Europe: Expert Encourages Labor Market Reform in Advance of Aging Workforce

The European Union needs to undertake far-reaching labour market reforms if it wants to be able to safeguard its social security system, according to a Policy Brief written by Fabian Zuleeg and released by the European Policy Centre. Otherwise, it is not clear that Europe's social security system "will be affordable with fewer payers and a disproportionate rise in the number of recipients of, in particular, pensions and health care."

At a briefing on the issue, as reported by Jochen Luypaert, Zuleeg said that employment rates need to increase, especially among women, older people, ethnic minorities, people with disabilities and low-skilled people.

The EPC expert proposed to get rid of early retirement schemes, raise the retirement age and introduce policies that engage older workers in the labour market.

One of the proposed ways to avoid companies laying off older workers is to make sure that their wages correspond to their productivity, even if this means that older workers are paid significantly less than is currently the case.

Source: European Policy Centre Policy Brief (November 16, 2007)

Additional Source: EUobserver "EU labour market reform 'urgent'" (November 29, 2007)