The impact of globalisation on employment and the EU

Globalisation creates job opportunities, but it can also lead to job losses. Managing globalisation to make the most of it is a priority for the EU, building a social Europe that helps redundant workers find new jobs.

The number of jobs supported directly or indirectly by EU exports outside the Union is growing steadily. It increased from 21.7 million jobs in 2000 to 36 million jobs in 2017. Every billion EU exports support, on average, around 13,000 EU jobs.

Job opportunities are not limited to exporting companies but extend to companies that supply them with goods and services.

The proportion of highly skilled workers in export-related jobs is increasing, and export-related jobs are on average, 12% better paid than other jobs.

The negative impact of globalisation on employment

Globalisation generates increased competition between companies, which can lead to closures, relocations and job losses.

The most vulnerable sectors in the EU tend to rely on low-skilled jobs such as textiles, clothing, footwear and leather, or the processing of base metals and fabricated metal products and manufacturing industries.

Manufacturing industries are more exposed to offshoring to countries with cheap labour.

While offshoring is at the centre of the globalisation debate, evidence shows that the number of job losses due to offshoring in the EU decreases.

Offshoring trends are changing and now occur more in Eastern European countries than in the Western Member States. The destination countries are in North Africa and Asia.

While the overall results of international trade liberalisation are positive, some sectors are badly affected. The length of the adjustment period needed for workers to relocate to other industries can significantly reduce the initial gains.

The European Globalisation Adjustment Fund (EGF)

To reduce the negative impact of globalisation and reduce unemployment, the EU created the European Globalisation Adjustment Fund in 2006. It aims to provide support to redundant workers who have lost their jobs due to globalisation.

This emergency solidarity fund co-finances up to 60% of labour policies to rehire workers or set up businesses. The EGF projects involve education and training, career counselling, job search assistance, mentoring, and business start-ups.

In 2009, the fund was extended to cover job losses resulting from significant structural changes brought about by the economic and financial crisis.

The fund can be used when more than 500 workers have been made redundant by a single company and its suppliers, or when many workers lose their jobs in a specific sector in one or more neighbouring regions.

Since 2007, the EGF has spent 630 million euros to help around 150,000 redundant workers and 3,369 young people.

The European Parliament called for a reform to improve the EGF in January 2019.