Hannover A4 activating the hyper-excluded

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Hannover policy forum background paper

Workshop A4 - USING ENTREPRENEURSHIP IN ACTIVATION STRATEGIES FOR THOSE FURTHEST FROM THE LABOUR

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Contents

Workshop objectives

  • To provide an overview of the situation of groups that are hyper-excluded from the labour market.
  • To demonstrate the role of social economy and inclusive entrepreneurship in creating work opportunities for those furthest from the labour market.
  • To give some examples of successful activation strategies for very disadvantaged groups.
  • To discuss the main challenges and needs at European level.
  • To examine existing policies and future opportunities to develop in order to improve the situation of very disadvantaged groups.

What is the challenge?

In 2005 the European Council relaunched the Lisbon strategy re-focusing its priorities on growth and employment. It reasserted the importance of the economic, social and environmental dimensions of the strategy in accordance with the mainstreaming defined initially in 2000, and also the need to reinforce the European social model based on the quest for full employment and greater social cohesion.

Up till now, the results of the Lisbon strategy are mixed. Alongside undeniable progress, there are shortcomings and obvious delays.

Unemployment remains a major concern for most EU Member States, with 8.8% of the EU25 labour force unemployed in 2005 (against 8.6% in 2001), and long-term unemployment rising from 3.6% to 3.9%. Seven countries (IE, LU, NL, DK, UK, AT and CY) have unemployment rates around or below 5%, while two (SK and PL) have rates above 15%. The unemployment rate for women is higher than for men in most EU countries and youth unemployment remains very high (18.5% in 2005).

Joblessness is not only one of the main causes of poor living standards but is also in itself a central dimension of social exclusion, since a job is a key determinant of people's ability to fully participate in society, build a social network and realise their potential. A quality job is often said to be the best safeguard against poverty and social exclusion; the incidence of poverty among the working population is far lower than among the jobless population. A job provides an opportunity, ideally, for the individual to develop his or her potential and integrate into society. To be precise, employment is a sustainable way out of poverty and social exclusion when it lasts, when it pays sufficiently to lift workers out of poverty and when it has all those features, normally referred to as "quality in work", that promote the individual's future employment prospects, safeguard their health and safety, and enhance human and social capital.

As such, employment is a crucial objective of various EU policies, such as employment, social inclusion and social cohesion (local development).

Regarding the European strategy for social inclusion, participation in the labour market is also an important priority of the renewed National Action Plans for Social Inclusion adopted in October 2006 under the new streamlined OMC (open method of co-ordination).

In recent years Member States have, to a large extent, made progress towards better coordination between social inclusion measures and use of the Structural Funds, notably the European Social Fund. However, there is considerable room for improvement, particularly in increasing the visibility and importance of the ESF, as well as the ERDF, in achieving social inclusion. The new programming round (2007-2013) presents an exceptional opportunity for upgrading. Member States and Regions now have at their disposal a financial instrument which is both more precise and simpler to use.

Reinforcing the social inclusion of disadvantaged people with a view to lasting employment is now a specific priority for the ESF. Action to develop preventative and active policies to integrate or re-integrate the socially excluded into the labour market also can be supported under all ESF priorities for 2007-2013, underpinning the call for the mainstreaming of active inclusion policies in national policy-making.

However, employment in itself may be insufficient to secure social inclusion of the most disadvantaged groups; other types of intervention allowing for the wider and gradual integration and empowerment of social groups should also play a role here. The ERDF could contribute to the improvement of infrastructure related to social inclusion and fighting urban deprivation and to promote awareness and improve awareness and access to start-up financing for entrepreneurship, including for the unemployed and ethnic minorities.

What solutions have been tested?

Member States are increasingly focusing on "active inclusion" to strengthen social integration. There is a clear trend towards making benefits more strictly conditional on active availability for work and improving incentives through tax and benefit reforms. For those people who are furthest from the labour market, some Member States have put in place policies such as in-work support for job retention and advancement, on-the-job training and a rise in minimum wages to ensure that work pays.

The social economy is an important source of jobs and entrepreneurship, including for people with poor qualifications or whose capacity for work is reduced. It can enable the most disadvantaged to exercise some kind of gainful activity or to create employment in areas without mainstream companies and employers (peripheral areas, remote rural areas). It also provides vital social services and assistance that are often overlooked in the market economy and plays a key role in involving participants and European citizens more fully in society since stakeholders, i.e. workers, volunteers and users, are as a rule involved in management. Several Member States have highlighted its contribution to better governance in the field of social inclusion, and in social and economic regeneration. Nonetheless, programmes and policies vary in scope, quality and comprehensiveness and national approaches vary from strong policy support to an almost complete absence of support.

Examples of measures that help provide job opportunities for those furthest from the labour market include: support for business and employment co-operatives (coopératives d’activités et d’emploi) and reintegration enterprises (WISEs), the creation of new jobs in community services (BE); the creation of a sustainable model for the development of social enterprises (BG); partnership between local authorities and local stakeholders to help mentally ill people into employment (DK); structures for the employment and economic integration of travellers (FR); priority in active labour market policy schemes for ‘non-progression ready’ unemployed (IE); reform of employment subsidies and the development of social enterprises (FI); encouragement to start up of co-operative enterprises (SE); and a social enterprise pilot project providing paid work experience placements for blind people (UK).

EQUAL has also tested many innovative paths and methods to bring the most disadvantaged groups back to work.

In the social economy about 50 DPs in the second round have as principal objective to improve the integration of disadvantaged people through work and many of them address very disadvantaged categories (people with mental problems, Roma, very long-term unemployed, drug and alcohol addicts, offenders).

Kunstenaars & CO

In the Art Works project, led by Kunstenaars & CO of Amsterdam, four different performing artists/group of artists worked with six very disadvantaged target groups (migrants, prisoners, mentally handicapped people, young people at risk, workless families and drug addicts) using art to improve their social skills – and consequently their employability – and creating a social enterprise running a restaurant where 11 mentally handicapped people work.

Libera

In Italy the association Libera uses the lands confiscated from organized crime to create work integration social co-operatives where young and disadvantaged people produce oil, pasta, wine, vegetables and other organic products. These products bear the brand “Libera Terra”, symbol of quality and lawfulness. Social co-operatives have been set up in Sicily, Calabria and Puglia, the most disadvantaged and problematic regions of Italy.

The association is a network of more than 1,200 associations, groups and schools, which work closely with local and national institutions and universities to promote activities aiming at disseminating a culture of lawfulness and democratic values in the society. In the economic field, Libera helps young people to promote legal economic activities, namely through the creation of social co-operatives. At international level Libera has been recognised by the United Nations and is committed to promote the use of confiscated properties for social aims throughout Europe.

Barka Foundation

The Barka Foundation, in Poland, work with long-term unemployed, ex alcohol and drug addics in order to train and support them to create social co-operatives.

Synergia

In Greece, the Synergia project has pioneered the establishment of nine KoiSPEs (limited liability social co-operative), of which 35% of members are persons with mental disabilities.

Vägen ut!

In Sweden, Vägen ut! has created seven co-operatives employing ex-offenders and drug addicts. To provide a strong base, it has created a consortium through which the social enterprises can support each other.

Questions for discussion

  • How to reinforce the social dimension of the Lisbon strategy?
  • Is better co-ordination between employment and inclusion strategies needed?
  • What other needs should be fulfilled in order to promote stable employment of those furthest from the labour market (e.g. housing, access to care services, social support, family support, education)?
  • What could be the main priorities of the new Structural Funds to promote inclusion of those groups?

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