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Employment in EU: permanent or temporary jobs?

The European Commission published recently its Winter Package on the economy with an assessment of progress on structural reforms and macroeconomic imbalances in the Member States. However, recent statistics published by different bodies of the Commission shows a complex picture as regards the nature of new jobs created in the EU.

The Commission announced (22 February) that employment in the EU has reached 232.5 million people in 2016, “the highest number ever measured”. The unemployment rate has fallen but is still 8.5 % and in some countries much higher. The Brussels Times mentioned in an earlier article on the Winter Forecast that half of the new jobs since 2010 have been through temporary contracts.

The figure was taken from an article in The New Times on the difficulties young people face when looking for jobs. Despite their education and experience they are offered low-paid temporary jobs. The New York Times referred to a report from 2015 by the European Foundation for the Improvement of Living and Working Conditions (Eurofound), an EU agency located in Dublin.

However, according to The Employment and Social Developments Quarterly Review, a paper published by the Commission’s Directorate-General for Employment, Social Affairs and Inclusion, the increase in the number of permanent employees has exceeded the increase in the number of temporary employees for nearly three years now.

“In the year to the third quarter of 2016, the number of employees with a permanent contract increased by 2.8 million (1.8%), while the number of employees with a temporary contract increased by 420 thousand (1.6%),” according to the European Commission. “In addition, this evolution has been one of the most important factors leading to recovery in most Member States.”

Temporary employees account for nearly 15% of total employees in the EU, which has been a stable share.

The Brussels Times contacted both the Commission and Eurofound to clarify the seemingly contradictory figures. Both of them agreed that The New York Times had misquoted the figures in Eurofound’s report. Its report referred to the period 2010 – 2012 and not to “since 2010”:

“Against a background of poor economic prospects, employers are recruiting a much higher proportion of new employees on temporary contracts in the EU (up to 50% between 2010 and 2012 compared with 40% in 2002). In 2012, this share was around 80% in Spain and Poland,” writes Eurofund. Figure for later years are not available.

Has the trend suddenly changed since 2012 and resulted in a much higher proportion of permanent contracts among new jobs? Not necessarily according to Eurofound. A research officer at Eurofound explained to The Brussels Times that both pieces of information are complementary but describe different though related realities.

“We measure different things. The Commission has measured the level of new jobs at a certain point of time while we are measuring the flow of new jobs during a period of time.”

Eurofound’s data shows that the share of temporary contracts among short-tenured employees (i.e those whose jobs were created within the last 12 months) was around 50% in the period 2009 – 2012.

It could be the case that permanent employment levels are growing more than temporary employment levels, but still more temporary contracts are being created, and disappearing after a short period, depending on the financial crisis and the economic cycle. This is not captured in the stock figures on new jobs.

This being said, the Commission’s spokesperson tells The Brussels Times that “precariousness of work is a concern in several Member States, and we need to step up efforts to make sure we preserve our social models and standards.” 

An opportunity to do this will be when the Commission will present the “European Pillar of Social Rights” this Spring, aiming at “aligning the social models in EU with the dynamics and challenges of today’s labour market, such as digitalisation, globalisation and ageing”.

M. Apelblat

The Brussels Times