TIME EUROPE
May 8, 2000 VOL. 155 NO. 18
Europe's Jobs Challenge
Lots of people need work. Lots of companies need workers. So why aren't they hooking up?
By JAMES GRAFF Brussels
Since the age of steam, the european labor movement has mustered the red flags and brass bands of May Day for a traditional show of strength. But as the union ranks gather this year, they don't face a classic battle for solidarity and a fair wage as much as they do a new specter haunting Europe in the information age — a labor paradox of a sort Karl Marx never envisioned. At a time when 15 million people are registered as unemployed in the European Union, millions of jobs go begging for lack of qualified applicants. At the beginning of the 21st century, it seems, the best encapsulation of the Old World's labor plight comes not from Marx, but from the English poet Samuel Taylor Coleridge: "Water, water, everywhere,/ Nor any drop to drink."
There is no technological fix for closing the jobs gap. Chip capacity may double every 18 months, but there's no Moore's Law for labor, in Europe or elsewhere. Europe's jobs dilemma, most experts agree, is grounded in an inflexible education system, high labor taxes, and barriers to mobility. The chronically high number of jobless — roughly half of whom have been out of work for more than a year — is just part of the story. "There are twice as many people in Europe who would work, if work were available, than there are people currently recorded as unemployed," European employment Commissioner Anna Diamantopoulou pointed out recently. Leaders have begun to recognize the vital need for Europe to put that vast potential to use. That means promoting lifelong learning, lowering taxes on labor, and making work a paying proposition for the many Europeans who choose not to. Europe's overall fiscal health and strong growth prospects present a golden opportunity to tackle these reforms. Says European Commission President Romano Prodi: "We must act now, because the challenges facing us cannot wait."
The employment mismatch hits Europe coming and going. As E.U. countries spend billions on unemployment benefits and welfare, they also fall behind in the struggle to trim their sails for the Information Society. The number most often bandied about at the recent "dotcom" E.U. summit meeting in Lisbon was 1.7 million — that's the shortage of information technology professionals Western Europe will face by the year 2003, according to a study by International Data Corporation commissioned by Microsoft. European firms currently provide only 25% of the E.U.'s information technology needs, according to the European Commission, and American companies gladly fill the gap.
But it isn't just on the new frontier of the Information Society that workers are missing; there aren't enough hod carriers either. In France alone, as many as 50,000 construction jobs are unfilled, and there are another 20,000 or so open for truck drivers. Europe does not have enough accountants, welders or machine-tool operators, and as traditional production sectors become more service-oriented, there is a crying need for people with advanced technical skills who can also talk intelligibly to clients. University enrollment has dropped to below replacement levels for highly qualified but unglamorous professions like chemical and metallurgical engineers.
The result is a two-speed labor market that leaves millions of poorly qualified unemployed standing in a cloud of dust while those in demand speed past. For those in the fast lane the pickings are rich. "Businesses have to understand what many employees already know — that in a dynamic economy and labor market, employees have the ball," says Mercedes Saddier-Chetochine at the Association for the Employment of Managers in Paris.
Small employers like Jean Lathouwers, president of software producer LSA Delta in eastern Belgium, are learning that lesson painfully. "We have to pay new people more than they're worth," he says, "and the last to come are the first to go. We're moving toward a real American situation, and we're not ready for that." He says larger IT firms spoil the market with exorbitant salaries, but even giants face problems. "Not long ago candidates had to sell themselves," says Jan De Haes, human resource manager for Hewlett Packard Belgium. "Now we tell our recruiters to go into sales mode." Still, he has 58 open positions for everything from programmers to receptionists — right in Brussels, where the unemployment rate is 17.5%.
The shortage of IT workers isn't going to evaporate anytime soon, despite the burgeoning development of "application service providers," which can handle many back-office tasks for strapped companies online — and increasingly offshore. Andrew Parker, an analyst for Forrester Research in Amsterdam, recently surveyed chief information officers throughout Europe and found that 90% of them expressed concern that the lack of qualified personnel could have a tangible impact on their businesses. "Everybody is feeling some pain," he says.
No one was caught as flat-footed by the rush to e-commerce as Europe's educators. Employers throughout Europe bemoan the inadequate flow of technically literate graduates. Belgian universities turn out some 2,000 computer science graduates every year; the demand is closer to 6,000, says Karel Uyttendaele, director of Fabrimetal, an employers' federation that includes the IT sector. German universities have upped their capacity for IT students from 13,000 two years ago to 40,000 today, but that is still not enough, argues Ullrich Heilmann of the Rhine-Westphalia Institute for Economic Research in Essen. "The way it is now, you have professors standing in huge lecture halls talking to nobody about things nobody cares about, while IT courses are overfilled," he says. He calls for the creation of a system that forces universities to compete to be more responsive to the job market. MORE
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May 8, 2000
COVER
Europe's Jobs Challenge
Lots of people need work. Lots of companies need workers. So why aren't they hooking up?
Staying Put
For many Europeans, there's no place like home
European Innovations
Europe's on-the-job education revolution
EUROPE
Crime Busters
With the arrival of a new task force in Hungary, the FBI steps up its fight against organized crime
Viewpoint
The euro's current woes reflect Europe's structural economic problems
Viewpoint
The U.N. hopes to ease the woes of the world, but it cannot keep the peace
MIDDLE EAST
No News Is Bad News
Jittery after recent reformist wins, Iran's hard-liners shut down the country's liberal press
AFRICA
Back to the Future
Johannesburg's criminal reputation is only half the story as this city starts to rediscover its buried gold
BUSINESS
Wired for Competition
Europe's sports websites compete just as hard as the teams they cover in order to win in cyberspace
Forcing Open the Market
Brussels plays the heavy to try to break telecom monopolies and allow high-speed Internet access
SCIENCE
Brave New Cells
Despite a U.S. government ban, research on "cure-all" embryo tissue widens
FASHION
Battle Deluxe
Titans LVMH and Gucci vie for dominance in the fashion world
Tommy Hilfiger
From new wave to wavering
DEPARTMENTS
Techwatch
World Watch
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