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Local Employment Policy: Challenge for Local Government Strategy and Practice
Matthias Schulze-Böing
Local Employment Policy: Challenge for Local Government Strategy and Practice
Abstract
The Challenge of Unemployment
Local Employment Policy Supplements Federal Government and European Union Programmes
Local Authorities as Actors in Employment Policy
From Project to Strategic Management
Employment Policy as Integrated Strategy - Examples from Practice
Local Employment Policy - Strengths and Weaknesses
Abstract:
Local employment policy and local authority engagement can make an important contribution to improving the situation on the labour market. Economic and labour-market development, social, educational, and structural policy can be closely interwoven at the local level, thus using available resources better. Especially at a time when labour-market policy in Germany is undergoing radical change, strengthening local government competence and the local dimension of employment policy can be highly useful. For local authorities this poses the challenge of giving their engagement a long-term perspective beyond all short-term fiscal considerations, of better exploiting their existing possibilities, and of extracting employment policy from the social policy straitjacket to make of it an instrument for integrated and strategy-driven practice. The success of local government strategies depends very much on the extent to which local authorities see themselves as part of overarching actor networks and learn to develop and control these networks and to place their resources and specific competencies in this context with optimum effectiveness.
The Challenge of Unemployment
Unemployment is a challenge for local authorities. Cities and towns are affected when sectoral crises and plant closures deprive large sections of the population of their jobs, when a lack of training positions denies young people a start in working life, and the balance in the local economy is lost. The financial repercussions of the labour-market crisis (falling tax revenue accompanied by massive rises in expenditure for the social support of the unemployed) has plunged many local authorities into serious budget crises.
But local authorities are also important factors for success in a policy directed towards crisis management and safeguarding the future. They can provide impetus and are important agents of innovation.
Local Employment Policy Supplements Federal Government and European Union Programmes
Labour-market and employment policy needs a strong local dimension even at a time of globally interlinked markets and the international concentration of business enterprises. Local initiatives are certainly no substitute for consistent concepts at the national or European level. However, as part of a balanced bundle of strategies, they can make an important contribution to improving the employment situation.
In its employment policy directives, the European Union has therefore especially emphasised the local level and called for it to be strengthened. "Acting locally for employment" is accordingly an important challenge. It involves partnerships and alliances between a wide range of social partners, organisations, and actors, and - not least of all - enhancing the role of local government in the field of employment policy.
However plausible these multifarious demands for the upgrading of the local level may be, it remains difficult to derive a clear plan of action for local authorities. Labour-market and employment policy affect various policy areas at the municipal level which are often inadequately coordinated. Economic development, municipal social policy, urban development policy, as well as educational policy and administration management are areas that can help considerably in attaining employment goals and improving local potential.
Furthermore, effective local employment policy requires functioning cooperation matrices and actor networks that form, sometimes spontaneously, in common crises, for instance serious sectoral upheavals or major business failures, but which need to be carefully and patiently developed and fostered for a long-term employment strategy.
Finally, the factor of "leadership" is highly important in focussing local and regional potential, including municipal resources, on labour-market and employment goals, and mobilising lasting political approval and resources.
In the international debate on local development and local employment policy, the focus is generally on the creation and maintenance of jobs through targeted action by public and private actors. This naturally includes responsibility for integrated development, which also means integrating unemployed persons difficult to place, optimising labour-market services, and supporting particularly disadvantaged groups - as part of a broad local strategy that takes a holistic approach to employment policy.
The current discussion in Germany, in contrast, concentrates on issues relating to the "Hartz Reforms", i.e., competence for the integration of the long-term unemployed and recipients of social assistance. There is quite strong agreement on the strengths and deserts of existing local employment promotion, but there are still considerable differences on the extent to which local authorities are becoming or should remain responsible for serving this category of persons. With the adoption of the so-called Hartz 4 Act (Social Code Part II), responsibility for the basic minimum income of unemployed persons (unemployment benefit II), which merges the old unemployment assistance with social assistance for the unemployed, is transferred to the Federal Agency for Work (the former Federal Institute for Employment). Close cooperation with local authorities in "working groups" with far-reaching powers is, however, provided for. Local authorities may also opt to assume responsibility for unemployment benefit II. They would then be solely responsible for the group of persons concerned. What consequences these new arrangements will have for labour-market policy in Germany cannot be foreseen at the present time (February 2004), for important points still have to be settled, especially the modalities and amount of federal government compensation payments to local authorities that have accepted this option. In any case, lasting changes in the structures of local employment promotion are to be expected - at least as far as the integration of the long-term unemployed is concerned. The situation will and must be settled in 2004. How local authorities decide, how the policy of the Federal Agency develops, and what new structures emerge remain to be seen and are difficult to predict.
