Nearly 1.3 million Belgians are unemployed and are not looking for a job either, despite the Federal Government's ambition to ensure 80% of the active population is working, new research by the University of Ghent (UGent) shows.
The Belgian authorities in 2019 and 2020 stated that the country needs to achieve an 80% employment rate to pay for social security and, above all, pensions. Whilst employment rates did indeed increase from 67.4% in 2019 to 75.4% this year, the target has not yet been reached.
Around half of EU Member States already meet this 80% threshold: the Netherlands, for example, is at 83.2% whilst Germany reports 81.8% of its active population at work. The EU average, meanwhile, stands at 76.7%.
"The Belgian labour market's major problem is not unemployment, which is below the European average, but high inactivity," said Stijn Baert, Professor of Labour Economics (UGent). "1,267,000 people aged between 25 and 64 in our country are neither working nor looking for work."
Het grote probleem van onze Belgische arbeidsmarkt is niet de werkloosheid, die onder het Europees gemiddelde ligt, maar wel de hoge inactiviteit. 1.267.000 personen tussen de 25 en 64 jaar in ons land werken niet en zoeken geen werk. (2/8) pic.twitter.com/PCcH11laCx
— Stijn Baert (@Stijn_Baert) May 19, 2023
This group is called the 'inactive' population. Importantly, this is not the same group as the unemployed: the latter are looking for a job, inactive people are not. They include discouraged unemployed people (who also no longer receive benefits), housewives and househusbands, long-term sick people, students or people who have retired before the age of 64.
"Many think that Belgium's low employment rate and high inactivity are purely a Walloon and Brussels problem. This is not true," said Baert. "Yes, Flanders has a very low unemployment rate, but we are not doing well in terms of inactivity."
At 3.7% (about 225,000 people), Belgium's unemployment rate is relatively low. This means that even if there were a way to get the unemployed population (back) to work, the 80% threshold would still not be reached. The inactivity rate, however, is much higher at nearly 21% (1,267,000 people) of the population.
The ones "to blame" for the high inactivity rate are men (16.5%) rather than women, explained Baert. "With the exception of Italy and Croatia, the inactivity rate among men aged 25-64 is higher in Belgium than anywhere else, whilst Belgian women (25.3%) are closer to the EU average."
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Elderly people are also more likely to be inactive: one in three people aged between 50 and 64 do not have a job, nor are they looking for one. Additionally, less than half of lower-educated people are employed – compared to two in three in the Netherlands.
The researchers claim that the solution to the problem lies in labour market reforms. "In our country, for every €100 a boss pays an employee, €53 goes to the state treasury, compared to €35 in the Netherlands. Additionally, you retain more social benefits when you go to work with a low income."
