Implications of the European Union Labour Market Policies

This paper discusses the various implications of the European Union labour market policies on the member states. It delves into why these member states are concerned with these policies and how the policies influence the state’s strategic decision making in relation to their economies. This discussion also relates to the Flexicurity concept which promotes the notion of striking the right balance between flexibility in employment arrangements and workers security on labour markets. By examining this concept as viewed in the European Union, it offers an analysis of the situation of the policies among the member states. A description of diffusion and impacts of these policies will be done to show how they raise a concern among the member states especially when they are aimed at fostering entrepreneurship. Writers who offer coursework assistance at Edudorm essay writing service notes that by looking into the effort to implement the Flexicurity policies, the various challenges that are experienced especially between the employer and employees will be highlighted, which is also another factor which raises concern among the member states. Of great importance is the economic implication of these policies on the European member states given that labor markets performance is usually an aspect of the health of member states’ economies. The labour markets play a role in economic performance and the social models that characterize a large number of these countries. In addition, apart from the government institutions, the corporatist structure involves essential context factors in the implementation of labour market policies. In order to have a better understanding of these issues, a review of the Denmark case will be done since this country can be referred as Flexicurity case due to its implementation model.

Significance of European Labour Market Policies

The European Union labour market policies have triggered developments in the economic, demographic and socio-ecological aspects of its member states and have led to numerous markets reforms. These policies have determined how these countries will organize their labour markets, one of the major components in the public policy. The policies involve the various interventions on the labour markets that need to be adopted or have already been adopted in the midst of major changes in the economies such as immigration and high rates of unemployment, especially among the youthful population (Hilbert, 2008, 93). The concern by the members’ states has been determined by how the European Union policies have influenced the member states in their efforts targeting the groups of citizens experiencing hardship in the labour market. The flexibility concept has been a major cause of concern in relation to the various strategies adopted by various countries in this region. The concept is integrated into the employment strategy across the European Union market whose aim has been to increase employment while at the same time reducing unemployment (Arndt & Hörisc, 2015, 4). Experts who do my coursework at Edudorm essay writing service indicates that this has been considered an important way of enhancing social cohesion and economic growth among member states, given that more flexibility in the labour markets would raise the competitiveness of the region. This would be attained through reduced costs for companies to put in place adjustments in line with dynamics of an international economy that is highly integrated. Where there is an increase in labour participation, there is an improved income security which translates into more social inclusion. The European Union countries, therefore, intends to overcome tensions that may exist between labour market flexibility and at the same time provide worker’s social security. For these countries, labour markets that are flexible are seen as important in job creation more so in the times of recovery after economic recession that hit the region, and can also relate to the reduction in the economic security (Arndt & Hörisc, 2015, 9).

Implementation of the Policies

Another point of concern is the efforts involved in the implementation of the various labour market policies among the European member states, which has to be integrated into the country’s labour market policies. In policy reforms instituted by member countries, there has to be the interaction between various labour markets instruments. A single instrument relating to the labour-market policy is ingrained in many welfare state institutions. A reform proposal in any country will involve various policies instead of just one policy on the labour market, and such reforms are expected to endure any opposition from workers in the process of reforming the labour market. The labour market policies agreed upon by European Union member states have to be followed even in their efforts to change the local labour laws (Koster, McQueen, Siedschlag & VLIET, 2011, 3). This is where policy integration comes in, where wide consolidation between the two set of laws has to adhere to the spirit of the agreements. This in the consideration that labour market policies cover the measures put in place for dealing with unemployed groups including training, job rotation and sharing, various incentives for employment and direct job creation. Tutors who allow students to buy coursework online at Edudorm essay writing service acknowledges that any efforts aimed at handling cases have to be integrated into the local policies instituted by the respective member countries, making the labour market policies very essential. The issue of these policies extends to the corporatism where firms have a great contribution when it comes to the implementation of any labour laws. In this case, there are two forces of labour which include the insiders and the outsiders. Insiders involve those incumbent employees with a set of privileges while outsiders are those employees whose contracts have fixed terms and are not under labour union representation. The European Union member states have to encounter the labour unions that are bound to represent the insiders while at the same time supporting the various social policies (Koster, McQueen, Siedschlag & VLIET, 2011, 4). The states have to contend with the labour unions whose presence is fully recognized in the labour market policies.

