Cutting red tape to create jobs: a competitive and inclusive labour market

How can Europe create more jobs while strengthening social inclusion? In its latest opinion on the Employment Guidelines for the Member States, the EESC argues that competitiveness and social progress must go hand in hand. The opinion supports measures to improve skills, lifelong learning and labour market participation, while also stressing the need to reduce unnecessary administrative burdens on businesses. 

The opinion places a strong emphasis on reducing administrative burdens. The EESC clarifies that simplification is not an end in itself: by freeing up business leaders’ time, it allow them to focus on economic growth and job creation. For the first time, this clarification captures the dual aim of “cutting administrative burdens to unlock job creation”. A message that Europe’s 10.5 million SME entrepreneurs will strongly welcome.

In this context, the proposal to shift taxation away from labour towards other sources and the call on the Member States to continue their tax reforms while assessing the distributional fairness of their policies is welcome.

The opinion also recognises the important contribution of social economy enterprises and organisations and calls on the Member States to integrate them more effectively into employment and labour market policies. It also emphasises the integration of the long-term unemployed, young people and people who are furthest from the labour market.

On skills, the EESC reaffirms the right to lifelong learning and recalls the target of 60% of European adults taking part in training every year, compared with the current rate of less than 40%. While respecting national competences, the opinion calls for effective measures to attract and retain education professionals.

In addition, we call for the transposition and implementation of the Pay Transparency Directive, which are delayed in a very large number of Member States. Social partners must be more closely involved and stresses the need to take account of the administrative impact on businesses. For the Employers' Group, these reforms must not become weapons of mass deterrence against job creation. New administrative requirements, the constant need to justify a company’s social policy, and the sharply increased risk of litigation strongly discourage entrepreneurs from growing their businesses.

The Member States are urged to do more to prevent undeclared work and abusive employment practices by enforcing the applicable rules, in order to prevent unfair competition and create a level playing field for businesses.

On AI, the opinion addresses the effective, responsible, inclusive and ethical use of AI at work, while ensuring respect for social rights. It also highlights the risks associated with the digital divide and calls for proactive action through education systems.

On pensions, while supporting longer working lives by making the most of opportunities to provide good-quality working conditions, the EESC states that the role of supplementary pensions should be examined in line with national practices and the diversity of national pension systems.

From skills and lifelong learning to AI, fair competition and better regulation, the opinion addresses many of the challenges facing Europe's labour market. Its central message is simple: Europe needs policies that enable people and businesses to thrive. Creating the right conditions for enterprises to grow, invest and hire is not only good for competitiveness - it is also essential for social progress.

By Jean Michel Pottier, Member of the EESC Employers’ Group and member of the study group for opinion SOC/877 Employment guidelines.