterns will change as glo- expertise and capacity of employment
ers, employees, education providers and balisation, in combination with techno- services to be more proactive and to
skills forecasters) and better support logical progress, will allow (large) firms increase their offer of re-training pro-
for job mobility including through better to specialise in core activities and del- grammes and other relevant services.
information flows on job availability and egate much of their non-core activi-
ties to global suppliers so as to reduce In addition to modernising educa-
production costs. For the resource-poor, tion and training systems to meet the
( ) Such as investments in innovation,
58
improvements in the functioning of the skill-rich EU this may imply a shift from emerging demand for new skills, equal
Internal Market and opening up international traditional manufacturing (e.g. agro-food, access to skills formation should be
markets, mobilising public resources and
unlocking private funds, equipping labour steel, textiles) to more knowledge- and ensured to avoid any further polarisa-
force for industrial transformations. See, technology-intensive activities (e.g. high- tion. Despite a strong political commit-
for example, ‘Industrial revolution brings
industry back to Europe’ at http://ec.europa. tech business services, haute couture and ment to life-long learning, only half of
eu/enterprise/initiatives/mission-growth/ design, as well as industrial activities such all European workers underwent training
index_en.htm#h2-4 as computing, biotechnology and nano- in 2010 (Eurofound, 2010). The figures
59
( ) At least if competition and information 61
flows are not distorted too much. Notable technology) ( ). These developments will are particularly low among women,
exceptions are, for example, in ‘winner- strengthen workers’ opportunities to move older workers, lower-skilled workers,
takes-it-all’ games where it is relative (not
absolute) productivity which determines to jobs of higher quality and value added workers in small companies and work-
earnings, as is the case, for example, for (e.g. in terms of earnings or autonomy). ers on temporary contracts.
Olympic athletes or employees in the
financial sector.
60
62
( ) I.e. nominal compensation per employee ( ) Apart from guidelines for Multinational
61
adjusted for productivity, whereby ( ) For example, from 1970–2003, the Enterprises that establish responsible
gross wages are an important part of textile workforce dropped by 60 % in the business conduct wherever they operate, as
compensation per employee. G7 countries (Huwart and Verdier, 2013). is outlined in, for example, OECD (2011a).
152
