Beruflich Dokumente
Kultur Dokumente
Working Europe
2012
Brussels, 2012
Publisher: ETUI aisbl, Brussels
All rights reserved
Print: Imprimerie Bietlot s.a., B-6060 Gilly
D/2012/10.574/14
ISBN: 978-2-87452-262-8 (print version)
ISBN: 978-2-87452-263-5 (online version)
References..............................................................................................120
List of figures.........................................................................................128
List of abbreviations..............................................................................130
The Benchmarking Group..................................................................... 131
List of regions (NUTS 1) codes..............................................................132
3
Foreword
Foreword
As the great recession persists on its welfare states based on progressive taxa- inequality generated by the market, could
course and the European Union adjusts tion and insurance against social risks. come to form a positive strategy for the
its expectations to cope with a period of Yet another aspect of which it is im- future of the European Union and ensure
at best subdued growth, governments portant to be aware is that inequality, in that Social Europe was not merely one
are reacting by pushing for more auster- its varying manifestations, leads to a loss brief moment in history but that, on the
ity in the hope that such an approach of human potential in its broadest sense contrary, it continues to represent the un-
will serve the goal of a better future for as societies fail to provide equality, or derlying foundation on which European
the population of Europe. Meanwhile, structures that would serve to promote integration can build its future.
though inequality is rising as jobless- greater equality, thereby undermining We hope you will derive both inter-
ness becomes the everyday reality of the foundations for equal opportunities. est and benefit from your reading of this
many Europeans, job creation is tainted The disadvantaged groups in society, in years edition of Benchmarking Working
by sub-standard conditions, and social other words, are so far from enjoying the Europe.
protection systems are being cut back same opportunities as the advantaged
the widening gap between affluence and groups that society at large stands to miss
poverty does not appear to constitute out on the development of the human po- Bernadette Sgol
a major concern of the European govern- tential present within the former groups ETUC
ments in the context of their efforts to re- while, at the same time, the negative spill- General Secretary
duce debt levels and public deficits. over effects of the inequality suffered en-
Yet inequality was one of the root tail widespread adverse consequences for Maria Jepsen
causes of the great recession. Over the society at large. ETUI
past decades income inequality has There are thus several reasons to Director of Research Department
slowly but steadily increased, paving the justify a belief that inequality should be
ground for a growing instability within at the heart of all concerns about the fu-
Philippe Pochet
the economy. The stagnation in income ture direction of the European Union.
ETUI
affecting some sections of the popula- A forward-looking approach would be
General Director
tion, while other sections enjoyed a rapid one that supported and reinforced poli-
increase in especially capital income, cies and institutions designed to ensure
led to a constantly expanding demand that equality and not income equality
for credit, thereby fuelling the growth of alone is the foundation of any short,
an unsustainable credit bubble. While medium and long-term strategy. Build-
ways could have been found of contain- ing a common future on austerity and
ing this phenomenon had it developed in deregulation, and thereby laying the
isolation, the simultaneous deregulation ground for a vicious downward spiral of
of the banking system allowed financial deteriorating social and labour rights, is
institutions to create new instruments certainly not the right way forward for a
their workings impenetrable to the rest prosperous and more egalitarian Europe.
