3.1 General context
Labour market situation in the country
Labour market situation
The labour market in Belgium is the 'institutional system' in which supply and demand for labour meet. The labour supply is based on the employees, while the demand for labour is a matter for the companies. The other labour market player is the several governments (represented by the Public Employment Services and National Employment Service). Some authors use the term "employment system" to refer to the institutional architecture that regulates the meeting of supply and demand on the labour market. It is important to have a very broad picture of the instruments that guide employment systems. The interaction between supply and demand for labour is determined by a whole series of factors, such as education and training systems, labour regulations, social security and, in particular, its financing, taxation or the wage bargaining system (this list is not exhaustive). Moreover, employment policy explicitly aims at adjusting certain "natural" effects of these institutional instruments on the situation of certain groups in the labour market, for example when they give a particular target group a specific advantage in terms of recruitment (e.g. unskilled young people) that would otherwise be "disadvantaged".
The Flemish Government and the social partners are responsible for labour market policy in the Flemish Region. The trade unions and employers organizations together form SERV (Socio-Economic Council of Flanders) in which social consultation takes place. It is the main advisory body to the Flemish government on Flemish socio-economic policy. The Federal Government is responsible for monitoring employment and unemployment and develops the labour market policy in consultation with the federal social partners.
A specific characteristic of the labour market is the social security. The approach to social security in Belgium is distinctive and unusual. It is conducted by the social partners - the employers and the trade unions - with the Government as an observer. The social security has three functions: In the event of loss of income from work (unemployment, retirement, incapacity for work), a replacement income is paid; In the case of certain 'social charges' (additional costs), such as bringing up children or medical expenses, there is a supplement to the income; if you do not have a professional income involuntarily, you will receive social security benefits such as the integration income. The unions actually pay the allowances to the unemployed while those who are not members of a trade union can go to the neutral government office.
Effects of the recent economic crisis
The global economic and financial crisis that was unleashed at the beginning of 2008 was not without consequences for the labour market in Belgium. The labour market in Belgium has faced additional challenges due to this world and European economic crisis, which initially affected employment in Flanders much more than in Brussels or Wallonia.
Young people within the European Union were badly affected by the economic crisis. Belgium was no exception and youth unemployment rose. Following general indicators, the youth unemployment rate in Flanders increased significantly between 2008 and 2009, from 10.5% to 15.7%. As might be anticipated, the unemployment rate among low-skilled youth was higher than among high-skilled youth, according to labour force statistics in 2010.
Nevertheless, the system of social security in Belgium considered to have been a restraint on the negative impacts of the crisis and as a result, Flanders was hit less than many other countries.
The rise in the number of unemployed job-seekers on an annual basis stopped accelerating in mid-2009, but slowed significantly only in early 2010 and not until October 2010 was the number lower than a year previously. The decline in unemployment rates was most marked in Flanders compared to Brussels and Wallonia. It was also in this region that the impact of the crisis made itself felt the most: in 2009, the number of unemployed there had exceeded the level of the previous year by some 20%.
The labour market situation today
The Flemish unemployment rate has been declining since August 2015, with unemployment figures dropping. The Belgian and Flemish economy experienced modest growth and growth expectations are moderately positive.
The labour market in Flanders is also moving in the desired direction. Recent statistics of the VDAB demonstrate that in 2019 Flanders had 196,433 unemployed non-working jobseekers. On an annual basis, the Flemish unemployment rate decreases by 10,852 units or 5.2%, as reported by the VDAB. The jobseekers with an unemployment benefit application represent 64.0% of the Flemish registered labour reserve, young people in employment for 8.6%, freely registered jobseekers for 14.7% and the group 'Other' for 12.7%. Other' includes part-time learners without a job as well as job-seekers with a living wage, recognised refugees with integration income who register as jobseekers are added to 'Other'. The jobseeker with an unemployment benefit application decreases by 7.1%, the decrease in the period of occupational integration of young people is more than 5 percentage points lower than the average and amounts to 13.3%. For the other two groups we note an increase, for the freely registered jobseekers this is an increase of 2.6%, for the group 'Other' an increase of 2.3%. The annual difference in both groups is more than 5 percentage points higher than the average.
Unemployment among young people and the middle-age group fell by 7.4% and 6.4% in 2019. The slower decrease among the over -50s (-1.4%) results from the longer availability for the labour market due to changes in the regulations and the increase in the number of over -50s in the Flemish population due to the ageing of the population. The upward effect of this is concentrated among the over -60s (+26.9%). The 50- to 55-year-olds and the 55- to 60-year-olds do score lower (-9.0% and -15.2%). 56,395 or 28.7% of the jobseekers have a migration background. Unemployment among foreigners decreases by 1.2% on an annual basis, while unemployment among native Dutch people decreases by 6.8%.
Youth employment Flanders
In 2019, the Flemish youth unemployment rate is approaching thanks to the recovering economy, the generational change and later entry into the labour market of young people, back the very low level of 2008. The economic situation in recent years has created a favourable starting point for young people. In addition the exit of the baby-boom generation ensures a large replacement demand that also clashes on sparsely populated inflow age cohorts. The later entry into the labour market as a result of a rising participation in education, but also because young people do longer over the course of their studies, also bears to a reduction in youth unemployment. The ageing and dejuvenation in combination with the thriving economy inevitably leads to a "War on Talent", the labour market watchers shout in chorus.
Youth unemployment in Flanders exceeds the total unemployment rate. In 2019, Flanders has an unemployment rate of 17,73% for young people under the age of 25. At the same moment, the overall unemployment rate in Flanders was 7,48%. 22,15% of the total number of unemployed jobseekers was younger than 25 (source: arvastat VDAB).
EUROSTAT conducted a survey by the entire population older than 15 year-old. According to the EUROSTAT data, 7,5% of the 18-25 year-olds in the Flemish Community don’t have a certificate of secondary education and are not in education (Numbers come from Department Education and Training, EUROSTAT).
Furthermore, the situation of low-educated young people and young people with a migration background in particular is not rosy. A successful employment policy starts at school. Too many young people leave education without a degree or certificate and consequently miss out on labour market opportunities.
The Flemish Youth and Children’s Rights Policy Plan (2015-2019) mentions the following challenges:
- supporting young people towards sustainable employment
- providing high quality employment to ensure the opportunity to lead a qualitative life
The Labour Law of 16 March 1971 is regulated at federal level (Arbeidswet van 16 maart 1971). The Law is wide ranging and consists of individual and collective labour law, labour regulations and regulations covering well-being at work.
For the purposes of this law, "young employees" means: underage workers who are 15 years or older and who are no longer subject to full-time compulsory education. However, the King may make the provisions of this law relating to young employees applicable to employees between the ages of 18 and 21, if necessary under conditions to be determined by him.