Flexicurity 2nd generation
In 2007, the European Council endorsed a set of common flexicurity principles.
Since 2007, Europe has experienced the worst economic setback in modern times. The crisis in the financial markets has dragged the real economy down, eliminated jobs on a large scale and jeopardised the future economic growth in Europe.
Denmark has also been hit hard by the crisis. The hit was primarily caused by a pre-crisis overheating of the economy leading, to a housing price bubble and too high wage increases.
This testifies that a well-functioning labour market in line with flexicurity is not enough in itself. The use of other policy instruments, including sound economic policies, also has to be put in place.
In time of crisis, however, flexicurity has proved to be indispensable. In Denmark and other countries that has implemented flexicurity, it has been an outstanding element in tempering the consequences of the financial and economic crisis on the labour markets and it has helped ease the way for necessary re-adjustments.
For instance in Denmark:
- The unemployment rate is 8.0% (EU27: 10.2%) (2012,Q2)
- The long-term unemployment rate is 2.0% (EU27: 4.1%) (2012, Q2)
- The youth unemployment rate is 15.6% (EU27: 22.6%) (2012, Q2)
Flexicurity is therefore just as valid today as it was in 2007 – or even more so.
To face up to the challenges in a global world, however, we need a flexicurity 2nd generation with mobile, dynamic and open labour markets.
In Denmark, we are constantly ensuing a labour market with:
Mobility - where people are allowed and encouraged to move freely in search of jobs without barriers
- where people can constantly improve their level of skills and competences
Openness - where the entry of people outside the labour market are eased so the outside-inside dilemma is overcome
Mobile, dynamic and open labour markets are not in itself enough to assure jobs, growth and progress.
But it will help attract and retain companies as it will assure their access to a large and highly qualified labour force. Furthermore, it will benefit European employees, providing them with employment opportunities and professional development. It will also benefit society at large as it will unleash the untapped potential of the millions of people who today stand outside the labour market.
Mobile, dynamic and open labour markets are a precondition if Denmark and Europe is to stay competitive in a global market. It is the only way forward if we want to maintain our present standard of living. Status quo is not an option.