Minimum wage issue resurfaces in Paris election debate

Green jobs construction buildings.JPG

Proposals for a continental minimum wage and jobs-creation dominated the first of a series of European Parliament panel debates in Paris on Tuesday (15 October), as EU-wide elections approach. reports.

“I think we are on our way to a European minimum wage,” Pervenche Berès, a French socialist MEP told the 'Employment perspectives in Europe' conference.

Some European countries such as Germany, Sweden and Denmark currently do not have a minimum wage threshold, unlike France or Spain.

"Europe is far from being uniform about employment. Disparities in policies between member states make it difficult to create a unique and homogeneous minimum wage," said Pierre Cahuc, an economist and advisor to the French Prime Minister.

The introduction of an EU-wide minimum wage poses many problems, but the debate could soon gain traction in Brussels following the German elections.

If negotiations between the Social Democrats (SPD) and the CDU-CSU Chancellor Angela Merkel for a "grand coalition" in Germany take shape, the SPD “would make the adoption of a European minimum wage a priority," said Berès.

"If Germany is committed to the minimum wage, it will become much easier to push the issue in Brussels, at least for the countries of the euro area," she explained.

Youth employment initiative

Berès, who chairs the European Parliament's employment and social affairs committee, saw signs that Europe was starting to move on other social policy issues.

“The youth employment initiative […] is an immediate measure against unemployment rates that have become unbearable," she said.

The initiative, which was agreed in February and launched in June by the EU's heads of states, foresees up to €8 billion to assist young people find jobs, apprenticeships or training within four months of being unemployed.

This 'youth guarantee scheme' will apply in parts of Europe where  unemployment of under-30-year-olds exceeded 25%. It has to be implemented by January 2014.

>> Read: Europe's €8bn youth jobless fund meets scepticism

In France, the implementation of this programme has begun in ten regions. "Of the six billion spent by the EU, around €600 million will be used in France," Berès said.

Cahuc had no illusions about the fund, saying the youth guarantee "does not fundamentally change the situation of youth employment in Europe. The amount of funds devoted to this policy is far too modest given the magnitude of the problem".

"But it is the first time that the EU introduces an instrument to tackle the social dimension of the Economic and Monetary Union," Berès retorted.

The EU's social dimension is clearly mentioned as a priority in EU treaties. Article 9 of the Treaty on the Functioning of the EU says that a high level of employment, adequate social protection and the fight against social exclusion should be taken into account in the development and implementation of EU policies.

"This has unfortunately never been used," the French MEP said. "Moreover, the European Central Bank has no employment objectives, unlike the American Federal Reserve whose mission is to maintain a good level of employment," she added.

The lack of a social dimension to EU policies has been repeatedly singled out as one cause of rising populism and Euroscepticism in Europe.

The European Commission, for its part, has recommended tackling unemployment by introducing so-called "flexicurity" measures in the employment market. "With this concept, the Commission hopes that member states implement policies based on greater flexibility of employment and higher unemployment revenues," Cahuc explained.

The European labour market is confronted with a paradox: while there is record unemployment in many EU member states, millions of jobs remain unfilled in many sectors that are key to economic development.

Despite all efforts to bring down unemployment and match skills in the domestic labour force, Europe-based international companies and SMEs face huge problems hiring the people they need.

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