On behalf of the committee, I welcome Mr. Juan Menéndez-Valdés and Ms Mary McCaughey, who are present on behalf of Eurofound to give us a presentation on its activities and priorities. This is meant to be an information session. As such, while we will take some questions afterwards if any arise, we will try to limit those.
Activities and Priorities of Eurofound
Mr. Juan Menéndez-Valdés
I thank the Chairman, Senators and Deputies. I will start by expressing our gratitude for inviting Eurofound to present some of our priorities and activities, particularly given the fact that we are the only European Union agency that was established in Ireland.
As members may know, Eurofound is the short name for the much longer and nicer title of the European Foundation for the Improvement of Living and Working Conditions. This name reflects one of the key objectives, if not the key one, of the European Union project. We provide knowledge, information and evidence that is likely to assist in the development of social and work-related policies that can lead to the improvement of the quality of life and work in Europe. We work in a number of areas, those being, the labour market, unemployment policy, working conditions, industrial relations and social policies. These are our core areas of expertise in which we focus our research and communication activities.
We have compiled a word cloud containing a number of words that have been key to debates in the European Parliament. I am sure that discussions on employment are also central to debates in the Houses of the Oireachtas. These words are at the heart of Eurofound's research activities. We wish to present a number of our findings of comparative information to highlight some of the data as they relate to Ireland so that members might have a flavour of the kind of information that we can provide and that would support members in their work as policy makers.
I will start with a basic figure on life satisfaction. Members are probably more than aware that they are living in a country where people are reasonably satisfied, certainly more so than the European average of 7.1 on a scale of one to ten. Like my country of Spain, Ireland is above the average, but we are both below the level of the Nordic countries, which have the highest levels. For example, Denmark has a level of 8.4.
A number of elements are relevant for life satisfaction. One is satisfaction with family life, which is pertinent for Irish citizens. Ireland ranks close to the top of the comparative information with 8.4, whereas the EU average is 8.2. If I understand the situation correctly, this point is highlighted by the number of debates the Houses have on supporting families, welfare assistance and public services. We know from our research, particularly our analysis of the European quality of life survey, that the perception of the quality of public services has a stronger impact on trust in governments than the perception of economic performance does. Members have mentioned issues of disengagement and trust. These are matters that we explore through our quality of life surveys. Members can see a screenshot of our survey mapping tool. They can go to our website and, question by question, check how Ireland compares with other countries on different aspects. In terms of trust in government, for example, our last survey two years ago showed the European average to be 4 whereas Ireland's rating was slightly below that and significantly below that of the top country, which had a rating of 6.9.
I will show the committee three different public services in which Irish citizens' perceptions were compared with those of citizens of other European countries. In terms of child care, the European average is 6.2. Ireland is close to this at 6. In the perception of the quality of health services, Ireland's rating of 4.9 is below the European average of 6.3. However, Ireland rates above the European Union average in terms of the perceived quality of the education system.
The European average is 6.3 while Ireland’s is 6.8, the same as the United Kingdom.
Employment is also at the centre of our research. We examined structural changes in the labour market in Europe and in individual member states during the recession, taking into account the kind of jobs created or destroyed, whether wages are high or low, job quality and educational attainment of jobholders. More than 5 million jobs were lost in the recession between 2008 and 2010. These were concentrated in the middle and low-paid sectors, a pattern followed in Ireland. Since 2011, Ireland has returned to job creation but most of them are middle and low-paid jobs.
How do wages in Ireland compare with those in other member states? During the recession, wages in Europe dropped but Ireland is still among those with higher level salaries. Compared with others in Europe, Ireland has the seventh highest wage distribution. If this was not adjusted to take into account the cost of living, Ireland would have the fourth highest.
Would it be just behind the Benelux countries?
Mr. Juan Menéndez-Valdés
Yes, it would. Wages are one relevant factor in determining job quality, but they are not the only one. One has to bear in mind working time flexibility, health and safety and other factors. Through the Europe-wide working conditions survey, we examine job quality through various criteria. The good news is that in Europe more than half of jobs can be called good jobs. In Ireland, the news is even better because 61% of jobs can be described as good. However, there is a cluster of bad jobs where the prospects to retain people in the labour market are relatively low. In the European Union, these types of jobs average 21% while in Ireland they come to 23%.
Does this refer to employment conditions and wages?
Mr. Juan Menéndez-Valdés
Yes. We consider wages as one element and career prospects and job stability a second element. Intrinsic job quality is the third one involving autonomy, health and safety and social support. The fourth element is about working-time quality.
