Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

Where do we come from? The EU agenda on
employment growth and social inclusion
It seems important to remember that the old member states of the EU
originally consisted of a set of mature welfare states that during the 1970s
and 1980s had achieved high levels of social equality – unmatched in
other regions of the world. In the golden years of welfare expansion up
until the 1980s, most member states had tended to respond to economic
shocks and industrial restructuring by taking people out of the labour
market and thereby reducing the employment rate. In contrast to other
OECD countries, western Europe had relatively high shares of workers
going into early retirement but also joining the ranks of the long-term
unemployed. As has been well documented, Europe had developed a
problem of employment creation while the liberal labour market of the
US created many jobs but many with poor quality.
The single European market programme of the 1980s – while liberalising
many sectors of the European economy – initially even relied on the
functioning of the mature welfare state during the process of restructuring,
which was induced by the liberalisation of markets. Moreover, Jacques
Delors framed the social agenda as a form of compensation for economic
liberalisation and thereby implied that the EU would stand behind the
role of the welfare state. While the EU did not have any responsibility in
the area of welfare, the Commission well understood that welfare played a
key role for the legitimacy of the Single European Market.
In this light, first discussions on regulation and standards of minimum
incomes started at the EU level in the early 1990s. In May, 1991, the
Commission proposed a recommendation on minimum incomes in the
follow-up of the Community Charter of Fundamental Social Rights of
Workers (1989) and the affiliated action programme. This resulted in a
“Minimum Income Recommendation” 3 enacted by the European Council
which focused on the acknowledgment of the fundamental right to access
resources and social assistance and on agreement of common principles
for the enforcement of this right within the framework of national social
security systems.
The 1992 recommendation applies to all member states in the sense
that governments generally should set minimum incomes, but – like all
recommendations – it is not a legislative obligation. It has prompted a
more comprehensive social security approach at least in some member
states such as Portugal and Italy.
132
After the crisis: A new socio-economic settlement for the EU