Social protection: making work pay

Key Points:

The Committee calls for convergence in European Member States efforts to make work pay by making employment truly an economically attractive option to unemployment or welfare by targeting the full range of barriers to paid work. The key issue facing member states in making work pay is to design a common and reasonable level of in and out of employment supports which maintain people’s incentives for labour market attachment. The Committee has distinguished between the contributions of quick-gain policies to provide short but terminal benefits for the low-skilled, and the more long-term human capital investments which are the key to making work pay, especially for those most vulnerable, in the sustainable long term.

The Committee highlights the substantial scope for the contribution of private firms and employers in meeting European employment objectives. Effort should be made to identify feasible demand policies that target changing employer behaviour in ways that promote the achievement of Lisbon objectives of more quality, sustainable employment throughout Europe.

In addition to supporting good practice, sanctions on inappropriate employer behaviour including discrimination on the basis of gender, race, sexual orientation, religion or age must be enforced to support innovation, increased labour supply and the possibility of having longer working lives in European economies.

A range of instruments and benefit schemes need to be applied in Member States backed by strong national coordination which balances labour supply and demand instruments. The combined household effects of benefits or tax levels on income must be carefully balanced and anticipated, paying particular attention to the incentive structures these create for poor households. Other measures such as the provision of childcare, flexible working times, job security, job mobility and training opportunities have been highlighted as essential to a comprehensive policy framework for making work pay.