Economy
Globalization's impact on employment and the EU
Find out how much the EU aims to benefit from globalization while tackling its negative effects on employment, Economy.
Globalisation creates job opportunities but can also result in job losses. Managing globalization to make the most of it is a priority for the EU as is trying to create a more social Europe that helps redundant workers find new jobs.
Job opportunities in Europe
The number of jobs supported directly or indirectly by EU exports outside the union is continuously growing. It increased from 21.7 million jobs in 2000 to 38 million jobs in 2019. One in five jobs in the EU depends on exports.
Job opportunities aren't limited to exporting companies. They also extend to firms supplying goods and services to them.
For example, in Germany exports to non-EU countries support 7.7 million jobs. Thanks to the EU's single market an additional 1.2 million German jobs depend on exports from other EU countries to non-EU countries. In total, 20% of jobs in Germany rely on EU exports.
The share of highly skilled workers in export related jobs is increasing and export-related jobs are on average 12% better paid than other jobs.
Globalization's negative impact on employment
Globalization leads to increased competition between companies, which can result in closures, offshoring and job losses..
The most vulnerable EU sectors are characterized by a predominance of low-skilled jobs: textiles, clothing, footwear and leather, basic metals and fabricated metal products, and manufacturing industries.
Manufacturing is the sector that is the most exposed to offshoring because of competition from low-wages countries.
The Covid-19 pandemic has demonstrated the need to move the production of critical sectors and products, such as medication, back to Europe.
Offshoring trends are shifting and it now happens more in eastern European countries than in western member states. Destination countries are in North Africa and Asia.
While the overall results of international trade liberalisation are positive, some sectors are hit hard and the duration of the adjustment period needed by workers to relocate in other sectors can undermine the initial benefits.
The European Globalization Adjustment Fund
In order to reduce the negative impact of globalisation and decrease unemployment, the EU created the European Globalization Adjustment Fund in 2006. Its goal is to provide support to redundant workers who lost jobs due to globalization.
This emergency solidarity fund co-finances labour policies to re-employ workers or create businesses. Funded projects include education and training, career advice, as well as help looking for a job, mentoring and business creation.
In 2009, the fund was extended to cover job losses resulting from major structural changes triggered by the economic and financial crisis.
In April 2021 MEPs agreed to update rules so that the fund can be used to help more European workers.
The fund can be used:
1) when more than 200 workers have been made redundant by a single company and its suppliers, or
2) when a large number of workers lose their jobs in a specific sector in one or more neighbouring regions
3) to apply for a one-time investment of €22,000 to start your own business or for employee take-overs
4) to benefit from special measures such as a childcare allowance for child carers to access when taking part in training or looking for a job
Since 2007, the fund has spent €687.7 million helping about 170,000 dismissed workers. For example, the fund spent €1.2m to help 303 dismissed workers in Spain and €1.9m for 559 workers in Belgium.
More on globalization and the EU
Check out the following articles:
- Globalization: how the EU's trade policy helps to promote human rights
- The EU's position in world trade (infographic)
- EU international trade policy explained
- Facts: The benefits of economic globalization in Europe
- Social
- Social Europe: what Parliament is doing on social policy
- European Solidarity Corps: opportunities for young people
- Youth employment: the EU measures to make it work
- MEPs approve new, more inclusive Erasmus+ programme
- European Globalisation Adjustment Fund: helping redundant workers
- European Social Fund: fighting poverty and unemployment
- How the EU improves workers’ rights and working conditions
- Improving public health: EU measures explained
- The future of Erasmus+: more opportunities
- What solutions to population decline in Europe’s regions?
- A new ambitious EU Disability Strategy for 2021-2030
- Social Climate Fund: Parliament’s ideas for a just energy transition
- Social security coordination: new rules for more flexibility and clarity
- Posted workers: the facts on the reform (infographic)
- Posting of workers: final vote on equal pay and working conditions
- Gig economy: EU law to improve workers’ rights (infographic)
- Better working conditions for all: balancing flexibility and security
- Reducing unemployment: EU policies explained
- The Parliament’s fight for gender equality in the EU
- Globalisation's impact on employment and the EU
- Covid-19's economic impact: €100 billion to keep people in jobs
- Better working conditions for truck drivers across the EU
- Covid-19: how the EU fights youth unemployment
- Final vote on European Solidarity Corps
- Parliament wants to ensure the right to disconnect from work
- How MEPS want to tackle in-work poverty in the EU
- Fair minimum wages: action for decent living conditions in the EU
- Parents’ work-life balance: new leave rules for family care
- Parliament calls for measures to combat sexual harassment in Europe
- Female genital mutilation: where, why and consequences
- Understanding the gender pay gap: definition and causes
- How the EU is tackling gender-based violence
- Getting back to work after a long sickness or injury (video)
- Drinking water in the EU: better quality and access
- Accessibility: making products and services in the EU easier to use
- Disaster management: boosting the EU's emergency response
- Health threats: boosting EU readiness and crisis management
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