Despite the better economic news, the risk remains that the younger generations will have less well than their parents, finds the European Commissioner for Employment and Social Affairs Marianne Thyssen.
Presenting the Annual report on employment and social developments in Europe on Monday, Thyssen presented the situation on the European labor market, a decade after the outbreak of the financial crisis.
EU’s labor market looks rosy again, while the unemployment rate is the lowest since December 2008 and employment has never been higher. “We are firmly on the way to economic growth and employment,” said Thyssen, but “the risk remains that the current young people and their children will be less well than their parents.”
Young people face “double burden”
The annual report clearly shows the inequality between generations, as the young people benefit a lot less from the steady improvement in the standard of living within the bloc, as it is still harder for them to find a job and often have to settle for part-time and temporary contracts as permanent solutions.
In addition, The aging of the population will put these young people in a “double burden”, leading them to pay higher pension contributions, and also make them receive a lower pension than their salary in the future.
At the moment, there are still four people of working age for every pensioner, but until 2060, it will be two for every retired person, as Thyssen told journalists. “All these difficulties have an impact on the decisions of young households, having children and buying a home,” adds the Commissioner. “This can have negative consequences on fertility rates and, therefore, on the sustainability of pension systems and growth.”
A lot of work remains to guarantee the standard of living of the next generations, adapting the age of the pension to the life expectancy, but also try to make the European working-age population more active. Policies to increase fertility and to manage migration effectively can also be useful, according to the Commission report.