This year’s Benchmarking Working Europe Report is giving an overview of the different inequalities in Europe, revealing how the pandemic generated new dimensions of inequality and exacerbated existing ones. The Chair of the Workers’ Group at the EESC, Oliver Röpke, called the report an important resource to underline the trade union demands for higher wages and tougher collective bargaining. 24 Mio employees in the EU are earning a wage, which is below the poverty line and only two out of five employees are being paid collectively bargained wages. According to Luca Visentini, General Secretary of ETUC, the EU should not merely go back to the pre-crisis model. He demanded a fundamental and radical departure from the current economic policy and a revision of the economic governance rules as well as new models for the social sector in order to rebuild battered national welfare systems.

Nicola Countouris and Agnieszka Piasna (both from the European Trade Union Institute, ETUI) regard inequality as a multidimensional and structural problem and a consequence of our economic and social model. Due to a speedy roll-out of the SURE Programme and national job retention measures, about a quarter of employees EU-wide had been able to participate in these programmes. People in precarious and atypical employment had far less access to these measures, which reinforced inequalities that already existed before the crisis. The Corona crisis also accelerated many developments, which were already apparent previously, for example in respect of teleworking, the gig economy and digitalisation. The pandemic also dramatically amplified gender-specific differences, in particular with regard to unpaid care work. For example, in respect of childcare, women on average undertook 62 hours per week during the pandemic, whilst the figure for men stood at 36 hours per week.

MEP Evelyn Regner, (S&D Group), stressed that both national and EU recovery plans had to take the gender-specific dimension into account. She advocated comprehensive gender mainstreaming regarding the new economic governance and underlined the importance of binding measures by the EU. The ongoing initiatives on EU minimum wages and pay transparency are important measures to counteract the existing inequalities between men and women. In Regner’s opinion, it is also important that women are better represented in leading positions, whether on company boards, as part of collective bargaining teams, at the ECB or in politics.
 

Barbara Kauffmann, Director at the European Commission Directorate-General for Employment, Social Affairs and Inclusion, referred to the Commission’s initiatives on fighting inequalities, which young adults are confronted with. As a reaction to the rise in youth unemployment, the Commission had launched the Youth Guarantee, which has now been extended to include up to 29-year olds. The new ALMA Programme, which is aimed especially at the mobility of young adults, who are neither in employment nor in education or training, is also a contributing factor. Based on this measure, the Commission is hoping to reduce youth unemployment in the EU from currently 12 % to 9 % by 2030.
 

Sotiria Theodoropoulou (ETUI) pointed out that only 13 Member States will have reached their real GDP level of 2019 by the end of 2021. In particular southern countries and countries depending on tourism, were suffering the greatest losses. However, it was remarkable that in spite of the huge economic shock between 2019 and 2020, the overall increase of income inequality and the share of people at risk of poverty in the EU was less severe. This indicates the effectiveness of public support measures. Hence, when the political will exists, there is indeed an alternative path to austerity policy, as fiscal rules are not set in stone.

Prof. Simon Deakin regarded the strengthening of shareholder rights, which were also advanced by the European Union, as another factor for increasing inequality in companies. In comparison, the rights of employees in the workplace have not significantly improved since the 1990ies, which resulted in a huge imbalance between labour and capital in favour of capital.

Prof. Kate Pickett demanded that policymakers give sufficient attention to the negative effects of inequalities and urged them to take genuine action. As vertical inequalities regarding power, wealth and income were closely linked to horizontal inequalities regarding geographic origin and demographic identity, a comprehensive approach is needed. To tackle the “inheritance“ of inequality, it is vital to address this issue as early as possible. Apart from that, inequality is a decisive factor with regard to crisis management: countries with a greater level of income inequality record worse pandemic progressions and a higher rate of excess deaths than countries with lower income inequality.