We also work on youth unemployment and calculating the economic cost for society of young people not being in employment, education or training, NEETs. The Irish Government, when holding the Presidency of the Council in the first half of 2013, used our figures on the economic costs of NEETs to convince hesitant member states to agree the Youth Guarantee in April 2013.
Our role is to support policymakers at European and national level. Policymakers from Ireland can visit our offices which are based in south Dublin, roughly 10 km from here. We have 100 people from 21 different nationalities working there. The organisation will be 40 years old next year. Then we will have the opportunity to co-ordinate the whole network of 40 European Union agencies involved in our work.
If, say, Senator Colm Burke had an individual project with which he wanted some help, could he approach Eurofound to carry out research for him or would it have to be on behalf of the whole committee? How could one or a group of committee members commission research from Eurofound? Would it be pro bono or would funding have to be provided?
I welcome the delegation from Eurofound. In the work I have done on youth unemployment and the Youth Guarantee, I have relied extensively on the research conducted by Eurofound. It is working on how the Youth Guarantee is implemented in member states. In Ireland, funding for the programme will be front-loaded for 2014 and 2015 but no evaluation of its effectiveness will take place until the end of 2015. There is the danger that by the time issues or problems are identified, the money will already have been spent. When will Eurofound’s research on this programme be published? What variables and indicators is it using in its assessment? The Ballymun pilot is under way and it will be evaluated. However, there are concerns as to how this will transfer from an urban area which has much infrastructure and cross-agency co-operation to a rural area which might not traditionally have those structures and supports.
I thank the delegation from Eurofound for its presentation and the documentation that accompanied it which is phenomenally interesting. What is the composition of Eurofound, as I note it is a tripartite agency?
Mr. Menéndez-Valdés spoke about increasing labour market participation, combating unemployment by creating jobs, improving labour market functioning and promoting integration. Is the latter referring to European integration or attempts to deal with cultural diversity?
What is the timescale for Eurofound’s report? How many people were surveyed in Ireland and other EU member states? The quality of jobs was referred to, which is a difficult issue for us. The numbers on the live register in Dublin South West, the constituency which I represent, have been dropping over the past several months.
The number on the live register has been dropping for the past few months which would suggest more jobs are coming on stream but we have also changed how we quantify jobs - people might be on schemes and so on. One cannot compare the system last year with this year. Our difficulty is that we do not know the quality of the jobs. There is no way within the current structures to measure that.
I am interested in what Mr. Menéndez-Valdés said about people’s satisfaction and their trust in public services. If the survey is done at a specific time, for example, in respect of education, if one’s child is returning to school in September and one has to buy a uniform and books, one’s satisfaction with that system would probably be skewed. Are there other factors we can take into account? He says Ireland is above average, relative to other European countries, in offering poor quality jobs, scoring low in terms of pay, prospects, intrinsic job quality and so on. Does he have any idea why? Do we encourage a race to the bottom?
I thank Eurofound for its report. Am I correct in saying our wage and salary levels are in the top six or seven in Europe?
We have high costs in getting a product to the market because so many of our exports go to the European market. Do we need to be careful to make sure we keep our competitive edge over other manufacturers and producers, for example, in the pharmaceutical area? Has there been any analysis of other cost factors by comparison with other countries, such as the cost of insurance, commercial rates and so on?
Eurofound states that we are slightly above average in providing jobs at the low end of the market. Is that percentage growing? If so, we would be concerned about it. We need to keep the low-wage areas in mind when planning social policy.
Mr. Juan Menéndez-Valdés
I thank the members for all the questions. In response to the question about the composition of our governing board and how we decide on our work programme, our governing board decides on a four year programme. The board is appointed by the European Commission through the Directorate General for Employment, Social Affairs and Inclusion, and three representatives from a member state. That is the tripartite approach. We have a representative from the Irish Government, unions and employers. That is the composition in all member states.
They decide our work programme every year but we reserve the capacity to reply to questions presented by a member state or the European Parliament or the Commission. Committee members may recall that the Irish Government requested a report on minimum wages at the start of the crisis when some of the conditions of the memorandum of understanding affected the minimum wage. I was not the director of Eurofound at the time but that was a customised report. We can do a short report on demand free of charge and relatively quickly, if we have the data. We can also develop a full project. We have a limited capacity to do two or three on demand per year if it is meaningful for the European debate and we can start a full research project but the results of that are presented only one year later. If one wants that for a debate in five months’ time it will probably not be ready but members should feel free to come to us.
