Herhaling - werkgelegenheid en concurrentiekracht

Initiatives to promote growth

• What goverment initiatives can promote growth through employment and competition?

Important Themes

Key questions in this module:

• What indicators describe the labor market?
• How do employment and competition contribute to economic growth?
• How do different governments contribute to desired employment and competition?

Module Goals

• Explain how government promotes competitiveness
• Explain quantitative labor market indicators
• Explain qualitative labor market indicators
• Find quantitative employment indicators in statistics
• Describe the causes of unemployment
• Outline the labor market policy of the government
• Outline the Belgian wage indexation system
• Explain the link between automatic wage indexation and current government wage policy
• Explain the link between competitiveness and R&D spending

VDAB

• VDAB: The Flemish Service for Employment
• There were 230,233 jobs listed on VDAB.be on the day this image was taken
• VDAB helps individuals find jobs and training, and orients them in the labor market
• It also helps people to upskill

The Labor Market

• Demand side: companies and government
• Supply side: families

Characteristics of Labor Market

• High volume of demand and supply
• Transparency
• Easy to join
• Labor is generally considered a homogeneous product

Labor Market as Determinant for Growth

• Considers why the labor market is a determinant for economic growth
• Employers include companies, non-profits, the government, SMEs etc
• Employees include students, professionals, tradespeople and re-entrants

Determinants of Economic Growth

• Measured by GDP per capita
• Dependent on available production capacity
• Optimization of available production capacity is important for economic growth

Factors for Economic Growth

• If all production capacity is used, economic growth isn't possible
• Investing in extra production capacity (long term) is required

Utilization Rate

• Utilization rate = rate at which production capacity is used
• Dependent on demand from families and businesses.

Labor Productivity

• Increased productivity raises production capacity
• Changes in the quality and quantity of labor can increase labor productivity
• Dependence on capital should be noted

Increase Labor Productivity Factors

• Changes in the quality of labor: Dependent on education level of families and type of education in a country
• Changes in the quantity: Dependent on the size of the working-age population and the composition

Belgian Population

• An exploration of the evolution of the size of the Belgian population
• In 2000: it was 10,239,085; In 2024: it was 11,763,650
• Source: STATBEL

Labor Evolution Consequence

• What impact has this evolution on the labor and economic markets?
• What consequences would raising the retirement age have on the labor and economic market?

Quantitative Labor Market Indicators

Indicators

• Quantitative: Objective values, generally expressed in numbers
• Qualitative: Harder to express in numbers, more subjective

Labor Market Breakdown

• Total population divides into three groups
• Under 15 years old, in labor force participation age (15-64 years), and over 65

Active Populations

• Population of working age divides into the labor force and inactive population
• Labor force divides into employed population, and unemployed population

Working Age Population

• Everyone between 15 and 64 years old
• Includes the unemployed

Inactive Population

• People between 15 and 64 years old who are not working
• People who stay at home or cannot work due to certain circumstances.
• Includes young people between 15 and 23 years old who study

Labor Force

• Everyone between 15 and 64 years old who is either: employed, or actively seeking employment

Quantitative Labor Market Indicators

• Activity rate = (labor force / population of working age) * 100
• Employment rate = (employed / population of working age) * 100
• Unemployment rate = (non-working job seekers / labor force) * 100

Actice and Inactive population

• Analyze Table 2 and answer the questions relating to the active (working and unemployed) and inactive populations
• Give the meaning of the various indicators for the third quarter for Belgium:
• Employment rate
• Unemployment rate
• Activity rate

Brussels

• How to discuss the unemployment rate in the Brussels-Capital Region compared to the other two regions.
• What could be the cause of this?

Qualitative Factors

• What role do qualitative indicators pay in the labor market?

Scholling

• Higher levels of education can mean a higher welfare.
• Higher levels can mean more labor productivity and a better competing position.
• Labor productivity = GDP/number of working hours; which shows how effectively labor is used to realize a certain output

Education

• Motivation
• Sense of responsibility
• Willingness to cooperate
• Security
• Health

GDP

• 2022 levels show Belgium had a $72.9 level of GDP, constant prices
• Refer to table 3 on page 77

Unemployment Styles

• What forms of unemployment exist?

Unemployment Factors

• Demand < Supply: unemployment rises
• Demand > Supply: unemployment drops
• There are different types of unemployment

Types of Unemployment

• Cyclical unemployment
• Structural unemployment includes: Quantitative structural unemployment and Qualitative structural unemployment
• Seasonal unemployment
• Frictional unemployment
• Hidden unemployment

Government Actions

• What measures does the government take to increase the employment rate? Actions include:
• Policy
• Reform
• Tax

Why Work

• To tackle economic and social challenges
• To secure a financially stable and affordable social security
• To add increased fiscal incomes

Activation Policy in Belgium

• To get more people in the labor force, two polices are used:
• Federal government employment policy (government agreement)
• VDAB (works to increase this in any of the job seeker's benefit)

Arizona Reforming Labour Market

• The Arizona government aims for an employment rate close to 80 percent
• The state of Arizona is attempting to reform the state labor market.
• The government will raise worker standards, with tax and wealth being generated if the plans are successful.

Work Force Rise Means

• The number of people in a job needs to rise to help lift this
• The labor market paradox is the imbalance between unfilled vacancies and the large group of job seekers who are long-term and low-skilled unemployed.

Labor Movement

• There is a need for employment from non-European regions, but many are unemployed
• Should there be an initiative to source more migrant workers to address unfilled vacancies?

Economic State

• Economic state and how research can contribute to a great competitive position within the employment sector.
• Competitiveness: Is the capacity of the labor market to develop to a great standard

Innovation Factors

• Can businesses help stimulate competitiveness?
• Businesses can help with innovating with products, and making them efficient