The Benchmarking Working Europe Report 2023 highlights social vulnerabilities and challenges in Europe. The EU is currently trying to manage four transitions simultaneously, with conflicting goals and limited vision. However, a transformative and ambitious social transition is needed to break the current crisis cycle. Researchers from the European Trade Union Institute (ETUI) and representatives from the European Commission and the European Trade Union Confederation (ETUC) discussed this on the occasion of the publication of the report.
The EU is currently facing a polycrisis, the biggest of which is the cost-of-living crisis. It is accompanied by many other challenges such as high inflation, low wages, energy crisis and the overloading of value chains. And the sword of Damocles of the climate crisis hangs over everything. At the same time, some companies and sectors are recording unprecedented profits. This is in stark contrast to the glaring lack of resources in other areas. In fact, the EU needs to focus on new investments in the green transition and on a strategic industrial policy as soon as possible, not least to maintain its competitiveness vis-à-vis the US and China. In doing so, it is important not to lose sight of the EU's values: "Democracy and social justice must go hand in hand," said Oliver Röpke, President of the Workers' Group in the European Economic and Social Committee (EESC).
The challenge of "4 + 1" transitions for the EU
According to Nicola Countouris, Director of the Research Department at the European Trade Union Institute (ETUI), the EU has broken its post-pandemic "building back better" promise. According to him, EU solutions to current problems are often unambitious and would even partly lead to an institutionalisation of the crises. He sees major challenges in the current transitions: The green transition, for example, lacks investment and energy prices remain at a record high. The technological transition requires a redefinition of the concept of the workplace and the regulation of artificial intelligence. In the context of the strategic transition, the diversification of supply chains and the reshoring of critical and strategic production goods are essential. Finally, the economic transition requires addressing high inflation by changing the macroeconomic framework. The "missing" fifth dimension is particularly important: the social transition. In this context, long overdue redistributive issues need to be addressed and the importance of social dialogue and collective bargaining recognised.
High inflation, cost of living crisis and increase in psychosocial risks
Sotiria Theodoropoulou, Head of European economic, employment and social policies research unit at the European Trade Union Institute (ETUI), sees the high inflation as a consequence of the four transitions mentioned above. The increase in the harmonised consumer price index has slowed to 8.5% in January 2023 after peaking at 10.6% in October 2022. The problem, Theodoropoulou said, is that nominal wages have not kept pace. The current shortage of skilled workers also reflects the unattractive working conditions in some sectors and highlights the need to retrain and re-skill workers. According to Agnieszka Piasna, senior researcher at the ETUI, the acceleration of technological innovations brings to light completely new dimensions of polarisation and inequality. The technological transition leads to a drastic increase in occupational risks: Psychosocial risks in particular, such as harassment, bullying, lack of autonomy and work overload, are becoming increasingly common. This makes the role of workplace democracy and social dialogue all the more important.
Social transition as a beacon of hope?
According to Frank Siebern-Thomas of the EU commission, it is particularly important to focus on the social transition and on social resilience and sustainability. For Liina Carr, ETUC Confederal Secretary, in order to finance our social systems, taxation must finally be changed: “As long as the richest people in the world hide and even commit fraud in order not to pay taxes, but the remaining 99 per cent have to pay taxes on every cent, we will not be able to invest adequately in social construction." Even though the EU Commission, as stated by Siebern-Thomas, is aware of the importance of involving the social partners in this process, according to Carr, their overall involvement is still far too low.
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