UofT G7 Information Centre.G7 Jobs Ministerial Conference, Lille, France, April 1-2, 1996

G7 Jobs Ministerial Conference, Lille, France, April 1-2, 1996

On this page: [ Conclusions | Section A | Section B | Section C]

Conclusions of the Chair

Labor, Economics, Commerce and Finance Ministers from the G7 countries and the President and Commissioners of the European Union met in Lille on April 1 and 2, 1996 at the invitation of the French Chair.

Building upon the momentum created in Detroit, this Jobs Conference gave us a golden opportunity to enhance our collective thinking about a set of questions--how to enhance growth, how to create a better framework for more jobs, how best to fight against social exclusion--which are at the heart of the concerns of the G7 countries.

The discussions of the past two days were very fruitful. They reinforced our conviction that to restore confidence and lay the groundwork for a healthy recovery, it was crucial to reach a consensus on the challenges facing our economies.

The development of a more global economy and advances in information technology are an engine for new economic opportunity and prosperity, but may also be seen as a source of dislocation and insecurity. Our challenge is not to slow the pace of change and erect barriers, but rather to encourage economic institutions and policies that ensure all our citizens can seize the opportunities to compete in the global economy and to master the technologies of the new century.

We do not need to choose between worsening unemployment and widening income inequality. We must achieve both economic growth and a widely shared prosperity. We recognize the crucial role of the private sector for achieving these goals. Although there is no single solution that fits all our various situations, during this Conference we learned from each other's experiences. Meeting these challenges cannot be achieved by labor policies alone--the robustness of the employment environment reflects the interaction of labor market policies with macroeconomic policies, structural policies, technology policies, trade policies, education and training policies, and welfare policies.

To meet these challenges, we will have to:

create the conditions for sustainable employment growth through appropriate macro-economic policies;
ensure well-functioning markets, including labor markets;
encourage the emergence of the jobs of the future by improving the adaptability of our economies and making them more responsive to change;
make sure that growth benefits everyone, especially the most vulnerable workers, whose situation has often deteriorated over the past fifteen years.

This enterprise will take time and effort. In the process, far-reaching reforms will often be needed. These reforms will be all the more effective if they are able to receive strong and widespread support, in a climate of renewed partnership, confidence and hope, and if they are carried out with the active involvement of employers and workers.

Strong growth will undoubtedly help to reduce unemployment. But much will still remain to be done to address the structural problems which impede job creation and income growth.

A - Creating the conditions for sustainable growth and strong job creation.

1. Vigorous, sustainable and non-inflationary growth can only be achieved in the context of healthy public finances. The G7 countries must therefore endeavor to control public spending more effectively in order to reduce their deficits. Cuts to Government expenditures should be carried out in the most efficient way, taking into account policy priorities, especially those that improve employment prospects. Reducing deficits will help to create a more favorable climate for private investment and income growth, against a background of moderate interest rates.

2. We reaffirmed our commitment to pursuing open trading policies because of their beneficial contribution to increased prosperity, employment and higher wage jobs. To that end, we call on trade ministers to maintain the momentum of trade liberalization through the World Trade Organization (WTO) at the WTO Ministerial Conference in Singapore in December. We also noted the importance of enhancing core labor standards around the world, and examining the links between these standards and international trade in appropriate fora. Therefore we await with interest the completion of the studies currently underway at the OECD and ILO on the social dimensions of international trade.

[Top of Page]

B - Fostering the emergence of the jobs of the future.

3. As experience over the past fifty years has shown, the introduction and diffusion of new technologies is good for growth and employment. Governments can play an important role in facilitating innovation in the private sector and the dissemination of new technologies. With this in mind, we wish to draw attention to the following points:

nowadays, the greatest number of quality jobs is being created in the dynamic, innovative sectors, particularly in the information technologies;
moreover, firms that use advanced technologies grow, hire, and pay more and survive longer that other firms;
efforts should be made to encourage the dissemination of technological innovations, notably in the direction of small and medium-sized enterprises (SMEs), which create large numbers of jobs.

