Europe's welfare-to-work business

In Europe, thousands of 'companies for jobs' are trying to teach marginalized young people and the long-term unemployed how to work

In the 15 member-states of the European Union, the average unemployment rate is nearly 11 per cent, with big variations between countries. But there is plenty of work, especially in the area of the "social economy".

This sector, which accounts for 6 per cent of all jobs in Europe, includes firms and organizations whose aim is not just to maximize their profits. They are keen to increase the quality and accessibility of their products in addition to the well-being of their members and employees, especially by raising their level of education and training.

Many of them aim more specifically to help the most marginalized people to build up skills and work experience before they get a regular job. This involves two main groups: young people who may never have worked and older long-term unemployed people. Most of the latter are men, many of whom worked in traditional industries and who find the skills that gave them status are no longer in demand.

They often have multiple problems, ranging from educational failure to family and housing problems and alcohol or drug abuse. Many dropped out halfway through their secondary schooling and have difficulty reading and writing. But they all have their own abilities and skills. They should not be treated as victims but as people who can take responsibility for their own future given proper support.

Unemployment rates in the 15 European Union countries

Unemployment rate                                         Total
(15- to 24-year-olds)                                 unemployment

21.2%                          European Union             10.8%
21.3%                          Belgium                     9.0%
8.1%                           Denmark                     5.4%
10.7%                          Germany                     9.9%
31.0%                          Greece                      9.6%
39.2%                          Spain                      20.9%
29.0%                          France                     12.6%
15.9%                          Ireland                    10.2%
33.6%                          Italy                      12.4%
7.3%                           Luxembourg                  2.5%
9.7%                           Netherlands                 5.5%
7.6%                           Austria                     5.1%
14.1%                          Portugal                    6.6%
35.4%                          Finland                    15.0%
21.9%                          Sweden                     10.4%
13.6%                          United Kingdom              7.1%

A stepping-stone to the job market

All over Europe, the welfare-to-work schemes through training and work experience which sprang up in the 1970s have blossomed in the 1990s. They aim to help people move out of joblessness and into a form of supported employment with training.

A study of six countries published by the European Union and the French Committee of Welfare-to-work Companies (CNEI) reported last year that there were tens of thousands of schemes of this kind in existence(1). They accounted for more than 280,000 jobs, a drop in the ocean compared with the number needed. They were also temporary jobs - short-term contracts ranging from a few months to a couple of years. They are not ends in themselves. Welfare-to-work schemes are not meant to create jobs but to be a stepping stone to the job market. They could be called "companies for jobs".

Their name, role and method of funding vary from country to country. They usually get some support from local, regional and national governments and some of them work in partnership with private firms and trade unions. They take the form of co-operatives, mutual societies, associations, foundations and charities.

In Scotland, for example, the Wise Group provides jobs in the intermediate labour market - jobs that range from renovation of run-down estates to home insulation and forestry. Participants receive a wage and have to learn the discipline of work - keeping regular hours and making a commitment.

In Germany, a new kind of employment and professional qualification company ("Beschaeftigungs und Qualifizierungsgesellschaft" - BQG) has emerged since reunification, mainly in the former East Germany as a result of the mass sackings that came with privatization.

In France, the government provides incentives for about 800 welfare-to-work companies ("entreprises d'insertion") which have the difficult task of balancing their books and winning orders in competition with "normal" firms at the same time as hiring jobless people at the end of the road and marginalized young people. "Intermediary associations" and "neighbourhood committees", mainly concerned with community activity in poor suburbs and with providing local services, are also growing.

In Italy, laws are encouraging the development of some 2,500 "social cooperatives". In Spain, about 1,000 welfare-to-work schemes are operating, along with 500 "special job workshops."

All these enterprises work mainly in the building trade and the services sector, but also in improving the environment, recycling, vehicle repair and restaurants. Some are even breaking into innovative sectors such as communications and biotechnology.

Gaining vocational skills is important. The jobs of the future will be highly skilled jobs with a strong technology component and will involve contact with people. But "companies for jobs" do much more than teach their employees how to paint houses, plant trees, repair computers or look after old people. They offer experience of the world of work.

Job insecurity

Thierry Delavaux, who runs a welfare-to-work firm in a Paris suburb, says: "You have to focus both on know-how and on how to behave. A young person can learn to hammer nails in perfectly, but that won't be any good if he turns up for job interviews with a walkman on his head."

Employers need people who are "job ready", people they don't have to teach how to read, write and count, how to be motivated and to communicate with fellow workers. The first things these job-seekers have to learn are getting to work on time, meeting deadlines and working in a team. Sometimes they have to be encouraged to buy an alarm dock, helped to plan the route to their workplace by public transport, and even need to be accompanied to work for the first few days.

In a world where professional careers are constantly changing, they also have to be taught how to adapt to new and flexible working conditions - repeated short-term contracts, working from home and wider use of information and communication technologies.

This is especially important because those who find employment after a welfare-to-work scheme (less than half of the total) often move into insecure jobs with low wages and poor prospects.

1. Des pratiques differences, une volonte commune. Les "entreprises sociales" et la lutte contre l'exclusion dans six pays de l'Union Europeenne ("Different practices, a common will. 'Social firms' and the fight against exclusion in six EU countries"). The study, published in 1997, covers Germany, Austria, Belgium, Spain, France and Italy.

Simon Wilson is a British policy analyst and consultant. Thierry Jeantet is a French expert in social economics and author of l'Economia Sociale in Europa (Ed. Liocorno, Italy, 1999).

COPYRIGHT 1999 UNESCO
COPYRIGHT 2004 Gale Group