Ms Barbara Gerstenberger:

I thank the Chairman and the joint committee for inviting us to share some of our thoughts and reflections on the Europe 2020 strategy in connection with the mid-term review. Eurofound is a tripartite European agency financed from the European budget. We provide knowledge to assist in the development of social and work related policies. We are not directly involved in policy-making. We provide evidence from comparative research to support better informed policies.

I will start with a general and political statement. European integration is under threat because many European citizens today see Europe as part of the problem and not the solution. Deteriorating living standards, growing inequalities within and between member states, which Councillor Sheehan mentioned, competition in a Single Market which is not always regarded as fair, and the mobility of workers which is seen as an attack on national welfare systems and not as a right to be cherished and exercised are just some of the key issues in the public debate. A strategy which ignores these facts cannot be successful.

I will comment on some elements of the Europe 2020 strategy, the current targets, adapting to a post-crisis strategy and the new challenges which need to be addressed. There seems to be consensus, and it is the view of Eurofound, that the targets are relevant for measuring progress towards the strategy's objectives of fostering growth and jobs. It is very important, however, to complement these rather numerical targets with additional indicators which have a more qualitative dimension. I will illustrate what I mean with the employment target.

To have at least 75% of people between the ages of 20 and 64 in employment requires good quality jobs. According to our research, 20% of jobs in Europe today are poor quality jobs which are badly paid, provide few prospects and score very low when it comes to physical and social work environment and quality of work intensity. These jobs are associated, therefore, with poor health outcomes and low levels of well-being of the jobholder. That is a clear indiction for early exit from the labour market being quite probable. Not only is it difficult to keep those in poor quality jobs in employment longer, which is what we need to do if we want to reach the 75% target, low quality jobs are also unlikely to be suitable or attractive to many people who are unemployed or inactive.

Many of those who could participate, and who need to participate if we want to move from the current employment level of 68% to 75%, do not do so because the characteristics of the jobs which are available do not match their level of availability in terms of care responsibilities, qualifications, mobility and health issues. Improving job quality is, therefore, a prerequisite for reaching the EU 2020 employment target and ensuring employment levels stay at the envisaged high level. We need job quality indicators which could be introduced as part of the joint assessment framework or the social scoreboard to help monitor progress in that respect.

Increasing the sustainability of work over a lifetime is one of the key challenges that needs to be addressed in the post-crisis growth strategy. With low quality jobs not likely to disappear from one day to the next, we need to think about ways to compensate for the negative effects and think more about transitions between jobs making career paths towards higher quality jobs possible, between education and the labour market and between periods of inactivity or unemployment and participation.

Both parts of the education target are relevant. This is confirmed by data we have on shifts in employment from the European jobs monitor which clearly shows growth in jobs which need the highest level of education for the jobholder. The current target, however, can do little to monitor whether the skills obtained actually match the requirements of the labour market. Our European company survey points to a skills gap which is detrimental to growth and jobs and that may not necessarily be closed by increasing the number of people holding third level diplomas, which is the target. In a survey we conducted in 2013, almost 40% of European companies reported difficulties in finding employees with the required skills, in the face of high unemployment rates.

That points clearly to a qualitative assessment. Are the skills that young people acquire through third level education the skills the labour market needs?
The second part of the target is to reduce school drop-out rates to below 10%. That points to the most important strategic, long-term issue for Europe, that is, the welfare of children and ensuring their future productivity as adults. Europe's economic success depends on it. Achieving real social inclusion depends on it. Living up to the responsibility a society has vis-à-visits children depends on it, and therefore we would argue that in the review and the post-crisis strategy, investment in early childhood education and care, and tackling educational disadvantage, is one of the key goals that must be pursued.
On the adequacy of the poverty target, it is an achievement in itself to have a poverty target in the strategy. However, the at risk of poverty and exclusion indicator is complex and multidimensional but it does not provide direct evidence of the experience of social exclusion. In the European quality of life survey, we ask about perceived social exclusion and how people feel integrated in society. In doing that we get important information on the reason people feel excluded, whether the situation has improved or worsened, and the groups that are particularly affected. We need a better understanding of the reasons for social exclusion in order to design better targeted, personalised approaches.
Targeting income and poverty, and inclusion through employment, is important but in our outlook on future challenges we suggest that we must also consider what we like to call a plan B, namely, inclusion through other means than employment, for example, through involvement in civil society and social engagement.
I think I have exhausted my time. The members have our input and I am happy to answer any questions they may want to ask.