of the population in which those who Benchmarking Working Europe,
continued to get richer could invest their which first appeared in 2001, represents
increasing assets. This cocktail created a contribution to the EU Spring summit
a bubble-economy which burst in 2007. by providing a genuine benchmarking
This financialisation of the econo- exercise applied to the world of labour
my is, however, far from being the only and social affairs and grounded in ef-
dimension of rising inequality that gives fective labour and social rights. It aims
cause for concern. at establishing what progress or lack
Growth in inequality leads to an of it has taken place in selected areas
accumulating sense of injustice and of importance to the trade unions and
lack of social cohesion both within and of significance for a social Europe. This
across countries. The fair distribution of years edition of Benchmarking Working
resources is something that matters to Europe, in choosing to focus on the single
people, within their own countries espe- issue of inequality, nonetheless takes in
cially, but also across borders and within a wide range of areas extending far be-
the world at large; when gaps in income yond the question of income inequality
distribution are perceived as becoming alone. While raising serious concerns as
too wide, the sense of injustice can gener- to the direction currently being taken by
ate mistrust and even lead to unrest be- social and labour rights in the European
tween individuals and groups within so- Union, this report points also to ways in
ciety. The need to forestall such outcomes which policies, institutions, and the politi-
is one of the main reasons why govern- cal will to contain market inequalities and
ments have put in place redistributive provide ways of offsetting other forms of
4
Introduction
Introduction
During much of the period when west- ity to which various international or-
ern Europe was prosperous and highly ganizations (OECD 2011a; European
developed, the challenge represented Commission 2012) have already drawn Characteristics
by social inequality was regarded as attention even in European countries
secondary, insofar as this problem with more egalitarian traditions such and causes of
would so the conventional wisdom as Germany, Sweden, Finland or Den-
went ultimately be eradicated by the mark. Above all, however, this exami- inequality
effects of continuing economic growth. nation conducted by the ETUI brings to
The question arose to a greater extent light, unlike other studies and reports,
in the English-speaking countries, the way in which the policy choices im- Crisscrossing inequality
which were less egalitarian (Piketti plemented in the EU weaken the mech- In Europe inequality is growing not
and Saez 2004), but in a manner too anisms that would facilitate the struggle only within each of the EU member
often confined to the monetary aspect against these forms of inequality and states but also between one country
alone. enable the crisis to be vanquished via or group of countries and another,
This edition of Benchmarking the route of cohesion and prosperity. In as shown by the chapter of this Bench-
Working Europe shows that social in- other words, the message delivered by marking Working Europe devoted to
equality is now worsening everywhere Benchmarking Working Europe 2012 macroeconomic developments. The crisis
in Europe, and not only on account of is that Europe is on the wrong path. naturally exacerbates these trends, gener-
the succession of financial, economic This brief introductory chapter ating economic outlooks that differ greatly
and debt crises. Inequality has been is structured in three parts: first of all, from one country to the next. Some have
growing since long before 2008 be- how and in what areas has inequality been much more severely affected than
cause the policies implemented over got worse? The nine chapters of this others by the debt crisis (Greece, Ireland,
more than twenty years in the Euro- edition of Benchmarking Working Eu- Italy, Spain), while growth prospects are
pean Union (EU) and its member states rope provide a multidimensional set of particularly poor in countries such as Slo-
have contributed to deepening social answers to this question: in the macro- venia, Romania, Hungary, or Denmark.
and pay disparities. While the crisis is economic sphere (Chapter I), in terms of Others have succeeded in returning to
amplifying and accelerating this de- labour market developments (Chapter their pre-crisis production levels: France,
velopment, the structural changes in 2), of education (Chapter 3), of wages The Netherlands, Belgium, Germany, and
income distribution were actually one (Chapter 4) and of poverty (Chapter 5), Austria. Yet others have actually achieved
of the factors that triggered the crisis. of transition to a low-carbon economic some economic growth during this period
It is becoming increasingly evident that model (Chapter 6), of regional dispari- (Poland, Sweden, Slovakia). Even so, in
policy choices in relation to growth ties (Chapter 7), of worker participation 2012 the outlook is bleak for most mem-
(based on competition and competi- (Chapter 8), and of health and working ber states; and for Greece and Portugal it
tiveness) and employment (based on conditions (Chapter 9). In its second is nothing less than a nightmare.
