:: Problems of the European Employment Strategy ::

This text review is based on a John Grahl paper. Grahl does a critical analysis on the EES, and furthermore, provides some grasps of what role it should play, what modifications on its recommendations and on the language used in its guidelines should be done. In order to achieve policies according to the history and tradition of the European Model of Welfare State.

:: Origins and Development of the EES

EES is the European Union’s foremost device that supervises the course of the employment policy and ensures compatibility among the Member States with respect labour market concerns. The EES operates with a system denominated: “Open Method of Co-ordination”. This is a cyclical co-ordination mechanism, which consists on delegating the responsibility of designing and deploying policies to national member states authorities. But, correspondingly, each year the EES makes an individual evaluation at an E.U level and formulate the NAPs -National Action Plans-, outlining its “recommendations for improvements”.
The author’s common denominator focus of critics principally are three. One of those points is the intention of the EES of imposing one unique orthodox perspective to a zone comprised of different social, traditional and economic realities of the European Welfare State Model.
Apart from that, the ambiguous language utilised in the guidelines to provide its “recommendations” and its marked “neoliberal”1 influence, are another controversial issue for Grahl.
The first, is obviously judged for leaving the door open to differing misinterpretations.
The second, corresponds to the adverse comments against the NAIRU doctrine, which address itself to to find the unemployment rate that does not produce an acceleration of the inflation rate. From this outlook, chronic unemployment is considered as a subject of labour supply, not as something regarding demand for good and services. As a consequence, economic measures inspired by this theoretical stream, put the accent on initiatives to enhance labour market participation, rather than on heighten its quality, what is most known as labour market “flexibility”. Indeed, the potential progress upon this ideology depends on the diminishing of the regulations associated to the labour market, and to those schemes intended to make the job-seekers more suitable to the employer’s needs.
In reference to its main competencies, the EES sets the targets for the different variables playing a part in the labour market, both at an individual and a communitarian level.
As it was said before, the author criticises the emphasis on the “active employment measures”, specifically the narrow perspective of the recommendations and strategies, centring fundamentally on the target employment rates established and on the impact of social protection regimes on employment. Therefore, all its efforts are conducted to impose deregulatory policies. Nevertheless, at the same time important questions such as quality of working-life, job security and dialogue among interested social representatives are left aside.

The first stage of the EES strategy had four fundamental pillars: employability, enterprise, adaptability and gender equality. Excepting the last one, the author identifies the first three with the “flexibility objective”.

The “active employment measures” are subject of controversy because it has at the same time two antagonist approximations of the individual and his well-being. One comes from the Nordic countrie’s view of the Welfare State, with a strong sense of interventionism in favour of the unemployed and disadvantaged. Which indeed has distributive notions and follows the aim of broaden the subject’s opportunities.
On the other hand, the perspective of “workfare”, which implies disassembling the institutions traditionally representative of the welfare programmes, decreasing social protection and labour standards, this may include constraining the unemployment benefits over certain sub-groups such as single parents or families with dependent children and relaxing regulation on dismissals among others. The idea behind is that reducing the employer’s risk of hiring would generate a positive effect on “activation”. Despite the assumptions on which this theory backs on, this kind of “activating” policies, have been proved to cause employment to be more unstable, in stead of stimulating participation.

Furthermore, its accentuation on the work experience or training programmes and the social discipline that tries to inflict, may lead people to take a job they would have previously rejected, what it could bring additionally inefficiencies.

Not only that, but also this measures contradict the values and traditions of the European Social Models. Grahl indicates that the EES’s guidelines set undifferentiated “targets” with respect what percentage of unemployed persons should become “active”, but do not state how these “objectives” should be achieved.
In other words, he sees compulsive to change the philosophy from which the “recommendations” and strategies are build and pass from the actual “Labour Market Strategy” to a “Long Term Employment”.

:: A new Direction for the EES

Notwithstanding, in 2002, the EES has submitted into a deep phase of reconsidering its operative methods, what as a result has introduced changes in the design and settlement of objectives. According to this trend, on an attempt to give a more balanced perspective of the employment policy reform, the four pillar based scheme was replaced by ten principles. This changes may be illustrated through the lessening in the number of recommendations and the reshaping of the quantitative targets.
Grahl also recognises some positive signs of this changes in the recommendations to the British governments, which appealed not only to emphasise on the social dialogue, but also to pay attention to the low wages and low productivity levels characteristic of the new jobs of the British economy.
In the overall this connects with the idea of the author of “legitimating” and “democratising” the EES procedures. This mainly consist on stressing the social dialogue, giving the opportunity to different social actors of getting involved in the implementation of labour market policies. And on enhancing quality of working circumstances.
Regardless this symptoms of progresses, the author alerts that NAIRU defenders have found a new approach to back up the same policies. In spite of this days, this doctrine has lost much of its strengths2. Some of its instruments are being recycled for instance as necessary adjustments to a globalise economy, which sets a landscape of new cost-saving technologies and the incorporation to the international labour market of “low qualified labour”(coming from countries with a comparative advantage in it).
This paradigm has yielded as a result, into more pronounced wage differentials and a reduction of minimum employment standards.
Despite of this grounds, the author finds this justifications highly arguable. His idea is that attributing new logic to previous existing unsuccessful policies, do not leave place to a real reformulation of its basis.
Contrary to NAIRU defenders, he considers globalisation as a phenomenon with macroeconomics implications, but mostly associated with demand rather than with supply of inputs. Actually, he claims that there is not empirical evidence that wider wage differentials are related to better employment outcomes.
Therefore, as a result of his critical analysis he devises several suggestions mainly related to procedures and contents.
With respect the last one, following his priors arguments, he asserts that allowing regressive or in-egalitarian interpretations of the EES’s objectives should be removed. That would be feasible only by replacing ambiguous language, and making a more explicit the engagement to high labour standards and advanced social policies.

With reference to procedures, he proposes to take advantage of the experience of those countries which possess a more developed Welfare Models (where labour market policies are deeply assessed upon their individual and social impact), what he denominates “creative emulation”, enabling them to have a bigger influence on the outline of policies.
In order to attain this, it becomes a crucial issue consistency between EU economic and social strategies. The author remarks that until now labour market policies have been in service of negative and regressive doctrines. It becomes obvious that unless there exists coherence, it would not be possible the effective implementation of any policy.
In the same line of speach, he suggests that the EES objectives should be expressed in terms of unemployment reduction instead of employment growth. Even though the targets for keeping low unemployment rates should remain. He also points out that there are several situations in which people may not participate in labour market, such as social, cultural, work-life balance and structural reasons. If this considerations keep unattended, it would be logical to understand that labour market policies are insufficient by themselves to achieve significant outcomes on diminishing unemployment.
The previous reasoning drive us to take as imperative providing incentives to people to choose rationally to participate in the labour market by widening employment opportunities. For instance by deploying efficient rehabilitation programmes not only with the aim of reinsertion, but also by including continuous qualification. In other words promoting life-long learning. Therefore, the objective should be to improve circumstances of the individuals and not to force them to take the first job available.
Reinforcing the subject of “legitimacy”, Grahl gives priority to the participation of social actors as it was said before: “Social Partnership in service of Social Dialogue”. Nonetheless, to achieve that it is mandatory to ensure efficient organisation of workers representation. This clearly aims to involve workers in the appliance of the labour market policies, and in the meantime to increase the probability of attaining coherence between the quantitative targets and work quality.