A higher employment rate runs like a common thread through the policy of the Flemish and federal government. The ambition is to increase this to 80 percent. “At the current rate, Flanders will achieve just 79.9 percent by 2030,” says Leuven professor and coordinator of the Work Steunpunt Sarah Vansteenkiste.
In some regions, such as West Flanders, this 80 percent has already been achieved and labor shortages are a particular problem. In 2022 (the last year with a full annual figure), the Flemish employment rate among the population between 20 and 64 years was almost 76.7 percent, compared to 71.9 in 2014.
In Brussels and Wallonia, that percentage will remain around 65 percent in 2022. A report from the Work Support Center shows that the employment rate in Flanders is still considerably lower among disadvantaged groups, such as people with a migration background or disability and the over-55s, but has also steadily increased.
Swedish uses the carrot and the stick in its labor market policy. Such a carrot is the target group reductions, a reduction to encourage employers to employ difficult-to-reach groups. After the sixth state reform, these reductions became a regional matter. Flanders made significant cuts and focused on low-skilled young people, the elderly and people with a work disability. Last year, the Flemish government decided that the target group reduction for older employees will disappear. After all, science doubts the effectiveness of these reductions. Labor economists have the same doubts about the Flemish job bonus, a tax reduction for lower wages.
In the meantime, we see that work, or at least the commitment to look for it, is increasingly linked to social benefits such as social housing or a place in daycare. “That can also be an obstacle to looking for work,” Vansteenkiste notes.
To encourage the long-term unemployed, since last year they can be obliged to do community service. But that is not a great success. There are only a handful of employees in that system, Minister of Labor Jo Brouns (CD&V) had to admit at the end of last year.
It remains difficult to filter out the precise impact of that Flemish policy on the employment rate. “Because federal policy, the economic situation and especially demography also play a role,” says economist Gert Peersman (UGent).
Meanwhile, an audit shows that the VDAB, the most important actor in Flemish labor policy, is insufficiently equipped to guide the group of inactive people (such as people on a living wage and the long-term sick) (back) to the labor market. However, this is necessary to make the final leap to 80 percent, because Flemish unemployment is historically low.