increasing labour market flexibility and part, this introduction considers the In spite of the austerity pro-
deregulation) lead to a weakening of question of political responsibility for grammes now in place right across the
social cohesion and greater inequality the growing inequality and weakening EU, the public-debt-to-GDP ratios,
in terms not only of income but also of of the mechanisms of social cohesion. far from declining, are expected to con-
education, training, access to the labour The third part, finally, seeks to exam- tinue to rise until 2013 in almost all
market, social security entitlement and ine how it might be possible to modify countries (see: Public debt crisis deepens
benefits, healthcare, etc. This evolution the non-egalitarian stance adopted by and expands, p. 14). Attempts to combat
is increasingly perceived, in a context of the EU and most of its member states, excessive deficits form indeed only one
austerity which affects the most vulner- in order to find a positive way of mov- of the three variables for a reduction of
able groups more severely, as a serious ing beyond the crisis. Such, indeed, is public debts, the two others being growth
form of injustice. the essence of the message delivered rates and the level of the interest rates
Such is the fundamental message by this report: there will be no lasting payable on the debt. At present growth
conveyed by this 2012 edition of Bench- way out of the crisis in the absence of rates are low and the situation is made
marking Working Europe. Since 2001 a reduction in inequality (Reich 2011). even worse by the austerity programmes
the purpose of this publication has been We should remember, after all, that, ac- implemented in the member states.
to assess the progress or lack of prog- cording to the Treaties, the purpose of In terms of income distribution,
ress in areas of importance for the the European Union is the promotion these austerity programmes have
trade union movement: employment, of employment, improved living and in some cases entailed regressive effects,
unemployment, working conditions, working conditions, so as to make pos- insofar as low incomes are more
wages, etc. This year, a meticulous ex- sible their harmonization while the im- severely affected by them than high
amination of these areas shows or provement is being maintained (Article ones. In a context of recession, the major
rather confirms the rise in inequal- 151 TFEU). risk in terms of social consequences is that
5
Introduction
austerity is likely to lengthen periods of ties in terms of income, health and to which such trends vary from country
unemployment, leading to labour market lifestyle (in particular the digital divide to country. Collective bargaining systems
exclusion or marginalization of the most that is widening all the time, see Closing in Europe differ from one member state
vulnerable groups and growing inequality. the divide in a digital age, p. 93). to another in terms of coverage rates, the
Indeed, as shown by Chapter 3 (e.g. sec- What we are witnessing is, accord- degree of centralization, the role of the
tion on Social and educational inequali- ingly, an aggravation of both internal and social partners in policy definition and
ties), long-term unemployment levels and external inequality. It is essential to real- implementation, etc.
low educational levels in households have ize that to resolve the crisis without In terms of pay, developments vary
an impact on poverty reproduction and reducing these forms of inequality strongly. Thus wages continue to rise in
social exclusion mechanisms. Children would be to allow the seeds of the the Nordic countries, in spite of the crisis,
living in households experiencing or next crisis to take root in the soil of while pay restraint can be observed in the
threatened by marginalization are Europe. These seeds could sprout in the countries of western and central Europe
less likely to achieve or gain access not too distant future and would further (Austria, Germany, Belgium, Luxem-
to higher levels of education. undermine could indeed cause collapse bourg, The Netherlands, Slovenia). In the
This trend is perceived as deeply of the legitimacy of the European inte- English-speaking countries (the UK, Ire-
unjust when we see the European Central gration project. land, Malta, Cyprus) wages have come to
Bank (ECB) deciding to subsidize the fi- standstill or even fallen, accompanied by
nancial sector (by offering loans direct- Quality of work and working conditions a high degree of volatility and reductions
ly to banks at very low interest rates) at Apart from the increasing disparities in in purchasing power in the countries of
the same time as the debt crisis is extend- terms of income, health, or lifestyle, the central and eastern Europe. Finally, wag-
ing to include countries that seemed be- development of inequality also affects es have been falling in keeping with the
yond its reach, leading to an ever increas- working conditions, at least for those who drop in productivity in the Mediterranean
ing number of austerity plans. are in work. An increasing number of countries (Greece, Spain, France, Italy,
Another effect of the crisis is that workers, in particular young work- Portugal). As such there exists real di-
we are witnessing a reversal of the trend ers, find themselves trapped in sub- vergence in wage developments be-
observed in recent years (before 2008) standard or insecure forms of em- tween different groups of countries
whereby the poorer EU countries were ployment: fixed-term contracts, tempo- since the crisis of 2008 (see Diverging
experiencing higher growth rates than the rary work, extended internships, etc. (see real wage developments in the EU, p. 66).
