1 - Introduction: Why Is Employer Engagement Important?

Summary

For centuries governments have been exercised by the challenge of how to deal with individuals in the population who are not in paid labour. It is a highly politicized issue, cutting across a range of policy domains including macro-economics, labour markets, social security, education and health. In the early part of the 20th century countries in the Global North introduced some form of public employment service provision, or ‘labour exchange’ (Price, 1998). Active labour market policies (ALMPs) as we now know them first emerged in the 1950s in Sweden under what is known as the ‘Rehn-Meidner model’ after the two economists who conceived them (Bonoli, 2010). Their aims were equality of wage distribution, sustainable full employment, modernization of Swedish industry and addressing the recurrent problem of labour shortage. The idea of ALMPs subsequently spread to France, Italy, Germany and elsewhere. Following the 1970s oil shocks and economic depression, there was a shift away from ‘activation’ aiming to provide occupations and activities for jobless individuals and to address mass unemployment, as well as temporary jobs and training programmes in the public sector, amounting to job creation.

These early indicators of the importance of the demand side of labour markets (employers) were largely left behind in the 1990s when a ‘new wave’ of ‘active labour market policies and programmes’ emerged. The diffusion of ALMPs across countries was aided by supra-national institutions such as the European Commission and the OECD promoting ALMPs as key policy solutions (Ingold and Monaghan, 2016), leading to some considerable convergence in the direction and focus of them. However, there was also a ‘reorientation’ of ALMPs away from the goal of job creation and towards incentivizing work over ‘welfare’ and providing employment assistance to address what was perceived as the key policy problem: the mismatch of workers with jobs. This inevitably led to a shift away from ‘passive’ public spending on cash transfers through social security benefits towards supply-side measures oriented around increasing the ‘employability’ of individuals by ‘activating’ them for work.

ALMPs have historically been provided by the public employment services (PES), but the contracting-out of services to for-profit and non-profit organizations is now a feature across a variety of countries.