In-work-poverty increasing in spite of economic growth, study reveals

A number of people line up for a job interview. [Shutterstock]

Social inequalities, including in-work-poverty, have increased in the aftermath of the 2008 economic crisis, according to the findings of a study released by SOLIDAR, published on Wednesday (13 November).

While the number of people at risk of poverty or social exclusion has decreased in the EU over the past ten years, “in the period from 2010 to 2017, the number of people suffering from in-work-poverty increased, from 8.3% to 9.4%,” the study warned.

Unemployment has dropoff but remains high and the quality of the jobs created is questioned. Wages have stagnated and employment has become more precarious, particularly as a result of the prevalence of non-traditional working arrangements (part-time, zero-hours contracts, platforms…). 

“When we talk about unemployment that has been reduced, this is good news, but you have to look at what kind of jobs have been created,” said Nicolas Schmit, Jobs and Social Rights Commissioner-to-be during the presentation of the report at the European Parliament.

“What statistics tell you is that people have a job, but not that they are suffering in that job,” he pointed out.

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The increasing flexibility in the world of work has affected the coverage provided by the social protection systems too. “Interruptions of employment also result in an interruption in social contributions,” the report found. 

“We have to come back to a social market economy,” Schmit argued, “we need to build a new modern economy of the 21st century and we cannot do it with the working conditions and the social conditions of the 19th century,” he added. 

Socioeconomic inequalities are reflected in the access to healthcare too, the study revealed, pointing to non-standard workers, Roma, and migrants as the most vulnerable groups. In some countries, citizens in rural areas are particularly concerned too. 

Another challenge the report identified is the difficulties people experience in many countries in Europe in accessing affordable and quality housing, particularly in urban centres and touristic hotspots.

“Tackling the prices of housing should be high on our agenda,” said Agnes Jongerious (Netherlands, S&D), member of the European Parliament’s Committee on Employment on Social Affairs.

“We have to tell the story about homelessness, about the housing crisis. We have to make clear that governments are not delivering for their citizens,” Jongerious insisted.  

The generational and gender gaps are another major issue identified by the study. Discrimination in access to the labour market and the gender pay gap – 16% on average in Europe – are important challenges for female workers. 

Young people face their own issues as the education system fails to provide them with the skills required and tends to reproduce socioeconomic inequalities. The contracts and conditions for young workers are worse with respect to the previous generation. 

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A more social European Semester 

European economies are recovering from the impact of the crisis that hit the continent back in 2008. However, the picture the study paints is hardly ideal as social inequalities and precarious jobs remain among the most pressing issues for the bloc. 

In 2017, the Commission launched the European Pillar of Social Rights aimed at working towards a more social Europe. But already in 2014, social indicators were introduced in the European Semester, the main tool to assess the economic situation in member states, to monitor the progress. 

However, “we consider that in the Country Specific Recommendations, there are still too many macro-economic indicators and not enough social objectives,” Conny Reuters, SOLIDAR secretary-general pointed out, highlighting the failure to put Europe’s social objectives at their core. 

“We have a macroeconomic imbalance procedure but we don’t have a social imbalance procedure,” added Giovani Casale, policy officer at the European Trade Union Confederation. 

The soon-to-be Commissioner for Jobs and Social Rights, Nicolas Schmit, praised the job done by the Juncker Commission and said the main issue remains the implementation of the actual recommendations. 

“What is weak is the ownership,” Schmit said, “you might have good recommendations but the implementation is not good.” The Commissioner-designate underlined the need to ensure the involvement of civil society, social partners and governments in the semester process to ensure they satisfactory put in motion the initiatives proposed. 

Schmit pointed to the use of the European Social Fund to fund the necessary reform, also related to social services. “You have to invest money,” he insisted. The Eurozone budgetary instrument, Schmit added, “should also be a possibility to support reforms in the social sector” as well. 

“It is important that social policy is not developed in isolation,” said László Andor, former EU Commissioner for Employment, Social Affairs and Inclusion. 

Andor explained there is a need to bring together social affairs and finance “to steer economic policy towards a more progressive direction and not just simply having to deal with the consequences of bad economic policy decisions.”

“The socio-ecological transformation of Europe,” said Katrin Lagensiepen, (Germany, Greens/EFA), vice-chair of the Parliament Committee for Employment and Social Affairs, “must attempt the same importance than the economic growth of Europe.” 

“If we want this transition in our economy,” Schmit added, “we have to combine environmental policies and the social, this has to go hand in hand.” And it has to be integrated in the European Semester, “that we have to fundamentally change.” 

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[Edited by Zoran Radosavljevic]

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