This article therefore addresses the broader context of local and municipal employment policy that remains relevant regardless of institutional structural and financial resource deployment issues.
Local Authorities as Actors in Employment Policy
In various regards, local authorities are important factors in the labour market:
- as employers;
- as actors in business promotion and "catalysts" in local economic development;
- as authorities with key responsibility for social cohesion and a special interest in socially excluded groups or those threatened with exclusion.
From Project to Strategic Management
In future, the employment policy function of local authorities can hardly be to create additional jobs in public administration and public undertakings. The public financial situation has set limits to expansion.
Local employment potential can nevertheless be exploited - no longer in the classical public service but in new forms of public-private partnership, in nonprofit organisations and the social economy.
Moreover, local authorities have many interfaces with industry and the labour market that can be used to foster employment:
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Jobs and employment can be created primarily by business companies. A sustainable reduction in unemployment can be achieved only by creating many new jobs. For this reason supporting entrepreneurial activity and business development are key tasks in successful employment policy. Local authorities are important, often direct and decisive partners for companies - not only big firms but also small and medium-sized enterprises, which tend to show greater employment growth. The promotion of economic development succeeds if it is optimised as a service at the interface between local authorities and industry. In this sense, business promotion can be organised as a one-stop shop for firms, offering integrated management of settlement and development projects. This can both save companies having to negotiate the labyrinth of poorly coordinated public authorities and exploit efficiency reserves in the administration.
In Offenbach am Main, for example, this management and service principle has been successfully applied since the beginning of the 1990s. Meanwhile, the municipality can give investors a relatively safe guarantee that the processing of their building projects up to and including definitive approval can be concluded within a maximum of three months. In many cities, including a certain large neighbour of Offenbach, investors still have to count with twelve or more months.
An effective and efficient administration that optimally coordinates its various departments and is guided by an overarching service concept can thus become a valuable competitive advantage for a city (cf. Amberger et al. 2002). - New jobs are created not least of all by new companies. The promotion of start-up firms can help vitalize the local economy and the local labour market. Often the formerly unemployed create their own jobs in this way. If a business succeeds, further jobs can be created. Last but not least, new companies bring a fresh breeze into local markets, enliven competition, and ensure the implementation of product innovations.
Through local centres and "incubators" for startup companies, local authorities can encourage the founding dynamic. Examples in Hamburg, Offenbach, and other cities show that sustainable success can be attained.(1) - Local employment initiatives perform a special function in integrating particular target groups. Disadvantaged young people, women, migrants, the chronically unemployed, and other groups need bridges to occupations and work, which can best be provided through services adapted to their concrete requirements. Local transitional labour markets and customized placement for these target groups are examples. The particular achievement potential of local government programmes is in areas where holistic and tailor-made promotion is important.
Since the end of the 1990s, the Cologne municipality has developed and implemented a concept of local job centres largely along these lines. Municipal social workers and administrative employees as well as the employment office operate in integrated teams in the new centres, exploiting the possibilities of both organisations to the optimum. The unemployed and people in need of help have only one stop in the most important questions of support and active employment promotion services. An "additive" organisational model still prevails with legally separate competence and organisational responsibilities for the services of the employment office and the municipality. Pending changes to the legal framework conditions (SBG II, see above) will facilitate the genuine integration of services.
Very little has yet been published in the way of assessment of this and similar models. Scientific accompaniment work on various model cooperation projects between local authorities and labour-market authorities under the so-called MoZarT Programme has not yet been completed.
