1
Work and poverty an SME perspectiveHelen
HoffmannAdviser for Social Affairs,
UEAPMEEESC Public Hearing Work and poverty
towards the necessary holistic
approachBrussels, 17 June 2009
2
Overview

• UEAPME
• SMEs in Europe
• Comment crisis
• Complexity of in-work poverty
• Key factors influencing in-work poverty
• Conclusions

3
UEAPME

• European association of crafts, small and
  medium-sized enterprises
• 83 member organisations representing 12 million
  enterprises
• One of the four European Social Partners
• UEAPME negotiates and signs various agreements,
  e.g. current negotiations by European social
  partners on an Inclusive Labour Market

4
SMEs in Europe

• European SME definition 250 employees
• 25 million enterprises in EU 99.8 SMEs
• SMEs and crafts provide 2/3 of all private sector
  jobs contribute to 50 of European GDP
• Average 6.8 employees
• 90 micro-enterprise, with fewer than 10
  employees

5
Comment crisis

• Currently challenging economic downturn Need to
  tackle economic and social consequences.
• SMEs are strongly affected struggling to keep in
  business
• SMEs are more reluctant to lay off staff
• Supportive labour market instruments, e.g.
  short-term work schemes, flexible working
  arrangements to maintain workers
• Balance short and long-term measures to avoid
  spiralling long-term costs and consequently more
  poverty

6
Complexity of in-work poverty

• Active social inclusion based on three pillars
  integrative approach
• Complexity of in-work poverty
• - Employer focus on work related factors of the
  individual
• - Structural problem
• - Job is still best protection from poverty and
  social exclusion

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Key factors influencing in-work poverty (1)

• Factors relating to employment
• Make work pay
• - Set incentives for the individual considering
  interplay between tax and social security systems
  
• - Evaluate effects on individual and household
  context
• - e.g. France and UK RSA, working family tax
  credits
• Rigidity of labour markets
• - Contracts not sufficiently flexible for
  employers
• - Need to provide right framework for employers
  to encourage them to provide employment security
  as part of flexicurity
• Lack of accessible and affordable childcare
• - Support work-life balance

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Key factors influencing in-work poverty (2)

• Factors relating to the individual
• Skills and employability
• - Often lower skilled individuals affected by
  in-work poverty
• - Segmentation of the labour market
• - SMEs cannot upskill/retrain individuals alone
  gtneed shared responsibility and innovative ways
  of cost sharing
• - Need better recognition and validation of
  non-formal competences
• - Social economy can and should be a stepping
  stone in a standard labour market

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Key factors influencing in-work poverty (3)

• Factors relating to the individual
• Attitudes to work
• - Aspects relating to behaviour and commitment
• - Requires supportive environment within
  enterprise, but also external structures expert
  coach/mentor
• Lack of mobility
• - Finding more suitable work, e.g. moving from
  part-time to full time
• - Geographical mobility
• - Sectoral mobility

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Conclusions

• Requires individual solutions and adapted
  measures due to complexity
• Need to balance requirements of individual with
  competitiveness of companies
• SMEs are socially responsible as locally embedded
  - part of business as much as productivity and
  finding new markets
• Requires local and regional partnerships (social
  partners, public authorities etc) with a sectoral
  dimension
• Making work pay interplay of tax and benefit
  systems
• Making transitions pay creating pathways to
  facilitate transitions as part of life-course
  policies
• Need to ensure minimum income through different
  sources

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Thank you for your attention!
Helen Hoffmann Social Policy Adviser UEAPME E-mail
h.hoffmann_at_ueapme.com Tel [phone]
99 Fax[phone] www.ueapme.com