richer ones. In other words, the trend intensification of work, p. 114-115; Chap- In parallel, trends in terms
for the poorer economies to catch ter 2). Similarly, large numbers of women of the development of unequal in-
up with the richer ones, leading to find themselves exercising part-time jobs, come distribution display similar
greater convergence which would whether or not of their own volition. These divergence. Whereas income distribu-
have led to a convergence in per capita situations are likely to entail worse career tion tends to be more even in the Nordic
income has been halted and even prospects, an experience of job insecurity countries and the corporatist countries
reversed (see Trend towards greater and, ultimately, a deterioration of working of central and western Europe, it is more
equality between countries halted, p. 19). conditions in general. uneven in the Baltic countries, Romania,
After a few years during which inequality Chapter 9, focussing on working Bulgaria, the United Kingdom and some
among the EU member states was gradu- conditions, shows that the crisis con- southern European countries.
ally narrowing, the gulf between centre tributes also to work intensification, One particularly interesting obser-
and periphery is widening once again. additional forms of constraint and an in- vation is that, when examining the corre-
What is more, this gulf is deepen- crease in the phenomenon of presentee- lation between, on the one hand, the level
ing even within individual member states ism, that is, continuing to work during of collective bargaining coverage and, on
between their rich(er) and their poor(er) periods of sickness (see presenteeism is the other, income inequality, it becomes
regions. Chapter 7 on Regional inequal- a growing concern, p. 117). It is hardly clearly apparent that, the greater the cov-
ity in Europe shows, in particular, the surprising therefore that many workers erage, the lower the degree of inequality
exacerbated divisions between de- (almost 60%) believe that they will be un- and, by the same token, the lower the rate
mographically expanding areas able to remain in their job until the age of coverage, the wider the inequality (see
and rural regions, the latter being of 60. This observation, in the context of High bargaining coverage: an important
frequently less developed and suffering the deterioration of working conditions, factor for reducing inequality, p. 68).
from the loss of their most important re- is particularly striking at a time when the This factor should undoubtedly not be re-
source, namely their population. Apart EU is calling for a raising of the retire- garded in isolation when gauging income
from the demographic inequality (which ment age in most member states. inequality, for several other factors, such
naturally also entails inequality in terms as taxation and social security systems,
of infrastructures, mobility, environment, Wages and collective bargaining also play a significant role here.
and so forth), this chapter brings to light In the light of the above observations, it is It may, however, be concluded that
also the growth of regional inequali- particularly interesting to note the extent sound collective bargaining sys-
6
Introduction
tems do contribute to promoting dermine and disrupt social dialogue and The climate challenge
equal pay; and it may similarly be ob- collective bargaining (see Crisis: a pre- Finally, in addition to and beyond the cri-
served that the degree of centralization of text for deregulation, p. 109). sis, Europe has to deal with the extremely
bargaining tends to reduce wage volatil- For all this, the EU bears its urgent challenge of climate change, which
ity, while decentralization fosters greater share of responsibility, for the trade appears to be not directly linked to in-
volatility in this respect and hence has the unions are increasingly marginal- equality. And yet this transition, or
effect of amplifying economic cycles and ized in the new Europe 2020 strat- this green convergence, equally
divergences in the euro area and beyond egy, in which their consultation and nego- bears the stamp of inequality, both
(see Wage share stable only where bar- tiation role is less recognized than previ- external and internal.
gaining coverage is high, p. 70). ously under the Lisbon strategy. External green inequality: we know
Similarly, the remedies pre- that within the EU the poorer member
Role of trade unions and worker scribed by the EU Commission states emit less C02 per capita than do
participation and Council for exiting the crisis the richer ones. But at the same time
Contrary to the clich according to which contribute in most cases to weak- the poorer countries perform less well in
trade unions defend the acquired gains of ening the national social models: terms of resource productivity (see Di-
insiders (full-time workers on unlimited the EU calls for deregulation of labour vided Europe: resource productivity and
contract, civil servants) to the detriment markets, reform of labour codes, increas- per capita emissions, p. 83). How can in-
of outsiders (the self-employed, tempo- ing flexibility of work organization and creased green convergence be developed
rary and part-time workers, etc.), col- practices, reforms of social security and and speeded up in this context?