In Offenbach, where a similar programme has been running for a number of years now, such cooperation has proved anything but simple and unproblematic under present legal conditions (the widely differing organisational cultures and action concepts of a federal authority and a local government authority having to be reconciled). Nevertheless, progress has been achieved in optimising service procedures and improving service quality.(2) - An important function of local authority employment policy likely to become even more important is developing areas of employment providing jobs "between market and government," which create work for the growing number of people who can no longer be accommodated in the competitive market. Existing models of "secondary labour market" are certainly not appropriate. Increasingly, jobs need to be created for people who are no longer fully competitive under present conditions, jobs which are market focused and can achieve reasonable cost coverage from market earnings, but which also offer a "protective" and supportive labour environment permitting even difficult-to-place people participation in (gainful) employment. In this field a great deal of development is clearly still needed. Unlike in many other European countries (such as France and Italy) there is no systematic basis in Germany for employment strategies of this sort. Especially since current labour-market reforms concentrate almost all policy instruments on the primary, general labour market, it is indispensable to create additional employment opportunities for groups that cannot be integrated in the short term (cf. Evers/Schulze-Böing 1999).
- The promotion of "life-long learning" helps safeguard employment. By supporting further training in firms, by creating continuing educational opportunities close to workplace and home, and by fostering greater awareness and mobilising employees and companies for continuing training, the level of skills in the region can be raised. The employability of the workforce is enhanced, the "learning region" becomes a model.
Skills acquisition campaigns were launched with this in mind in Offenbach. Continuing education authorities in this region joined forces to provide improved, better adapted services. The municipality set up an office to advise employees on continuing training. An "open learning centre" for self-guided learning (so-called e-learning) on the personal computer and with Internet learning programmes provides a new type of learning locale supplementing public and private educational services. This has created additional, flexible opportunities for skills acquisition. The centre is now very well accepted and used to full capacity.
This initiative by the municipality is also supported by trades, by the chamber of industry and commerce, trade unions, and by various individual firms. With a continuing education database developed by the municipality, the service covers not only Offenbach but the entire Rhine-Main region (see www.offeneslernen.de).
Local and regional continuing education policy is thus an important element of local employment policy. It helps improve the skills structure in the region and is intended above all to ensure that all employees, including those with little learning experience or with social disadvantages, and all firms, including small companies, can access modern continuing education services (cf. Klems et al. 2002). - Local authorities can use their many and diverse interfaces with local industry, with associations, and with civil society actors to develop and advance partnerships and cooperative matrices - in brief, to develop and deploy network competence. Good governance is increasingly a matter of network management through the fostering of cooperation outside one's own field, as well. Two examples from Offenbach:
- In the "Open Learning Network" the municipality has established a platform for the key actors in educational and continuing education policy to develop new forms of learning and to interlink learning opportunities and learning contents. A broad spectrum of institutions has been mobilised for a new learning culture in the city, including the local college for design, general educational and vocational training schools, general educational establishments, the adult education institute, the chamber of industry and commerce, municipal business promotion, foreigner associations, and individual firms. The "Open Learning Centre" and the continuing education database - both described above - are two concrete products of this network initiated and supported by the municipal employment promotion authorities.
- In the autumn of 2003 another local network initiative started: the "Start-Up City Offenbach" project. The aim is to give impetus to business start-ups in the city and enhance the concomitant employment effects, and to ensure the long-term success of new firms through an efficient advisory and support environment. For this purpose the municipality has networked the various chambers, higher educational institutions, the start-up centre, and banks and savings banks. The European Union supports this network as a model project under Article 6 of the European Social Fund (see www.gruenderstadt-offenbach.de).
- Classical, company-related business promotion and labour-market policy can be successfully combined.
Leipzig, for example, has pursued a much lauded "cluster strategy" that linked establishment of the carmakers BMW and Porsche with targeted point qualification of unemployed persons. The companies having settled the location question, a start was made under the aegis of the municipality to train people for positions in the new plants in a cooperative effort between the employment office, local educational institutions, and the firms concerned, and thus to attain purposive relief for the regional labour market. Component suppliers were included in the concept.
This example shows that a systematic, integrated local authority strategy and close cooperation between all parties can best exploit the potential of local employment policy.
Employment Policy as Integrated Strategy - Examples from Practice
Local authorities have a great deal of scope for action. This is clear from the few examples cited. They stand for a wide range of practices in Germany and Europe. Employment policy engagement by local authorities is now relatively widespread.