4. We fully realize that fostering entrepreneurship can play a crucial role in helping to create plentiful, quality jobs. Within this context, special attention should be paid to SMEs and to service activities:

if we are to realize the job-creating potential of our economies, it is extremely important to modernize our regulatory framework, especially in the markets for goods and services. Wherever the need arises, adjustments should be made to certain regulations if they are no longer appropriate to present circumstances. The work of the Secretariat of the OECD on the modernization of the regulatory framework and its economic consequences will be extremely useful in framing future policies. This work should be pursued actively;
we are fully aware of the value of service activities, which create many good jobs, ranging from environmental protection to jobs associated with the needs of an aging population, of households, or the dissemination of information and communications;
particularly in regions where unemployment is high, favorable business conditions, better cooperation between relevant segments of society, and the development of human resources, at the entrepreneurial and labor level, are needed in order to attract investment, foster the role of SMEs, and create jobs;
the globalization of trade and the expansion of the new information technologies must not leave SMEs behind. That is why we welcome the project entitled "A global market place for SMEs" which originated in the Brussels Conference on the Information Society. In order to help SMEs invest in new markets and innovative activities, their access to capital, and especially venture capital, must be greatly improved. This applies to the European countries in particular.

5. Investing in people is just as vital as investing in capital. The most successful economies and societies will be those that focus on the long term, by investing vigorously in training for their workers. With that in mind:

it is essential to provide a framework in which young people can acquire a sound basic education and familiarity with the workplace. Everything should be done to ensure the smoothest possible transition from school to work;
each worker should have access to vocational training and upward mobility, in order to be able to adapt to economic and technological changes. For each individual worker, vocational training is a lifelong enterprise and should not be confined exclusively to peoples's youth;
vocational training is a key factor in preventing loss of employment and ensuring a rapid return to employment.

6. Technical change and the need for better training both call for new forms of work organization, in order to reconcile the needs of employers with the new aspirations of employees, while at the same time creating new jobs. On these issues, progress will best be achieved through cooperation between workers and employers.

[Top of Page]

C - Preventing and fighting social exclusion

7. Despite the favorable dynamics created by technological progress and efforts to invest in people, some workers find it difficult to adapt. They run the risk of being left aside. To improve their working and social conditions, and to prevent and fight against their exclusion from society, we must address insecurity about employment opportunities, pay, benefits and living conditions.

In certain G7 countries, young people are experiencing great difficulty in entering the labor market, with highly damaging consequences for their subsequent working life. They deserve help and very special attention in order to facilitate their entry into working life.

For other reasons, some workers who are well advanced in professional life are confronted with serious problems (e.g., reduced employability, difficulties in adapting to new technologies) which lead them to leave the workplace prematurely. We should do our best to end this waste of human resources at the very time when our societies are aging. More generally, we seek to identify policies that promote the security of "employability" over individuals' working lifetimes and facilitate job transitions.

8. Some very practical ideas have been put forward during this Conference that will help us achieve both high levels of employment and widely shared prosperity. Their application needs to be adapted to the institutions of the different G7 countries.

Tax and social systems must be adapted to "make work pay", particularly for the least well-off.
An active approach is of particular importance for the least well-paid workers and the long-term unemployed. Wherever necessary, labor market policies should aim at preventing long-term unemployment and integrating young job-seekers into the regular labor market, thereby showing commitment to the most vulnerable.
In those European countries where high indirect labor costs have contributed to unemployment among the unskilled, social charges bearing on unskilled labor should be lowered where appropriate.
The success of policies in favor of the most vulnerable workers also depends on improving the effectiveness of public employment agencies. It is particularly important to establish close links among the agencies responsible for finding work and those responsible for paying unemployment benefits, and to organize more systematic contacts between the public employment agencies of the G7 countries. (e.g., organizing working seminars on subjects of common interest).
More active efforts should be made to enable the least-skilled workers to gain access to vocational training.

All these reforms could make a real difference, but they will call for a high degree of perseverance and effort on the part of the G7 countries. We commit ourselves to continue our close cooperation. G7 Ministers could meet as appropriate to address these issues at the request of the Heads of State and Government.

The OECD and the ILO have made a valuable contribution to our deliberations at this Conference, and we look forward to their continued assistance and advice. In particular, we welcome the excellent report of Technology, Productivity and Job Creation, prepared by the OECD, as requested at the Detroit Job Conference in 1994, and look to appropriate follow-up work. The ILO and the OECD can further our understanding in their respective areas of excellence. We recommend that further work be undertaken on the interaction between macro-economic policies and structural reforms, and on "best practices" in technology and innovation, human capital investment, high performance work places, and policies to protect the most vulnerable groups.

Ministers welcome the Japanese Government's offer to host a meeting of experts on employment which could focus on youth employment, the problem of aging workers and lifelong learning.

The Chair of the Conference will forward these conclusions to leaders for the Lyon Summit.

[Top of Page]

Source: Released at the Jobs Ministerial Conference, Lille, France April 2, 1996

	This Information System is provided by the University of Toronto Library and the G8 Research Group at the University of Toronto.
	Please send comments to: g8@utoronto.ca This page was last updated .