Roundtable on the jobs crisis

What governments are doing

Ministers responsible for employment from around the world gathered at the OECD on 28-29 September to discuss the jobs crisis. In our eighth OECD Observer ministers' roundtable, we ask six representatives, from Canada (co-Chair), Italy (co-Chair), Sweden (vice-Chair), France, New Zealand, and Chile, which is a candidate for OECD accession: What new policy actions are you taking to improve the jobs situation in your country?


Canada, Italy, Sweden, France, New Zealand, Chile


Working from a solid base

©CanWest News ServiceDiane Finley, Minister of Human Resources and Skills Development, and co-Chair of the 2009 OECD Labour and Employment Ministerial Meeting

The OECD Employment Ministerial meeting is occurring at an important juncture. There are encouraging signs of an economic recovery on the horizon, but we still have work to do. We must continue to address our current labour market challenges, while not losing sight of our longer term labour market policy goals. Canada has been fortunate. We were the last G8 country to feel the impact of the recession. We had, and still have, a solid banking system and low and stable infl ation. We confronted the recession with a sound fiscal framework. We benefit from a diverse, highlyeducated, skilled and mobile workforce. Nevertheless, many communities, businesses and workers have been seriously affected by the slowdown. The government of Canada reacted quickly. In January, we introduced Canada's Economic Action Plan, a plan to protect Canadian jobs through an unprecedented stimulus to the economy.

Consistent with the OECD Reassessed Jobs Strategy, the plan includes the right mix of short-term measures that respond to workers' needs, while advancing longer term economic goals. Specifically, the Skills and Transition Strategy provided a major financial injection in initiatives to both help Canadian workers and their families weather the economic storm, and provide them with the income support, training and skills development to prosper in the future. Workers who found themselves laid off after being in one type of job for a long time are being provided with skills upgrading to get new jobs. Older workers are getting the support they need to remain in the workforce.

New investments are also helping newcomers to Canada get their credentials recognised faster to get them into the workforce more quickly. And we're providing incentives for workers to complete their skilled-trades apprenticeship training. Targeted assistance and skills development are being provided to vulnerable and under-represented groups to increase their labour market participation. To help youth, we increased summer job funding to offer more jobs for students and we created new youth internship opportunities. To provide economic stimulus, the rate of Employment Insurance premiums, paid by employers and workers, has been frozen for 2010 at the same rate as 2009. Our action plan supports Canada's G20 commitments and the OECD's recommendation for timely, targeted and temporary interventions, to get the economy back on track.



Towards a cohesive, dynamic society

Maurizio Sacconi, Minister of Labour, and co-Chair of the 2009 OECD Labour and Employment Ministerial Meeting

 "People First" are the key words for all Italian policies and the mainstreaming of the international actions identified during the "G8+" Social Summit of Rome to prevent the waste of human capital and save jobs. The Italian government has adopted three main guidelines to tackle the economic crisis, to reduce its impact on the labour market and to restore trust: keep stable and sound public finances; avoid any credit crunch to firms; and guarantee workers' income and maintain people's employability.

To save jobs and preserve social cohesion we strengthened all measures aimed at preventing redundancies and workers dismissals, supporting both employees and companies. The main pillar of these measures is the Cassa Integrazione Guadagni (Redundancy Fund). This instrument helps firms in financial difficulties by relieving them of the costs of laying off workers, and by supporting those workers who might lose part of their income. This pillar of the Italian social security system has been reinforced and extended to all types of workers and to all sectors, particularly to SMEs.

An important agreement was signed by the government and the regions in spring 2009 to tackle the jobs crisis. The agreement assigns a key role to the combined interventions of training actions and unemployment benefits. This is a clear example of passive-active measures connected to a welfare-to-work approach. Some €9 billion were mobilised for 2009-10. The results show that these measures have succeeded in containing the negative impact of the economic crisis. The increased use of the enlarged Cassa Integrazione, the adoption of fl exible hours within companies, a more adaptable use of labour contracts helped to cushion the effects of the crisis on employment.

At the end of July, some 800,000 workers had benefited from these measures and remained employed. Although the "green shoots" of economic upturn are already evident, and the turning point has been reached in the global labour market, it is essential to preserve human capital and support a sustainable economic recovery. Italian commitment continues to be "People First" to improve the jobs situation and restore confidence in the future. This summer the Italian government issued a White Paper on the future of the welfare system. The goal is to build a new welfare system based on financial sustainability but also on new opportunities for the development of a happy, active and dynamic society. A society built around the value of life is key to achieving social cohesion and economic growth.



Boosting active policies

Sven Otto Littorin, Minister for Employment, and vice-Chair of the 2009 OECD Labour and Employment Ministerial Meeting

The Swedish government initiated a huge structural reform agenda when it came into power in 2006. This agenda remains, despite the recent economic downturn. The government considers it particularly important to continue its labour demand and supplyincreasing policies; its reduction of individual and corporate taxes; its aim to facilitate labourmarket entrance, and to increase educational opportunities. The aim of this agenda is to provide better conditions for high and sustainable growth and employment, given that this is essential in order to deal with the challenges due to the ageing population.

