THE PROBLEM OF UNEMPLOYMENT
IN EUROPE AND CYPRUS
By Andreas Pavlikkas
Unemployment has become a way of life for tens of millions of peoples all over the world. For some decades now, this phenomenon continues be one of the must serious problems of the World Economy.
In the European Union the number of unemployed persons in the 25 member countries reaches 20 million or 9% of the manpower.
Until now, no matter which measures have been taken, nobody managed to wipe out unemployment. Even in periods of high rate of development in Europe, unemployment is not reduced but it remains in steady high levels.
The European Union tried at times with various ways to confront unemployment. In 1994 the European Council drew up a report in Essen (Germany) relating to this issue. In this report it was pointed out that unemployment in Europe has precisely a structural character (in other words it can not be confronted simply by accelerating the rate of growth), adopting a programme of targets concerning the education and training and instituting a status of voluntary part-time employment offering incentives of work reorganization systems which will combine the reduction of work time with new engagements etc.
Some of the countries applying these measures reduced unemployment drastically such as Ireland (from 14.3% in 1944 to 4.5% in 2005) and Denmark (from 8.2% to 5.4%).
In the Amsterdam Conference (1997) for the first time a resolution on employment was adopted providing among other that “the social protection systems must be streamlined so that their operation becomes stronger thus contributing to the competitiveness, employment and development creating a stable base for social cohesion”. Furthermore the report pointed out that “emphasis should be given to the effectiveness of the labour market and products, to technological innovation and to the dynamic creation of new work positions by the small and medium enterprises”.
Then, since there pledges in practice could not confront radically the problem of unemployment, in March 2000 during the Conference of the European Council in Lisbon the leaders of the member – countries of the European Union (E.U.) committed to materializing specific economic and social targets constituting the economy of the E.U. the most dynamic and competitive in the world by year 2010.
The strategy of Lisbon, as it has since then become known, concerns the promotion of a mass of economic, social and institutional reforms in the member – countries of E.U. targeting in the creation of those conditions which will allow th E.U. to become the first economic power by year 2010.
The main element in this Strategy was the increase of the rate of growth and, in consequence of the increase of employment.
To this effect the following quantitative targets have been approved:
To reach 67% in 2005 and as close as possıble to 70% in 2010.
Employment of Women
To reach 57% in 2005 and over 60% in 2010.
Between 55 and 64 years of age to reach 50% in 2010.
- To every unemployed young person be offerred the possibility of a new start before the lapse of 6 months unemployment and 12 months for adults (new start could be training, retraining or placement in vacant posts).
- Until 2010, the 25% of the long term unemplpoyed to participate in a relevant programme.
Education and for life learning
- Until 2010at least 85% of the persons over the age of 22 in the E.U. should have completed the higher level of the tertiary education.
- Until 2010 the average level of participation in the life learning should at least be 12.5% of the adult economically active population (25-16 years of age).
Extension of the Occupational life
- Until 2010 extension by 5 years of the real retirement age from the labour market (in 2001 this age was 59.9 years).
- Abolition of the incentives for retirement from the labour market mainly with reform of the systems for premature pension.
In order to achieve a beter combination of occupational and private life it must until 2010, be offerred care services for children to:
- At least 90% of children from the age of 3 until the starting time of the obligatory education and at least to 33% of the children under 5 years of age.
- At least 33% of children under the age of 3.
Examining the Lisbon strategy, its targets and objectives we consider that it lacks social element, as well as targets that will constitute which Europe a more human, fair and more open to its citizens.
We believe that the social cohesion should have constituted the basic keystone of the Lisbon Strategy and not the outcome of achieving economic targets.
Specifically we stress that the word “flexibility” is continuously repeated within the texts of the Lisbon Strategy in relation is interpreted as deregulation of work, as an undermine of the role of collective agreements, and as an application of such forms of employment that will reduce the cost of labour for employers and increase the exploitation of employees.