lective global action may be seen to social protection, reforms of collective Internal green inequalities are
contribute to a better overall distri- bargaining mechanisms, the introduc- linked to the questions of social exclusion
bution of income, and hence to a re- tion of new forms of employment con- tackled in Chapter 5: within the member
duction in inequality. tract, decentralization of collective bar- states the poorest population groups en-
This applies in a number of different gaining, etc. The labour market is chang- counter more housing, heating and en-
respects: broad collective bargaining cov- ing: part-time work is developing, affect- ergy problems (see The micro-dimension
erage (Chapter 4); introduction of mini- ing predominantly women, whereas it is of environmental inequality, p. 85-86).
mum wages in some countries; efforts to above all young people who are affected The principle of a fair transition must
eliminate gender inequality (including by fixed-term and agency contracts. In be based on an integrated approach that
in worker representation bodies, Chap- Poland, 60% of young workers employed combines in a balanced fashion the climate
ter 8); steps to counter the abusive wage on temporary contracts have accepted issue and the industrial policies and social
practices of certain employers (there be- this form of contract because they were and employment policies most appropriate
ing less evidence of excessive manage- unable to find a permanent job; in Portu- for accompanying this transition. Yet the
ment pay levels in companies where gal the figure is 70%, and in Spain 80%. responses to the crisis currently pro-
European Works Councils have been set What is more, short-hours contracts and vided in the forms of cuts and auster-
up) (see Worker participation: a way to other forms of sub-standard or semi- ity programmes risk undermining
gender equality and balanced boards, casual work are spreading in particu- such an integrated approach.
p. 105). It is necessary to place also on this lar among the relatively unskilled, the
list the social dialogue, both national and working poor; self-employment is en-
European, insofar as it tackles aspects of couraged but is frequently tantamount to
inequality as it affects the most vulner- increased insecurity, particularly among Weakening of
able groups (workers with disabilities, migrant workers (see Developments in
migrants, youth, etc.); worker participa- non-standard employment, p. 31-36). the mechanisms
tion; information and consultation, etc. Apart from the fact that it seems dif-
(Chapter 8). ficult under these conditions to advocate for reducing
In all these ways, the trade unions active labour market policies when it is
contribute to the fight to reduce inequal- obvious that the problem is less one of de- inequality
ity and injustice. But this contribution mand than of supply of jobs, it can be ob-
is made increasingly difficult by sev- served that the development of these and policy
eral factors: obstacles, often ideological in non-standard forms of employment
nature, placed in the way of trade union affects the more vulnerable groups responsibilities
activity, loopholes in European legisla- and leads to an increase in pay inequality,
tion (the provisions of the EWC directive, to greater social insecurity and sub-stan-
for example, are worded so as to tolerate dard employment, and ultimately to less According to the OECD, the most impor-
serious deficits in its implementation), cohesion and prosperity (see Outcomes tant general reasons for the exacerbation
but also trade union membership losses, of labour market inequalities in terms of of inequality include technological chang-
and the crisis itself, which is used to un- in-work poverty, p. 37-38). es that benefit primarily the most highly
7
Introduction
skilled workers; working conditions (de- fects, reversal of the past trend towards employment; of improving access to em-
regulation of labour law, development of increased convergence among member ployment for vulnerable groups and of-
non-standard contracts, etc.); changes states and regions, increasing employ- fering training to persons with few skills;
in the volume of work (development of ment insecurity, deterioration of working of recognizing also the importance of
part-time work, increased gap between conditions, calling into question of col- the role of social transfers, wage-fixing
highly paid and low-paid workers); and lective bargaining systems even though mechanisms, and workers bargaining
an increasingly ineffective use of taxation such systems contribute to the fostering power. At the same time, this entails
for the purpose of redistribution (OECD of income equality, weakening of national recognizing and encouraging the role of
2011a). Even if there is no formal consen- social models, and marginalization of social partners and trade unions in con-
sus on the academic level concerning the trade unions in the definition and imple- tributing to a fairer society.
