80% employment rate: Sobering figures and a growing gap with Europe

Published on 01/07/24 by Patrick Slaets

Last year (July 2023), in the very first 'Agoria Acts' blog of our Study Centre, we called on the governmental authorities in our country to accelerate and strengthen efforts to achieve an 80% employment rate by 2030 in Belgium. Today, we are on the eve of the formation of new federal and regional governments. They will conclude important government agreements in which the labour market will play a crucial role. Exactly one year after our first call, we would like to give you an update.

Read our very first Agoria Acts blog here: Un taux d'emploi de 80% : fétichisme des chiffres ou nécessité impérieuse ? (only in French or Dutch)

Statbel and Eurostat recently published employment rates for Belgium and the European Union for the first quarter of 2024. This figure is calculated based on the quarterly Labour Force Survey conducted in all EU member states. In the first quarter of 2024, we observed a decline in the employment rate in both Belgium and Europe. This is a consequence of the economic downturn and the announced restructuring operations in many companies in the European economy. The Belgian employment rate fell from 72.6% in Q4 2023 to 71.9% in Q1 2024. The European employment rate declined from 75.5% in Q4 2023 to 75.3% in Q1 2024. What was the situation one year ago?

A year ago, Belgium stood at 72.1% in Q1 2023 and the EU-27 at 74.7% in Q1 2023. Our country has thus not made progress at all in absolute terms, and Belgium's lag behind Europe has widened further.

Employment rate (20-64 year olds) in the EU-27 in Belgium (2005-2024)

Source: Eurostat, Statbel, Labour Force Survey, Q1 2024

The above graph shows the development of employment rates in the EU-27 and Belgium over the last 20 years. Until 2014, Belgium had managed to keep pace with the rest of Europe. But from that moment, the gap with the rest of Europe gradually widened. Nevertheless, thanks to the tax shift and index jump, our country’s competitiveness has increased and we have created job opportunities at a high rate since 2015.

This pace will not suffice, however, and according to a recent medium-term forecast from the Federal Planning Bureau (2024-2029), we may not even reach a 75% employment rate by 2030. In our study "Be The Change: Nothing Is As It Seems" from 2023, we had already indicated that Belgium would likely reach only 76.5% by 2030 and that, without policy changes, the 80% target would only be reached until 2037. Due to the unexpectedly adverse development in the labour market over the past 12 months, this estimate is likely too optimistic.

Belgium is clearly not succeeding sufficiently in activating and getting the non-working and non-job-seeking population into work. This is also evidenced by our vacancy rate, which – apart from Austria – remains the highest in the EU-27 in Q1 2024, while we have the largest share of inactive individuals after Spain, Greece, Italy, and Romania.

Agoria Acts
To break this paradox, Agoria proposes implementing a labour market policy in Belgium and the three regions that:

a) Shifts the focus from supporting inactivity to encouraging people to work and look for work. In other words, we need a policy that motivates more people to seek work and start working. This can mainly be achieved by increasing the difference between working, job-seeking, and not working, and by implementing a targeted policy for specific groups.

b) Motivates even more people to train themselves continuously to be ready for new technological and commercial developments in the economy and society, especially if they are not working or looking for work.

c) Responds to new career visions and fosters flexibility.

Agoria’s memorandum 'En Route!' provides a clearly outlined path towards achieving the 80% target.