Labour market situation in the country
 

Labour market situation

The labour market is the 'institutional system' in which supply and demand for labour meet. The interaction between supply and demand for labour in Flanders is determined by a whole series of factors, such as education and training systems, labour regulations, social security and, in particular, its financing, taxation and the wage bargaining system. Moreover, employment policy explicitly aims at adjusting the situation of certain groups in the labour market, for example when policies give a particular target group a specific advantage in terms of recruitment (e.g., unskilled young people) that would otherwise be "disadvantaged". Young people in general and in particular young people that are not in employment, education or training (‘NEET’) and young people with low levels of education have a vulnerable position in the labour market. This is exemplified by the fact that youth unemployment exceeds the overall unemployment rates in Flanders (Trend report 2022 of the Policy Research Centre on Work).

The Flemish Government and the social partners are responsible for labour market policy in the Flemish Region. The trade unions and employers' organizations take part in the 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, as it gives a particular role to 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 (e.g. because of a disability), 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.

According to EURES (EURopean Employment Services), in 2020 in Flanders, about 75% of the population between 20 and 64 years old is working. Just over 25% of the working-age population is unemployed or inactive. This mainly concerns (studying) young people and (early retired) elderly people. Flanders’ working population is characterized by many workers aged 25 to 54 years and few workers younger than 25 years or older than 55 years. Overall, Flanders scores well within the European Union for the most important labour market indicators. A weak point, however, is the very low employment rate of the so-called disadvantaged groups, for instance low-educated persons, persons with a disability, etc. Since there are relatively more jobs available in Flanders than in the other regions, relatively few Flemish people work in Wallonia or abroad. Most commuters from Flanders go to the Brussels-Capital Region, where 9.2% of Flemish people work. About 3% commute daily to Wallonia or abroad (figures 2018).

In Flanders, strong deindustrialisation has taken place over the past decades, resulting in 25% fewer jobs in industry since the 1980s. Industry (including construction) accounted for 21% of total employment in 2018.    

The largest employers are service companies from the communication and transport sectors, finance and distribution. The private service sectors have a share of 47% in the total employment, the share of public and subsidized services is 31%.

Due to the shift from industry to the service sectors, technological progress and globalization, the qualification structure has also changed considerably. The importance of high-skilled jobs continues to increase, at the expense of medium-skilled jobs. In 2018, highly qualified jobs in Flanders already accounted for 46.8% of the total. This mainly concerns managerial positions, intellectual or scientific positions in education, business services, ICT services and healthcare. Mid-skilled jobs still have a share of 43.6%. The decrease mainly concerned production personnel in industry and administrative personnel. The share of low-skilled jobs remains fairly stable at just under 10%, with mainly maintenance and cleaning staff, which has increased due to the service voucher policy, allowing for tax reductions for families employing maintenance and cleaning staff via this voucher system.

The labour market situation in relation to youth unemployment in the last decades

Young people’s employment is of concern because, in spite of policy initiatives, young people in general and young people that are not in employment, education or training (‘NEET’) in particular have a vulnerable position in the labour market (Trend report 2022 of the Policy Research Centre on Work). Employment rates of young people, in particular of young people with low levels of education, are very sensitive to economic fluctuations. Not surprisingly, the economic crises in 2009 and 2012-2013 have greatly impacted the labour market participation of Flemish youth: 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.

Once recovered from the economic crises and with a modestly growing economy, the Flemish unemployment rates has been declining until 2019, when it reached 9,5% for people aged 15-24 and 3,3% overall for people aged 15-64. In 2019, the Flemish youth unemployment rate was approaching the very low level of 2008, thanks to the recovering economy, the generational change and later entry into the labour market of young people. The thriving economy created a favourable starting point for young people. In addition, the exit of the baby-boom generation ensured a large replacement demand that met with 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, resulted in a reduction in youth unemployment. 

With the Covid-19-pandemic and ensuing economic fluctuations, unemployment in general and youth unemployment in particular have been rising, with youth unemployment reaching 10,8% in 2020. Youth unemployment has continued to rise, reaching 13,5% in 2021, which is, however, still below the Belgian average. Nevertheless, compared to 2020, the average monthly number of unemployed young people that found employment has risen in 2021. The 2023 Trend Report of the Policy Research Centre on Work indicates that the Flemish Labour market has -to a large extent- recovered from the pandemic, except for people with low levels of education. Nevertheless, attention to young people’s labour market position remains important: the employment of young people is improving, but at the same time the absolute number of young people with a temporary contract continues to grow strongly. Some groups of young people are more vulnerable for non-employment. The situation of low-educated young people and young people with a migration background, in particular, is not good. A successful employment policy starts at school. Leaving education without a degree or certificate leads young people to miss out on labour market opportunities. Nevertheless, the share of early school leavers without a diploma has fallen sharply in recent years in Flanders and was 6.2% in 2019, which is the lowest level since this indicator was measured. In 2021, the number of young people that are not in employment, education or training (NEET) appears to have reached its lowest level in 14 years (even though there are some changes in measurement of this indicator).

Main concepts
 

In Belgium, the working age population is between 15 and 64 years old. Youth employment is part of the general employment policy. 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.

The Labour Law defines « young workers» as workers aged between 15 and 18 years old (this limit can be extended to 21 in some cases), who are no longer subject to compulsory full-time schooling. Full-time schooling is compulsory up to the age of 15 and consists of maximum 7 years of elementary school and the two first years of secondary school. Part-time schooling is compulsory until the age of 18. Young workers are allowed to work 8 hours a day at most and 40 hours a week maximum.

Instances that report statistics on youth unemployment often report on young people as persons below 25 or below 30.