Costs of labour market adjustment can be more widely shared in publicly subsidised short-time working schemes, according to the 2010 Annual Report from the European Restructuring Monitor, presented at the European Employment Forum in Brussels. Just as the last two decades saw a reorientation from passive to active labour market policy, so should a flexicurity-aligned system of short-time working adopt a more active stance, Eurofound argues in its report.

Never before have short-time working schemes been so prominent as in the last two years. Many Member States expanded their existing schemes and others introduced them for the first time. Such schemes have been widely seen as successful in alleviating the worst effects of this very serious recession. Working time reduction was particularly prevalent in Germany, Belgium, Italy, France, the United Kingdom (UK) and Sweden. This contrasts with the Czech Republic, Slovakia, Bulgaria, Portugal, Slovenia, Hungary, Spain and Lithuania, where most of the net adjustment was due to job losses.

All in all, the number of economic short-time workers, not necessarily on publicly subsidised schemes, tripled to almost two million between 2008 and 2009, according to the report.

This year’s annual report from the European Restructuring Monitor (ERM) includes an analysis of Economic Short Time Working across the European Union. It also examines the potential of short-time working and temporary layoff measures to serve as a concrete implementation of the EU’s ‘common principles of flexicurity’. The report illustrates the extent to which genuine consensus has been achieved among social partners at national level in many countries, building trust and common understanding among the parties involved.

‘This report shows that this consensus could be harnessed to develop these schemes further towards a more active policy orientation, an extension of the flexicurity concept and, more concretely, the generation of new skills for the jobs needed to put Europe on the path to recovery and towards the vision of the Europe 2020 strategy,’ says Donald Storrie of Eurofound’s Employment and Competitiveness Unit.

The report also shows that five million fewer people were in employment in the first quarter of 2010 compared with the onset of the crisis in mid-2008. Construction and manufacturing alone account for a net decline in employment of five million people. Significant decline has also been observed in the transport and retail sectors. Sectors in which employment is growing include health and education, computer programming and consultancy, and other professional and scientific activities.