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Investing in Urban Jobs for Growth

Submitted by on 25 Nov 2013 – 15:34

By Henk Kool, Vice-mayor of the city of The Hague; First vice-chair of ECOS of the Committee of the regions; Chair of Social Affairs Forum of Eurocities

The financial, economic and budgetary wave that is hitting Europe, hits the European urban areas particularly hard.
Urban areas do their utmost taking steps to reduce the worst misery, Cities invest billions in their physical and social infrastructure and yet the labour market is not really showing much improvement. There is, therefore, the need for urgent help. Is rescue anywhere in sight?

In the spring of this year 2013, the European Commission (EC) proposed a EU package for social investments. At first when you read it, the proposed package has many similarities with the EC report on Active Inclusion (2007) that came out before the outbreak of the financial crisis that then plunged us into the current budgetary and economic crisis.

Moreover, how different is the present situation compared to the one in 2008? The figures we presently refer to are far off from the ones in 2008.

Our concern then was to provide a new perspective to all people who were furthest away from the labour market or even the ones completely removed from it. That group was quite well defined.

Today, however, we face an increasing influx of people who have become unemployed and the ones outside the labour force. Even in the prosperous Netherlands, unemployment figures are still shifting significantly.
In The Hague, the labour market has faced a decrease of 10,000 jobs since 2008. The labour market dropped from 265,000 in 2008 to 255,000 jobs in 2012.

On the other hand, the population has grown by more than 25,000 persons from 475,904 inhabitants in 2008 to 502,802 persons in 2012.
In other cities of the Netherlands, the picture is a little less dramatic, but the growth is still visible. In fact, unemployment has increased in the Netherlands from 300,000 unemployed in 2008 to 540,000 in 2012.
To put it into another perspective: the number of homeless in the cities is rising again.

From a European point of view, the economic crisis has greatly affected the urban areas in particular. Problems of poverty and social exclusion are therefore most obvious in the urban areas where 80% of the European population lives and accounts for 85% of GDP.
A new package of social investments is therefore urgently necessary.

Work is the key to financial independence for our citizens. Earn your own bread and thus your existence. That is what the people want.
The Government, from the European Union to the cities and the regions, has the task to provide the people with education, housing, healthcare, vocational training etc.

The Government has never done that alone and is certainly not going to now. That does not suit our European society model. That model is mainly the governance model of co-creation. That terminology makes it clear that the local authorities cannot do it alone. Financial and policy involvement by the social and institutional partners are therefore essential to make it all possible.

Time has come to work together once again.

I am talking about the trade unions whose members should be willing to invest in lifelong learning. I am talking about the employers who are willing to give the unemployed people furthest away from the labour market a chance by means of contract compliance. I am talking about the banks and institutional investors that are willing to give the economy and housing market an impulse. I am talking about of the Governments within the European Union in all its layers, which must work together.

Believe me: the package of measures that the European Commission has proposed with her Social Investment Package (SIP) is quite impressive. Nevertheless, is the Commission’s package good?

The package makes it clear, that the European Union cannot realize this alone. It is not only comprehensive, it also asks for customization. Only the regions and the cities can provide that customization. There is where you will find the major European social problems, also the economic potentials. That is why we must also ensure greater European financial support for these Governments. To begin with there should be additional resources for European structural funds such as ESF and ERDF. The SIP does not provide this! That is a major shortcoming for the cities and regions.

However, there has to be work or work must also be provided.
Social measures are therefore not sufficient. Europe is suffering from a strict austerity regime whereby Governments are reducing their budget even more. However, it would be a good thing, when the EU, as has happened in the US, sets up the creation of jobs as a second main goal within their policy. The monetary policy of the US FED is subsequent. The FED is pumping money into the economy and that really helps. The European Union desperately needs such a flanking policy. Rotterdam Mayor Aboutaleb and I have successfully defended this statement in the Committee of the Regions based on Aboutaleb’s opinion on the Social Investment Package.

With such flanking policies, the European Union would have a stronger case with her citizens. It would not just be a brutal cost-cutting machine, but also an Institute that promotes in times of crisis, the EU budget and the national budgets to include employment programmes and social investment programmes.

Let me make it very clear, we must not only formulate the objectives, but also make them smart. After all, the objectives are already available: according to the Europe 2020 project, 75% of the population between 20 and 64 years must have work. That is, up to the present, year 2013, in the whole of the European Union only 68.5% [1] .

With additional resources for the structural funds and a genuine employment policy (75% of the population between 20 and 64 at work), we will have a financially and socially healthy Europe.

There is still plenty of work to be done!

[1] http://epp.eurostat.ec.europa.eu/portal/page/portal/europe_2020_indicators/headline_indicators