Labour Minister warns of “ticking time bomb”

(CS) Luxembourg's Labour Minister Nicolas Schmit has warned that temporary employment and fixed-term contracts are on the rise in Luxembourg, calling on the next government to monitor the situation.

July saw a record 7 percent unemployment in the Grand Duchy, with nearly 17,000 people out of work, marking a 17.4 percent increase compared to the same time last year.

Calling the numbers “alarming,” Labour Minister Schmit on Wednesday, however, explained that the collective holiday in the building sector was partially to blame, with contracts scheduled to expire before the holiday.

Additionally, several industrial companies turn down production over the summer, leading to additional redundancies.

Reintegrating workers a growing problem

A different time bomb is ticking, however, the minister added, speaking of professional rehabilitation procedures, the so-called “reclassement”.

Around 45 percent of workers who are no longer able to work their chosen profession, for example because of health reasons, have been out of work for more than two years. Some 64 percent have only basic education. “What kind of job can you give these people?” he asked. “We are dealing with a ticking time bomb.”

A new law, which was meant to give greater responsibility to employers to help their redundant workers find a new job, either in the company or a different business, was not voted by the Chamber of Deputies before the summer break, and now faces delays because of the general elections in October.

Problematic transfer of job seekers within EU

A growing problem is also the increasing number of foreigners failing to find employment in Luxembourg. Around a third of job seekers are of Portuguese origin, with Schmit warning that the immigration of workers from troubled southern economies is leading to a transfer of social issues from one country to the next.

While Schmit stopped short of discouraging immigrants from coming to Luxembourg, he did call on businesses in Luxembourg to give preference to job seekers registered with the ADEM rather than hiring new arrivals.

It was not all doom and gloom, however, as youth unemployment did not increase in July, despite the fact that school leavers joined the labour market last month.

Reporting by Joëlle Merges