role of globalisation in widening inequal- mentation of the strategic socio-economic It means, in a nutshell, simul-
ity, it can indeed be observed that the guidelines of the European Union and its taneously conducting both active
changes triggered by globalization have member states. employment policies and redistri-
frequently brought much greater gains to It is thus paradoxical, at the bution policies.
highly skilled than to low-skilled workers. very least, to seek now to assert be-
Since the 1980s, structural re- lief in the values of equality and so-
forms on the labour markets have been cial justice while at the same time
undertaken in most EU member states, weakening the systems and institu- When the tide is
initially for the purpose of reducing un- tions that allow these values to be
employment. These reforms were based fostered. Might it be that we are here in no longer rising
on relaxation of employment protection the presence of an implicit political choice
legislation (EPL), deregulation of product that would allow certain forms of inequal- for all
markets, lowering of minimum wages, ity to flourish, along the lines of the Ang-
revision of wage-fixing mechanisms, low- lo-Saxon model so frequently lauded for
ering of the replacement rates of unem- its competitiveness? Since the beginning of 2012 the European
ployment benefits, reduction of tax bur- In its report Employment and So- discourse on the crisis has increasingly
den entailed by the employment of low- cial Developments in Europe 2011, the placed the emphasis on the post-auster-
skilled workers. According to the OECD, European Commission acknowledges ity period, in other words, the expected
while these measures seem to have this phenomenon of increasing inequal- return of growth and employment. This
had a positive effect on overall em- ity. While pointing out that equality is an return, insofar as it is expected to take
ployment rates, they have, at the unavoidable fact of life, it stresses that a place, is made responsible for solving the
same time, contributed to the in- high level of inequality, or its rapid major outstanding problems: improve-
crease in wage inequality: all in all, widening, can be both economi- ment of public finances, convergence of
therefore, we have more jobs but, at the cally and socially harmful. It argues the economies, reduction in unemploy-
same time, more inequality. This long- that increasing inequality gives rise to ment and increase in the employment
term trend the increase in the overall problems of social cohesion (risks of so- rate, all of which will, according to the
employment rate does not, per se, serve cial unrest), threat to democracy (concen- official discourse, enable salvation of the
to reduce either inequality in household tration of wealth and power), and finally European social model. According to this
incomes or poverty rates (see also de Beer of economic stability (some economists approach, the broadening of inequality
2012) also calls into question the Euro- believe that the increase in inequality will have been a merely temporary phe-
pean discourse according to which a ris- was a contributory factor to the crisis, but nomenon and the return to growth will
ing employment rate is a means towards the Commission is at pains to stress that trigger a dynamic whereby inequality in
eliminating social exclusion and poverty: there is no consensus as to this interpre- its various forms will once again be re-
in actual fact, if it is to contribute to the tation). duced.
aim of reducing social exclusion, this in- The path of an improvement of Yet this discourse is mistaken in
crease must necessarily be accompanied living and working conditions and their that it places the stress on growth over
by an improvement in the quality of em- harmonization while improvement is and above equality, insofar as it conti
ployment and by redistribution policies. being maintained entails the need for nues to believe that the former will auto-
The economic paradigm underly- action on the social policy front but matically engender the latter. As things
ing the policies implemented over the last also in redistribution policy terms. It is currently stand, however, the tide is no
thirty years serves, ultimately, to widen a question of simultaneously restoring longer rising for the population at large:
inequality. Apart from the element of la- to tax policies their redistributive role growth is no longer reducing inequality;
bour market deregulation and less redis- and capacity, in particular via the taxa- the link between growth and equality has
tributive taxation, it is important to note tion potential offered by high and very snapped (Niechoj et al.2011). On the con-
the factors stressed in this report: auster- high incomes; of conducting job creation trary, the increase in inequality ex-
ity programmes entailing regressive ef- policies and improving the quality of perienced in the EU and its member
8
Introduction
9
Macroeconomic developments,
policies and inequality
Introduction
In 2011 we witnessed the spread of the public debt crisis within the euro area.
