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The EU economy is recovering but still lacks social inclusion

The Annual Report of the Social Protection Committee (SPC) and the European Semester Autumn Package, including the Annual Growth Survey (AGS) and the Draft Joint Employment Report have been published in the last few days, giving a picture of the economic performance, the state of employment, social inclusion and social protection in Europe.

The general economic situation is improving, in term of economic growth and employment rate: unemployment has fallen back to pre-crisis level, helping more than 10 million people out poverty or social exclusion over the past years. There are also reductions in the share of the population suffering from severe material deprivation and in the share of children at risk of poverty or social exclusion in many Member States.

The SPC Report highlights, however a lack of inclusiveness in the economic recovery, with income inequality remaining persistently high at EU-level, a widening poverty gap in many countries and the following “social trends to watch:

  • Deterioration with regard to the depth of poverty in many Member States, and with regard to in-work poverty in several countries
  • Rises in the at-risk-of-poverty rates for people residing in (quasi-)jobless households, pointing to weaknesses in the adequacy of social benefits in several countries.

According to the Draft Joint Employment report people with disabilities are significantly more likely to live at risk of poverty or social exclusion than those without disabilities: in 2016, 30.1% of persons with disabilities in the EU were at risk of poverty or social exclusion, compared to 20.9% of people without disabilities, with a wider gap is more for working-age people and according to the severity of disability. Participation of women in the labour market continues to grow at a fast pace. The employment rate of women stood at 66.5% in 2017, but the employment rate gender gap remains substantial, with considerable disparities across Member States. Though women are generally better qualified than men in terms of educational attainment level, the gender pay gap is high and only gradually declining. The impact of parenthood and caring responsibilities remains the main driver of lower employment rates, with underdeveloped services being a major impediment to stay in or return to employment. Furthermore, informal carers, the majority of whom are women, are more at risk of experiencing poverty and financial dependency. Long-term care sustainability will also be challenging for those Member States which now rely heavily on informal care. The pool of informal carers is shrinking due to changing family patterns, with increasing female employment and a higher retirement age. Informal care also entails important costs for the economy, as informal carers reduce or leave formal employment, and thus pay little or nothing in taxes and contributions. There are also challenges in recruiting and retaining carers. The sector is affected by the prevalence of part-time work and temporary contracts, which reduces its attractiveness

The Annual Growth Survey recommends Member States address this situation with a mix if initiatives including activation and social inclusion policies close to the universal access to affordable and quality care services. Wider access to high-quality care services including childcare or long-term care would ensure more opportunities for women to enter or stay in employment and reduce the risk of poverty and social exclusion among children and vulnerable groups. More efficient policies to integrate migrants in the labour market would support their wider social integration. To ensure fiscal sustainability and maintain universal access to quality healthcare, Member States need to increase cost-effectiveness by investing in innovation and prevention as well as strengthening links with social care to meet the needs of an ageing population.

For more information, contact Irene Bertana, Policy and Advocacy Officer

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