To reach the 80% employment target, both the number of available workers and jobs need to increase. Muriel Dejemeppe, an economics professor at the IRS and editor of “Regards Economiques”, states that increasing the activity rate is more critical than reducing unemployment rates. The activity rate in Belgium is only 76%, lower than that of neighboring countries such as the Netherlands, France, and Germany. Though Belgium’s unemployment rate is lower than France’s, it masks significant regional disparities. The unemployment rate is 11.3% in Brussels, 8% in Wallonia, and 2.9% in Flanders.
Dejemeppe identified three critical issues related to the employment rate. First, there is a need to increase the activity rate of 55-64-year-olds, which is roughly 55%. The researcher suggests policies that allow the elderly to work part-time by drawing part of their pension. Second, the unemployment rate varies significantly across regions. Third, the number of long-term patients with disabilities or illnesses is high, and only 23% of them are employed. Reintegrating long-term patients into the labor market is essential to increase the activity rate.
Dejemeppe emphasizes that the government needs to take concrete steps to increase the activity and employment rate of older workers. In conclusion, addressing these issues is crucial to attain the 80% employment target.
Reaching the 80% target would require increasing both the number of people available to work and the number of jobs. Let’s dwell on the first element with Muriel Dejemeppe, professor of economics at the IRS (UCLouvain) and editor-in-chief of the magazine “Regards Economiques”. And his first observation concerns more the activity rate… than the unemployment rate.
“The activity rate of 76% with us is lower than that of our neighbours: the Netherlands, France or Germany“, while our unemployment rate (5.3% of the active population) is better than the French unemployment rate (7%) for example. And to increase the employment rate, we must first increase the rate and the researcher identifies three specific problems.
“First and foremost, we must increase the activity rate of 55-64 year olds“This activity rate actually reflects the number of people who want to participate in the labor market.”Among 55-64 year olds, is around 55%. Only one out of two people at this age participates in the labor market. And this problem is present in the three regions of the country: 52% in Brussels, 58% in Flanders and 49% in Wallonia. So that is really the structural black point of our job market.” And to support her reasoning, the researcher points to another indicator: “The activity rate of 25-54 year olds is 82% in our country, so that’s not necessarily where the problem lies.“
In this context, Muriel Dejemeppe believes that measures should be found to keep the 55-64 at work “for example, by allowing them to work reduced hours by drawing part of their pension. This would be positive for the country’s finances but also for people’s psychological health because it must not be easy to live with thinking that you are no longer suitable for the job market at 55.“
Politically, it is easier to attack the unemployed than the long-term sick
Muriel Dejemeppe, professor of economics at the IRS (UCLouvain).
“Then, the second problematic point is the unemployment rate“, explains the editor-in-chief of Economic views. “And this unemployment rate hides significant regional disparities.“According to ILO criteria, approximately 5.3% of the active population is unemployed, but it reaches 11.3% in Brussels, 8% in Wallonia and 2.9% in Flanders, according to Statbel figures.
“So these rates are structurally too high on the French-speaking side and almost at full employment in Flanders. We also talk about unemploymentfrictionnel“, since at this level of 2% or 3%, we consider that these are people who are unemployed between two jobs, two professions, for a very limited period, and that this is a rate that we can no longer bring down.“And we note that by adding the Flemish incompressible unemployment rate (2.9%) to its current employment rate (76.7%), we would still not reach the rate of 80%.
These unemployed people, as we saw above, would not on their own make it possible to reach the employment rate 80%, even though they were all at work. However, they are more at the heart of political discourse than the inactive, who are six times more numerous. “It is true that they are a bit of an easy target. They receive unemployment benefit so they cost the state. So politically, it’s easier to attack these people than to attack the long-term sick, to whom it is difficult to teach a lesson. And in this respect, the inaction on the issue of 55-64 is worrying since it is not enough to raise the starting age to 66 or 67 for everyone to work until that age. It’s not mechanical. Above all, work at that age must be possible and feasible without being pushed out by a company that considers that these older workers cost too much in relation to their productivity or their flexibility.“
Finally, the third problem is precisely that of long-term patients, according to the researcher. In our figures, they effectively represent 6.67% of the population aged 20-64, well above the unemployment rate of 4%. “And that goes back to our first point because it’s mostly people aged 55 to 64.“, specifies Muriel Dejemeppe.
According to Statbel, only 23% of people who say they are significantly hampered in their daily activities due to a disability, illness or long-term illness are at work. “This question of the reintegration into the labor market of people who have been absent from work for a long time is therefore important, but it is on the government’s table.“. And this question would above all increase the activity rate.
These findings by Muriel Dejemeppe are not new. They are also found in full in thegovernment agreement. “The increase in the activity and employment rate of older workers is very important here. The government will take concrete initiatives in this regard, in consultation with the social partners and the federated entities.“
In conclusion, achieving the 80% employment rate target in Belgium is not just about reducing unemployment but also increasing the activity rate of different age groups and tackling regional disparities. As highlighted by Muriel Dejemeppe, the 55-64 age group is a critical segment to focus on to increase the activity rate, with measures needed to keep them in the labor market. Additionally, the unemployment rate and the long-term sick also need attention to increase the activity rate. While these challenges are not new, the government agreement acknowledges them, and concrete initiatives will be taken to address them in consultation with the social partners and federated entities. Achieving the 80% employment rate will require a joint effort to promote a healthy and sustainable job market for all.