ETUC: Wages in Europe are too low

“Wages are down, and are staying there,” said Ronald Janssen, economic policy adviser at the Trade Union Advisory Committee (TUAC), at the event. [Garry Knight/Flickr]

The gap between the rich and ‘the rest’ is growing, European Trade Union leaders warned as Europe struggles to recover from the 2009 crisis that wiped 10% of its economy.

The campaign, Europe Needs a Pay Rise, is aimed at moving the economy in the right direction in the aftermath of the crisis. It was launched on Tuesday (14 February) by the European Trade Union Confederation (ETUC).

“Wages are down, and are staying there,” said Ronald Janssen, economic policy adviser at the Trade Union Advisory Committee (TUAC), at the event.

Several union officials at the launch noted that many people living on the streets have jobs— but their income is too low to live on.

“Wages have collapsed in the last decade, not decreased— collapsed,” ETUC General Secretary Luca Visentini added.

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Collective bargaining is the best way to achieve these affordable pay rises, according to ETUC Confederal Secretary Esther Lynch.

“This reality needs to be reflected in EU and national economic policy, and in a long-overdue new wave of collective bargaining,” Lynch said.

“I really believe that collective bargaining is the key issue we have to address here,” Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria (CITUB), said.

The EU has no direct power to legislate on wages or wage setting frameworks, according to European Commission spokesman Christian Wigand.

“It is the responsibility of the social partners and authorities in the member states to decide on these matters,” Wigand said.

But, Wigand added that the Commission has issued recommendations on wage developments, aimed at better reflecting productivity in developments.

EU riven by big wage disparities

Income inequality is rife within the EU, with average wages in northern member states up to five times higher than those in Southern Europe, according to Eurostat figures published on Monday (12 December).

“Jobs and growth are obviously at the heart of the Commission’s agenda,” he said. “In the context of its work on economic governance, the Commission has focused on a ‘virtuous triangle’ of boosting investment, pursuing structural reforms and ensuring responsible public finances.”

Collapsing wages have created a similar drop in demand, which resulted in a negative impact on the EU economy.

“European workers need a raise to support our economic recovery, to get back price stability, to promote fair distribution of economic process,” Janssen continued.

But, Raymond Johansen, the mayor of Oslo, said one model will not fit all of Europe because it is such a culturally vast continent.

The “market economy is a great tool”, Johansen said.

ILO: Middle class at risk

The erosion of the middle class is worrying, because it particularly hurts young people, thus leading to an intergenerational gap. But it is even more worrisome, as it does not seem to have been taken seriously enough so far, said ILO senior economist Daniel Vaughan-Whitehead.

He added that tax incentives could also be a tool in stabilising prices.

Nicolas Schmit, Minister for Labor, Employment, Social Economy and Solidarity in Luxembourg, said initiative on the issue by the European Trade Union is ‘absolutely necessary.’

“All those who consider themselves progressives, we have to have a serious discussion on this issue,” Schmit added. “Germany has a responsibility in this disruption inside the monetary union.”

“Why Europe needs a pay raise? Because we deserve it, all of us,” Dimitrov concluded.