Is it possible for the committee or individual members to go to Eurofound?
Mr. Juan Menéndez-Valdés
Yes. They can contact us directly or through the governing board members, which is easier. If we have the capacity and expertise to do it we will want to do it because we measure our performance by counting how our work is used in policy-making, primarily at European level but also at national level.
The project on the Youth Guarantee is being implemented at the moment and we will publish the results probably in the first half of next year. We are trying to have enough examples of model countries, such as the Nordic countries and those which face bigger challenges.
We use the word "integration" to mean inclusion. I do not know which context the Deputy’s question referred to but it involves integrating different collectives.
It was an academic question. Does it refer to the integration of the European workforce or of diverse communities in Europe? Eurofound is a tripartite European Union agency providing knowledge to assist the development of social and work-related policies, one of its objectives is increasing labour market participation and combating unemployment by creating jobs, improving labour market functioning and promoting integration.
Mr. Juan Menéndez-Valdés
These long titles for our priorities are the compromises on the negotiations in our governing body. That integration refers to integrating people in the labour market, mainly for people who are inactive and unemployed.
Surveys are very expensive. We run them not only in the 28 member states but also in the candidate countries and we repeat these every four or five years. A number of the questions on the last quality of life survey, in 2012, are repeated in the Eurobarometer every year. We can monitor some trends and we will repeat the European working conditions survey next year. Normally the field work takes approximately three months and yes there can be events at national level that influence a particular reply.
We cannot control this from Eurofound for 28 member states, but sometimes if it is in a particular moment, I can understand that some of the questions are not as expected. Many of these indicators are rather stable, however, including life satisfaction, quality of public service. Yes, there is austerity and very little growth, but Nordic countries were always on top there and we have other countries in a different situation.
The next slide deals with wages. Ireland is seventh just below Austria, Belgium and the UK. If not adjusted to the cost of living it would be fourth - even higher. While salaries are high, prices are also high. It has an impact on Ireland's competitiveness as it would have on any country. It is not the only factor. There are others that Ireland can use to compete, including having a well-qualified and well-educated workforce that is English speaking. Certainly it is an element that I included in my presentation because it is relevant when comparing the 28 member states and talking about the European market.
On the number of jobs and whether they are being created at the lower end, in this slide the blue box shows the most recent job creation across five wage groupings from low-paid through medium-paid to the high-paid. The creation is in the medium and medium to low-paid jobs at the moment. One must bear in mind that it was there that the job loss was concentrated because of the job loss in construction and manufacturing. We will be doing a report on the future of manufacturing in Europe. We want to look at some elements, including the labour cost in Europe compared with other areas in the world.
The biggest difficulty we have in trying to map this is that, particularly in Ireland, we do not know whether they are new jobs or jobs as a result of emigration. Is emigration a factor that Eurofound takes into account in this survey, because in some European countries it would not be as high as it is in Ireland, which is part of the difficulty?
Mr. Menéndez-Valdés talked about the 51% good jobs. How does Ireland compare with the rest of Europe when it comes to those higher salaries? Does Mr. Menéndez-Valdés have figures for that?
Mr. Juan Menéndez-Valdés
I can go back to that. First, this is net job creation so we are not counting the migrants. This is analysis based on the data of the labour force survey. These are actual interviews of workers. We are looking at where the net job creation is concentrated and at the moment it is in medium and low-paid jobs. Before and during the crisis it was the highly paid jobs that were very resilient. All the job destruction during the crisis in construction is shown by blue bars going down there. During a wave of recovery it is the same kinds of jobs that we had before. Wages represent one element of job quality - the best jobs have the highest wages - but it is not the only one. Good jobs related to the IT sector in Ireland represent an important share.
If Mr. Menéndez-Valdés is looking for suggestions, that would be useful for those high-paid jobs. People might say that in Ireland the salaries are higher, particularly those who are very well paid compared with other areas in Europe.
Mr. Juan Menéndez-Valdés
The net job creation in Ireland is concentrated among agricultural workers, professionals, metal machinery workers, service workers, food processing, food and beverage, some IT as well, clerks in retail, cleaners, helpers and clerical support in public administration.
I thank Mr. Menéndez-Valdés and Ms McCaughey for giving us their presentation. It is good to know they are out there. We will certainly be looking through the committee's work programme and may seek Eurofound's help at some stage in the future.
We will meet again on Tuesday when we will be preparing for COSAC.
The joint committee adjourned at 3.55 p.m. until 2 p.m. on Tuesday, 25 November 2014.