The central principle of the policy response to this crisis has been the escalation of
fiscal austerity programmes in those member states that received financial support
from the EU and the IMF and in those that have been facing increasing difficulties
in the financial markets in other words, pretty much everywhere. These fiscal
policies, in combination with the European Central Banks tightening of monetary
policy, have aborted the recovery that had been forecast for the area. The prospect
of a recession in the euro area in 2012 and, given the close economic inter-
dependence among member states, in the EU as a whole is now highly realistic.
The irony has been that the depressed demand conditions induced by fiscal austerity
in the euro zone have been making the task of consolidating public debts and
government deficits ever more difficult and costly.
This chapter, while reviewing these macroeconomic developments and policy
responses, also investigates their implications for income inequality between
EU member states. Is there any likelihood that the catching-up process in terms
of per capita output between poorer and richer EU member states will, under the
current and currently foreseeable macroeconomic conditions, continue?
Topics
10
Macroeconomic developments, policies and inequality 1.
Economic developments the crisis is not over
2
EU27
1 US
-1
-2
-3
-4
-5
2008 2009 2010 2011 2012 2013
11
Macroeconomic developments, policies and inequality 1.
Economic developments the crisis is not over
10,0
8,0
6,0
4,0
2,0
0,0
-2,0
-4,0
-6,0
-8,0
-10,0
-12,0
-14,0
-16,0
-18,0
PT PL GR EE HU UK IT DK FI EU ES SK EA CY SI MT RO CZ LU BG NL FR AT IE DE BE SE LT LV
27
12
Macroeconomic developments, policies and inequality 1.
Economic developments the crisis is not over
8
2011 2012 2013
6
-2
-4
-6
GR PT CY IT UK ES SI IE DK HU EA EU LU FR RO CZ NL MT BE BG DE SK AT FI SE PL LV LT EE
27
13
Macroeconomic developments, policies and inequality 1.
Deficits, debts and austerity
200
2007 2011 2012 2013
180
160
140
120
100
80
60
40
20
0
GR IT IE PT BE EA FR UK EU DE HU AT MT ES CY NL PL FI SI LV SK DK CZ LT SE RO LU BG EE
17 27
Notes: 1) The forecasts were finalised before the European Union Summit of 26 October 2011. Thus, they have not been updated to reflect the decisions taken at this summit which
will have a direct impact on the debt, the interest and the deficit projections as of 2012. 2) Euro area 3) Non-consolidated for intergovernmental loans amounting to 0.9 bn EUR in
2009 and 21.2 bn EUR in 2010
Source: AMECO (2011).
14
Macroeconomic developments, policies and inequality 1.
Deficits, debts and austerity
Austerity dragging
down public
finances
The combination of these factors means
that enforced fiscal consolidation is prov-
ing self-defeating in terms of reducing
fiscal positions (as foreseen in Theodoro-
poulou and Watt 2011).
As can be seen in Figure 1.5, the
discrepancy between total and primary
(i.e. excluding interest payments) gov-
ernment budget deficits has been par-
ticularly pronounced in member states
which received financial support from
the EU and the IMF, because of the large
interest payments. The primary budget
deficit in countries such as Greece and
Portugal has been spectacularly reduced,
even in the face of deep recession in their
economies, yet their total budget deficits
remained high and off-target, while their
public-debt-to-GDP ratio also increased.
15
Macroeconomic developments, policies and inequality 1.
Macroeconomic policy responses
EE 3
RO
LV
2
16
Macroeconomic developments, policies and inequality 1.
Macroeconomic policy responses
5
PT
GR 4
PL 2
y = -0,3711x + 0,1331 RO IT
ES UK SK
R = 0,3242 EU27 IE EA17
CY CZ 1
LV FR LT
BG NL DE
HU MT
SI FI AT
LU EE SE 0
BE
DK -1
-2
-9 -8 -7 -6 -5 -4 -3 -2 -1 0
output gap (% potential GDP)
17
Macroeconomic developments, policies and inequality 1.