However, like many other countries, Sweden has also been hit hard by the recent economic downturn. Employment prospects are weak and unemployment is rapidly increasing. In order to prevent persistent unemployment and to sustain labour-force participation, it is of huge importance that those who now lose their jobs remain attached to the labour market. The government has therefore increased the resources available for active labour-market policy. In particular, the public employment service has been instructed to increase its coaching activities and the number of places available in work placement schemes, i.e. slots that include practical skills development.

In order to help the long-term unemployed to re-enter the labour market, the government has recently doubled an already existing social security deduction targeted at those unemployed people who have been living on benefits for an extended period. The budget bill for 2010, which the government presented on 21 September, includes further measures in line with those mentioned above. Visit


Pillars for youth

Martin Hirsch, High Commissioner for Youth

France often ranks close to the average in the OECD's comparative tables. The youth employment rate of young people under the age of 25 is an exception, as on this score, France is one of the lowest ranked countries, at well below the average. This reflects a deep-seated problem. It is as though France knew how to give adults enough confidence to have children, but did not have enough confidence in itself to find a proper place for each young person in the world of work. The French government has embarked on a radical course of action to remedy this situation, by drawing up a cross-cutting strategy in favour of young people, with the input of a special commission, made up of all the relevant players in the field.

The first pillar of this strategy is forging closer links between the educational system and firms, and between training and entry into the workplace, by: taking account of all skills, including those acquired outside the educational system; reforming students' learning paths; stepping up training courses that alternate with periods of work in firms; and creating a pre-hiring mechanism. The second pillar is the support young people receive preparing for work. This will involve raising the current school-leaving age from 16 to 18 and creating platforms designed to prevent students from dropping out and to offer young people in difficulty a second chance or an alternative career path. The third pillar relates to incentives and resources for young people, i.e. better support for students and increased resources for helping young people in difficulty. Income-support mechanisms, based on the experience of other countries, will be introduced on a trial basis.

The fourth pillar involves granting young people, once they reach adult age, all the rights of full citizenship, and creating a voluntary, paid civic service that will enhance the value of working for a cause in the public interest. This ambitious programme will have to be pursued over several years and will require far-reaching reforms. And we shall monitor France's ranking in the OECD tables, in the hope of rejoining those countries that have made their young people a policy priority. Perhaps from 2010 onwards France will offer lessons that the OECD and other countries will find useful.




Cutting costs for business

Paula Bennett, Minister for Social Development and Employment

New Zealand entered the economic downturn with a healthy economy and a record low rate of unemployment, but with an underlying problem of long-term welfare dependency. The new government was sworn in late last year, just as the economic recession started to bite. Our immediate concern was to blunt the impact of job losses while putting in place longer-term measures to increase work readiness and productivity. 

Because New Zealand has a problem with welfare dependency, our concern was that the recession would put people back onto welfare and their link to the labour market would be broken. So we have adopted a strong "work first" approach, getting people into work instead of onto benefits wherever possible and supporting businesses to retain and create jobs.

We chose not to use the public service for job creation; instead, we focused on creating employment growth through fiscal stimulation and wage subsidies. One of the first steps was a package of measures designed to cut costs for business by reducing compliance and regulation.

We held a "Job Summit" with business, union and community leaders to gather ideas on what could be done to stem the rising tide of job losses. Among other ideas, this led to a "Job Support Scheme" that allows businesses facing temporary difficulties to reduce redundancies by putting staff on a nine-day fortnight.

We provide financial support to employees who agree to reduce their working hours in order to prevent their co-workers from being made redundant. For those who do lose their jobs, the "Restart" package helps with up to 16 weeks of additional housing and family income support while they search for work.

Our focus is now shifting to 16 to 24-year-olds because we believe they are most at risk of long-term disadvantage if not engaged in education or work. Our most recent initiative offers employers subsidised workers drawn from those receiving unemployment benefits to give young people six months of work experience, coupled with increased training and education places.



Structural focus

Claudia Serrano Madrid, Minister of Labour and Social Security

Economic activity has been seriously damaged by the global crisis, resulting in severe outcomes, including unemployment. We must overcome this problem by applying a wider view, by dealing with the immediate situation but, above all, by promoting permanent measures that address the structural problems in the labour market, encourage "employability"-especially for youth and women-and strengthen unemployment assistance.

To address these issues, a fiscal stimulus plan of US$4 billion, equivalent to 2.8% of our GDP, was put in place. That, combined with a countercyclical currency policy, and historically low interest rates and inflation, should trigger economic activity through investment, consumption and easier access to loans.

Likewise, a national agreement between government, workers and employers, was signed this past July to protect employment and promote job training. The plan, valid for one year, provides innovative measures, such as a job-training programme that allows workers to keep their jobs during training for a period of five months, or a tax incentive for those employers who keep their workers in work during training periods.

Long-term measures include the Youth Employment Subsidy that was put in place in July. The subsidy encourages entry into the labour market for those workers between 18 and 24 years, improving their earnings and future employability, and encouraging employers to hire them. Two thirds of the benefit is given to the worker and one third is given to the employer. More workers are covered by unemployment insurance, and a Labour Skills Certification System has also been set up.

Our main challenge is to develop agreed policies that deal effectively with the global economic crisis and foster improvement in our labour market.


©OECD Observer No 274, October 2009


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