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BackOn 21st January 2014, the Report on Employment and Social Developments was presented in Brussels by László Andor, the Commissioner for Employment, Social Affairs and Inclusion. The report documents the dramatic impact of the austerity policy on the social situation of employees in Europe. However, the Commissioner himself did not hold back with a certain amount of criticism for this policy and demonstrated that even within the European Commission not everybody sings from the same hymn sheet.
Jobs are no guarantee against poverty
The Commission’s report makes one thing clear - the social crisis is far from being over. Whilst some economic indicators point in a positive direction and the financial markets are booming again as if the crisis had never happened, poverty in Europa is still on the rise. Particularly alarming is hereby the fact that nowadays having a job is no longer a guarantee against poverty. The study proves that only about half the people being at risk of poverty, who find a job, are able to escape it. László Andor explained this situation with falling household incomes in Europe and an increase in part-time work. Hence, the number of unemployed, which is also falling in some South-European countries, does not necessarily result in an improvement of the social situation.
Another worrying realisation, which the report brings to light, concerns the still existing gender inequality. Admittedly, as mentioned in the report, the pay gap between women and men has slightly narrowed during the crisis. However, this is only thanks to the sad fact that male-dominated jobs were hardest hit by the crisis. Nevertheless, the differences are ongoing and only a few, mainly Nordic countries, have been successful to guarantee a high female employment rate with a significantly lower pay gap. This led Andor to the conclusion that apart from distributing working hours between men and women more equally, incentives for an equal distribution of unpaid housework are as necessary as child-friendly working hours and affordable childcare.
Harsh criticism aimed at policy of “internal devaluation”
The report and its presentation by László Andor could also be understood as implicit criticism of his colleague, the Commissioner for Economic and Monetary Affairs Olli Rehn and the predominant economic policy in Europe. Whilst Rehn regards falling household incomes and the flexibilisation of labour markets as a success, which - euphemistically characterised by “internal devaluation” - rebuilds the competitiveness of the countries affected by the crisis, the Commissioner for Social Affairs made it clear that such a policy would kill off internal demand and at the same time would lead to unacceptable social consequences. Andor said that the policy of “internal devaluation” would not least be stretched to its limits and that it would require European instruments to jointly tackle such critical shocks in future.
Andor also took the wind out of the sails of those who try to blame the unemployed for unemployment rather than the crisis. In empirical terms, the study proves that the financial support of the unemployed by the public sector does not only weaken a slump in demand, but also makes it significantly more likely that a person finds a job again. However, the exact opposite is the case. The unemployed do not just laze around when they are receiving financial support.
As clear the findings of the report may be; they will not find their way into concrete policies of the Commission, which in spite of all political as well as scientific criticism firmly keeps to its policy of austerity and cuts.
Further information:
Report on Employment and Social Developments (EN)
The Commission’s report makes one thing clear - the social crisis is far from being over. Whilst some economic indicators point in a positive direction and the financial markets are booming again as if the crisis had never happened, poverty in Europa is still on the rise. Particularly alarming is hereby the fact that nowadays having a job is no longer a guarantee against poverty. The study proves that only about half the people being at risk of poverty, who find a job, are able to escape it. László Andor explained this situation with falling household incomes in Europe and an increase in part-time work. Hence, the number of unemployed, which is also falling in some South-European countries, does not necessarily result in an improvement of the social situation.
Another worrying realisation, which the report brings to light, concerns the still existing gender inequality. Admittedly, as mentioned in the report, the pay gap between women and men has slightly narrowed during the crisis. However, this is only thanks to the sad fact that male-dominated jobs were hardest hit by the crisis. Nevertheless, the differences are ongoing and only a few, mainly Nordic countries, have been successful to guarantee a high female employment rate with a significantly lower pay gap. This led Andor to the conclusion that apart from distributing working hours between men and women more equally, incentives for an equal distribution of unpaid housework are as necessary as child-friendly working hours and affordable childcare.
Harsh criticism aimed at policy of “internal devaluation”
The report and its presentation by László Andor could also be understood as implicit criticism of his colleague, the Commissioner for Economic and Monetary Affairs Olli Rehn and the predominant economic policy in Europe. Whilst Rehn regards falling household incomes and the flexibilisation of labour markets as a success, which - euphemistically characterised by “internal devaluation” - rebuilds the competitiveness of the countries affected by the crisis, the Commissioner for Social Affairs made it clear that such a policy would kill off internal demand and at the same time would lead to unacceptable social consequences. Andor said that the policy of “internal devaluation” would not least be stretched to its limits and that it would require European instruments to jointly tackle such critical shocks in future.
Andor also took the wind out of the sails of those who try to blame the unemployed for unemployment rather than the crisis. In empirical terms, the study proves that the financial support of the unemployed by the public sector does not only weaken a slump in demand, but also makes it significantly more likely that a person finds a job again. However, the exact opposite is the case. The unemployed do not just laze around when they are receiving financial support.
As clear the findings of the report may be; they will not find their way into concrete policies of the Commission, which in spite of all political as well as scientific criticism firmly keeps to its policy of austerity and cuts.
Further information:
Report on Employment and Social Developments (EN)