Another aspect making the labour market policies to be of concern to various states forming the European Union is the implementation process, given that Flexicurity as a major concept in the labour market which has been adopted and promoted by the European Commission. Among the strategies by the European labour market policies is the effort to strike a balance between security and flexibility, which has the potential to positively influence companies’ competitiveness, facilitate quality enhancement and productivity and ensure the adjustment of employees and employers to various emerging economic changes(Arndt & Hörisc, 2015, 5). It is in the interest of any member countries to adopt labour market laws or policies which will have a positive impact on the growth of their economies and hence, such policies become very important to them. Such impacts on economies can be felt in the case of adoption of various pathways derived from these labour market policies. These includes reliable and flexible arrangement on contracts between the employers and employees and the long-term learning strategies that deal with challenges relating to fast technological development, so as to sustain firms productivity hence competitiveness, and workers employability in the long-term(Arndt & Hörisc, 2015, 5). Others include employment policies that are effective and active to enhance the switch to employment and the improvement of job matching efficiency, and the social security schemes that offer enough employment benefits which function as a safety net at the time of job changes. Countries would consider the need for getting involved in the execution of Flexicurity strategy. Furthermore, various pressures have led to the integration of labour markets as a result of shifting factors of production in countries with an aim of readjusting to the integration of trade.

How Immigration Affect Labour Market Policies

 There is also the issue of immigrants, depicting the movement of workers among various national labour markets. The right to move and work in another member country is guaranteed by the Charter of Movement Rights and Court of Justice’s jurisprudence. There is also the transferability of various social security rights, for the European citizen which means that member states have to allow for such arrangement in their local policies (Delivet, 2014, 2). However, these countries have to determine whether to support such kind of integration which is enhanced by the integration of the regional markets. Other cause of concerns for such integration involves the impact it would have on the economy in case of unexpected changes such as financial crisis (Delivet, 2014, 3). Authors who write my coursework at Edudorm essay writing service points that, in addition, the free movement which developed in association with internal market development has been shown to benefit the big firms or corporations while worsening the working conditions and thereby bringing insignificant benefits to the underprivileged in the society. This forms a major concern for various states that may feel the labour market policies as failing to address the needs of the citizens but benefiting those who are already privileged.

Denmark was among the states that first embraced the idea of Flexicurity, where flexible policies on labour market were adopted with liberal and good unemployment benefits. The country received a substantial international recognition the decade before financial crises due to the implementation of this strategy. The reforms involved a four-year unemployment benefit with a replacement rate whose maximum reached 90 percent. The country’s strategy was termed a “Golden Triangle” by local labour market experts and international organizations and observers. It involved three significant reforms on labour market which were adopted by social-liberal-social democratic government and supported through a range of agreements between workers union and employer association (Arndt & Hörisc, 2015, 5). The result was a big reduction in the employment rates and the structural unemployment which was a major problem in the early 1990’s. There were some interesting traits which were characterized by more liberal economies of the market. The development of a labour market and the welfare state was deemed the successful hybrid between the best social security by Scandinavian welfare systems and liberal welfare states having labour markets that were very flexible. There was a great reconciliation of free market economy’s dynamic forces with the social security of these states.   The success of this strategy in the Denmark labour markets was seen as the best example which could be adopted by the other states in the European Union. The Flexicurity idea was, therefore, seen as a good functioning relationship seen in high unemployment levels, low protection of jobs, and a labour market that is flexible and active policies on the labour market (Madsen, 2013, 1).

However, after the 2008 financial crises, the country fell into a recession like many other European countries. After the country GDP fell by 8 % each quarter, there was a deep decline in employment levels, with 7.7 %. From being a country with one of the lowest unemployment levels in among the European Union states, it moved near to the middle of the rank. Debate raged about the ability such a model of the labour market to withstand external shocks in times of crises. Therefore, a high level of external flexibility of the country’s labour market can result in volatile changes in employment and unemployment over a normal business cycle. Due to the unforeseen changes, there has been a decline in the country’s union membership and collective bargaining just as the rest of the European countries (Madsen, 2013, 1). The result has been a union density being relatively high among the migrants from countries outside Europe, part-time and fixed-term workers, freelancers and older workers. Many of these makeup workers groups working in various sectors such as banking, manufacturing and the public sector where there are more collective agreements on the coverage rate. However, this case does not apply for most freelancers or non-west migrants and this result to various groups of employees being involuntary outsiders in terms of the country’s bargaining model. In addition groups of workers in the informal labour market who are not part of any union also end up being led behind (Larsen, 2012, 1). This represents a very arguable case of the European member countries being highly concerned with the various labour market policies that they should integrate into their labour laws.

References

HILBERT, C. A. (2008). Unemployment, wages, and the impact of active labour market policies in a regional perspective. Berlin, Logos.92-94

Koster,F., McQueen, J. Siedschlag, I., VLIET, O.V. (2011).1-5 Labour Market Models in the EU

Arndt,C., Hörisc,F.(2015). Flexicurity policies in Europe –Diffusion and Effects of Flexicurity labour market policies. 3-9

Larsen, T., P. (2012). Workers increasingly excluded from bargaining model.1.

Delivet, P. (2014). The Free Movement of People in the European Union: principle, stakes and challenges. 2-3.

Madsen, K. (2013). “Shelter from the storm?” – Danish Flexicurity and the crisis. Journal of European Labor Studies. Vol.2:6.1.