In the past, there was a strong tendency for local authorities to be mere deficiency guarantors bearing the brunt of labour-market and employment policy omissions at "higher" political levels. Local authority measures took effect where - as in the case of social assistance - upstream systems failed. The self-conception of local authorities (especially at the level of certain central local authority organisations) has been and to some degree still is determined by this defensive, deficiency approach. Greater promise seems to be offered by an employment policy that is part of an aggressive municipal performance policy, which allows the specific strengths of the local level to be mobilised, and which in many, but not all regards is more efficient than global approaches. Global and local policy are two necessarily complementary aspects of one effective arrangement.
If arrangements claim to be strategic, however, they must be more than a collection of ad hoc, weakly linked or isolated activities. What is needed is a definite orientation framework and the development of strategic framework functions that can lend local action processes direction and stability. It is, as it were, a step from "project intelligence" (the ability to plan and implement individual projects for oneself) to "systems intelligence" (the ability to design and purposively control a differentiated system of individual programmes and projects).
The European Employment Strategy that has been developed since 1997 is also a useful framework for local strategies. The four often cited "pillars" of the European concept - improving the employability of the workforce, promoting adaptability to economic and technological change, supporting the entrepreneurial spirit, and preventing social exclusion - find close equivalents in a balanced municipal activity portfolio, as the practices outlined above show. The principles of prevention, results orientation, and transparent accountability are also elements of the European strategy that can be useful in developing and implementing local action plans (cf. Schulze-Böing 2003).
Over and above this, however, local employment policy should embrace the "learning system" principle. It requires local employment policy to be designed as a planning, action, and reflection cycle, which is open to new ideas, which evaluates its own practice as strictly as possible, and which feeds the outcome of this evaluation back into practice (Schulze-Böing/Johrendt 1994). This is an important formative task for local authority practitioners.
Such a learning system includes local and regional labour-market monitoring instruments that permit the localized description of focal problems and which, where possible, provide regional early warning indicators for developing problems.(3) Such local/regional employment monitoring is naturally intended to help render the effects of active labour-market and employment policy on structures in the reference area amenable to evaluation.
In the interests of good governance it is important that the results of these observations do not disappear into bureaucrats' desk drawers but are made transparent to fructify overarching learning processes in the region and the community.
The task for the future is therefore to create something which the EU commissioner responsible for employment and social affairs, Anna Diamantopoulou recently described as "intelligent territories" - intelligent cities and regions that optimise their resources through strategic policy approaches, practice strategic (and open) control models, and, finally, systematically develop and improve the knowledge base of their populations.(4)
Local Employment Policy - Strengths and Weaknesses
The strengths of local employment policy are flexibility, focus on local problems and actors, and the possibilities for integrated, holistic practices. In some areas this gives municipalities an advantage over centrally organised public authorities (such as employment offices).
The weaknesses of local authority practice are local isolation and dependence on special personnel and political constellations. All too often, it still depends on the problem awareness of local politicians and the creativity of administrative authorities whether local employment policy is perceived as a task. And the very limited resources available constitute a constraint that cannot be ignored.
Networks like "Network: Local Authorities of the Future," initiated jointly by the Hans Böckler Foundation, the Bertelsmann Foundation, and the Cooperative Association of Municipal Authorities (KGSt), are particularly important in this situation. They allow innovations and good ideas to diffuse more rapidly. This also generates fruitful competition for best practices in which "benchmarking" and "benchlearning" drive developments at the local level.(5)
Notes
(1) See Deutscher Städtetag et al. (s.a.); and for an overview of exemplary practices: www.exzept.de (back)
(2) For Offenbach see the relevant reports of the "Jugenagentur Offenbach (JA:O) at www.offenbach.de/wirtschaft. (back)
(3) In this field developments are still in their infancy. The European Commission has therefore commissioned a research project for the development of regional employment indicators that was to be completed by the end of 2003. For some years now there have been promising beginnings in the Rhine-Main area in labour-market monitoring by the Institute for Economics, Labour, and Culture (IWAK), especially in the field of skills acquisition (cf. www.iwak-frankfurt.de). (back)
(4) See: European Forum for Local Development and Employment: www.hp2003ledforum.org (back)
(5) Cf. also the copious material at www.bik-online.de (back)
References
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