At a European Economic and Social Committee (EESC)/Labour Market Observatory conference on tackling long-term unemployment, on 28 February in Brussels, Cedefop Deputy Director Mara Brugia presented the agency’s latest study on the economic and social cost of low-skilled adults in the EU.
Ms Brugia referred to Cedefop’s long tradition of cooperating with the EESC, stressing that it was, in fact, this Committee that proposed the setting up of a European Centre dealing with vocational education and training (VET).
She then said that the number of the low-qualified unemployed doubled in the period of the crisis (2008-14), adding that they are less likely to find a job again, not least because they used to work in sectors that were hit hard by the crisis, and that, whether they are in a job or not, low-qualified people are the least likely to participate in training. They are also likely to disengage and risk being socially excluded.
Ms Brugia argued that ‘Europe simply cannot afford to leave citizens behind, but needs to empower them and make the best use of their potential.’
‘The last few years,’ she went on, ‘young people have been the main priority, and rightly so; as part of the New skills agenda for Europe, the Recommendation on Upskilling pathways: new opportunities for adults aims to ensure that every European acquires a minimum level of skills to realise fully his/her talent and potential.’
According to Ms Brugia, to date, the analysis of low-skilled has had a rather narrow focus. It has been primarily conducted using the level of educational attainment or the level of jobs they are in.
However, this definition is widely recognised as oversimplifying. Being low skilled may also result from:
- long-term unemployment, no matter the actual level of qualifications acquired;
- skills that have become obsolete;
- being trapped in mismatched jobs;
- socio-economic factors such as migrant background or gender.
At the same time, people who are formally low-qualified may have acquired higher skill levels through work, training or volunteer work.
Ms Brugia noted: ‘Upskilling and/or reskilling low-skilled adults is associated with large social and economic benefits not only for the individuals and their families, but also for our economies and societies. In our study we therefore attempt to estimate the economic and social costs of low skills; or the individual and social monetary benefits that increased efforts to raise skills levels in the EU-28 would bring about.’
The Cedefop Deputy Director provided figures that support the argument for reducing the number of the low-skilled:
- The total aggregated economic net benefits for all individual agents (individuals/families, enterprises, public sector) of reducing the share of low-skilled adults over the next 10 years is around EUR 2 000 billion. Half of this amount accounts for health and crime economic benefits.
- In the long term (2025-50), reducing the share of low-skilled adults would lead to an increase in the yearly GDP of over EUR 200 billion.
- The underlying assumption in our scenario is that in 10 years the share of low-skilled adults would decrease by about half compared to the current trend as estimated by Cedefop’s forecast (14.7%), and reach 7.4% by 2025. This is not impossible if we consider that in several Member States the share of low-skilled adults is already 10%.
In conclusion, Ms Brugia called for macroeconomic policies to be combined with activation and VET ones.
Cedefop will hold two policy learning forums this year to support Member States in these challenges. The first, in June, will discuss activation and skills matching policies that help integrate long-term unemployed more quickly into sustainable jobs.
The second, in November, will focus on low-skilled workers, and Ms Brugia proposed that it be organised jointly with the EESC ‘as a pilot exercise hopefully leading to more structured cooperation between Cedefop and the EESC on how to support closer links between VET and the labour market.’