UNEMPLOYMENT IN CYPRUS
According to the official data of the Statistics Department the percentage of unemployment has risen to 3.7% of the manpower in year 2006. On fact on the basis of the survey of the manpower in Cyprus and according to the methodology of the European Union the percentage of unemployment is 5.5%of the manpower.
Due to the fact that there is a confusion among the people in relation to the unemployment data, we must say that on the basis of the criteria of the International Labour Office (which have been adopted by the European Union) a person is considered as unemployed if:
- he is not working
- he is seeking employment, i.e. he has, in the previous four (4) weeks, taken specific steps to find employment, and
- he is available to take up employment within two weeks.
The official data which traditionally are published, concern only the unemployed persons registered the Employment Exchanges.
According to the methodology of the European Union the data collected through a sampling survey concern, apart from the registered unemployed, the unemployed who for various reasons fail to register at the Employment Exchanges.
The majority of the unemployed of this category are women and young persons mainly under 40 years who have not worked previously and who are interested only for part-time employment.
There is also a second group of persons, which does not satisfy the unemployment criteria. This group includes persons of advanced age over 55 years who retire and register as unemployed.
The unemployment data used for comparison with the European unemployment are these of the methodology of the European Union.
We append here below the table of unemployment with the two methods of calculation.
Percentage of Unemployment calculated on the two methods.
Methodology of E.U.
Whichever data one may use as reference point, he will ascertain that unemployment is knocking our door and that 14000 compatriots or the 20.000 persons according to the E.U. methodology, are unemployed and we must find out the causes of unemployment and how we will manage to face it. The reply of the Ministry of Finance that we are still favorably compared with the unemployment rates in the European Union does not meet our expectations.
Our accession to the European Union (E.U.) brought with it the vertical increase of the community workers who, as citizens of the E.U., can freely move and work in any member country. The total number of foreigners working in Cyprus is over 50,000 or about 15% of the manpower against 7% in the year 1998. The number of communal persons engaged in Cyprus after 1/5/2004 amounts to 10,237. it is a fact that in many cases the communal employees occupy new positions of work, resulting in negatively affecting of Cypriot employees.
To this effect we believe that the discussion between the social partners on the new strategy of employment of foreigners should be accelerated and finalized soon so that the influx of foreign workers is contained and the communal workers are protected from the exploitation they face on their terms of work (a fact affecting the wages and the employment of the Cypriot workers).
The wiping out of the unlawful employment constitutes another parameter, which could help in the confrontation of unemployment.
The responsibility rests on the shoulders of the various Government Departments, which should act effectively towards this direction.
Furthermore, the National Employment Committee must materialize the decisions taken on the establishment of District Labour Office, which will not only register the unemployed but also create training programs in sectors where there is demand.
We have occasionally suggested additional measures for the confrontation of unemployment. We could first point out that the steady development policy, the increase of productivity, the confrontation of the structural problems mainly in the industry, will contribute to the containment of unemployment.
To this effect the following measures should be promoted:
- Immediate creation of the necessary infrastructure and the mechanisms, which will utilize the programs and initiatives of the European Union, to, which Cyprus can participate. These initiatives are targeted towards the development of manpower, in the creation of new enterprises and in the reinforcement of the small and medium enterprises, so that they became able to create new employment positions and assimilate the new unemployed persons and particularly the graduates of tertiary education.
- Promotion and materialization of the institution for life training, by rendering the necessary incentives, and the creation of the proper infrastructure.
- Taking a series of measures and creating pioneer incentives so that the Cypriot enterprises be ware of the immediate necessity of the investment on their human resource and acquire the mentality and culture of the “Learning Organization”.
- Encouragement, stimulation and assistance in the export of services by Cypriot experts as a centre of provision of services.
- The vocational Guidance and the occupational education of young persons must be upgraded and take its proper dimensions, as a useful and decisive institution in the information and occupational selection of young people Greater link of the educational system is required with the needs of the economy.
27 February 2007