One in ten European workers at risk of poverty, study says

epa08524654 A banner reading ?RIP 1908-2020? hung at the entrance of a Karstadt department store during a demonstration in Tempelhofer Damm in Berlin, Germany, 03 July 2020.The Tempelhofer branch is one of the seven Galeria Karstadt Kaufhof department stores that are to be closed in Berlin and Potsdam. According to media reports, the department store chain is to close 62 of its 172 stores permanently for economic reasons due to the COVID-19 pandemic. EPA-EFE/HAYOUNG JEON

In-work poverty increased over the last decade in most European countries, with around 12% of workers at risk of poverty, according to the latest report by the European Trade Union Confederation (ETUC).

The scars left by financial crisis were deep and are still visible. The ‘Benchmarking Working Europe 2020’ report, to be published on Thursday, and seen by EURACTIV concluded that the “in-work poverty” increased in 16 member states between 2010 and 2019.

That contributed to a 12% increase in the working poor across the EU, meaning around one in ten European workers now fall below Eurostat’s at-risk-of-poverty threshold (60% of national median income).

“It is a scandal that more working people are living in poverty now than at the height of the financial crisis despite the economy growing. It is clear that action is needed at EU level,” said ETUC Deputy General Secretary Esther Lynch.

Hungary, the UK, Estonia, Italy and Luxembourg registered the biggest rises, with a working poor rate increasing by between 58% and 27%.

The most affected groups were young people, migrant workers and those with temporary contracts.  

The situation is expected to worsen in the aftermath of the COVID-19 pandemic, as the recession triggered by the virus hit vulnerable groups of workers hardest, warned EU employment commissioner, Nicolas Schmit.

Commission makes it clear: Same minimum wage for all EU countries is impossible

Commissioner Nicolas Schmit said on Wednesday (28 October) that if Bulgaria, the country with the lowest wages in the EU, were to introduce the same wages as his native Luxembourg, the very next day there would be “no Bulgarian economy”.

Schmit presented in October a proposal to ensure that countries with statutory minimum wages secure a decent living for workers.

The proposal asks countries to use indicators to measure the adequacy of minimum wages. The Commission points out that 60% of the median wage and 50% of the average wage can help guide the assessment of minimum wage adequacy in relation to the gross level of wages. But the EU executive fell short of imposing these indicators as targets.

ETUC has proposed the inclusion of a clause in the directive that prevents minimum wages being set below the at-risk-of-poverty wage line, using the same median and average wage indicators used by the Commission.

“The Commission has recognised that rising in-work poverty is bad for society and the economy, but the measures they have proposed so far will do little to reverse this trend,” said Lynch.

The ETUC also argued that collective bargaining is “the best way to get working people a fair share of the wealth they are creating,” said Lynch. 

For that reason, she called for a bigger push for collective bargaining in the minimum wage directive to increase the number of employers signing up to collective agreements.

[Edited by Benjamin Fox]

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