Monetary policy
Figure 1.8 Spreads of selected countries 10-year government bonds over German bonds in p.p. and ECB main refinancing rate
34
32
30 3
28 ECB MRR
26 (right-hand scale)
24 GR
22
20 2 PT
18
16 IE
14
12 IT
10 1
8
ES
6
4
2 FR
0 0
201001
201001
201002
201003
201003
201004
201005
201005
201006
201007
201007
201008
201009
201010
201010
201011
201012
201012
201101
201102
201102
201103
201104
201104
201105
201106
201107
201107
201108
201109
201109
201110
201111
201111
Source: IMK (2011: 8) and ECB.
18
Macroeconomic developments, policies and inequality 1.
Output growth and cross-country inequality
Figure 1.9 GDP per capita growth rates 2000-2007 by level of GDP per capita 2000
120
RO y = -0,0035x + 106
LV EE
LT R = 0,7228
% change in GDP per capita 2000-2007
100
BG
SK
80
60 CZ
PL HU
IE
GR ES
SI
40 CY
FI NL
PT SE
EU15 DE
MT UK AT
EU27 EA
20 FR DK
BE
IT
0
4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000 22.000 24.000 26.000
GDP per capita 2000 (euros PPS)
19
Macroeconomic developments, policies and inequality 1.
Output growth and cross-country inequality
Figure 1.10 GDP per capita growth rates 2008-2010 by level of GDP per capita 2008
10 PL
y = 3E-05x - 3,7911
% change in GDP per capita 2008-2010
8 R = 0,0029
6
4 MT
2
SK PT BE
0 CY FR DK
BG EU27 DE AT NL
-2 HU EU15 UK SE
FI
-4 ES EA
RO CZ
GR IT IE
-6 LT
EE
-8 SI
LV
-10
8.000 13.000 18.000 23.000 28.000 33.000
unemployment
threatening poverty
headline target
As Figure 1.10 illustrates, however, after
2008, the GDP per capita growth rates
converged between rich and poorer
member states, turning very negative for
some of the poorest central and eastern
European countries, such as Latvia and
Estonia, while some wealthy countries
(Belgium, Germany) performed com-
paratively well. Overall, for this period
there is no relation whatsoever between
income levels and their rate of growth.
These figures clearly suggest that the
convergence process in real per capita
income that is, a clear trend towards
falling inequality between national
populations across Europe has come
to a halt. What is unclear is whether the
convergence process will continue once
more if and when the European economy
as a whole emerges from crisis. While
this does not necessarily affect the issue
of within-country inequality (see also
Chapter 7), the combination of sluggish
growth, mass unemployment and cut-
backs in welfare spending is unlikely to
20
Macroeconomic developments, policies and inequality 1.
Conclusions
21
Inequality on the labour market
Introduction
Labour market opportunities are unequally distributed not only among European
countries, but also over different sub-groups. This is true of access to the labour market
i.e. employment, but applies also to the types of jobs people get, including aspects such
as the accompanying form of contract, working hours, and benefits entailed, in terms of
earnings in particular, but also of social security and fringe benefits. Inequalities also per-
sist when looking at unemployment rather than employment, with specific groups being
more likely to enter and remain in unemployment.
The new Europe 2020 strategy drawn up by the EU as a follow-up to the Lisbon
strategy which ended in 2010 formulates some new ambitious headline targets (see
ETUC and ETUI 2011). Both the employment rate target (75% for 20-64 year olds) and the
new poverty headline target (lifting 20 million people out of poverty) relate directly to
inequality. Whether these targets are realistic in terms of the current economic and labour
market situation remains questionable.
This chapter will, in the first section, illustrate how employment (including non-
standard forms of employment) developed over the Lisbon period for the EU27 as a whole.
In order to give an encompassing picture of forms of inequality on the labour market, the
main section describes developments in terms of employment, unemployment, part-time
and temporary employment and analyses these for single countries. Subgroups affected to
differing degrees by the various forms of inequality are taken into account. This applies,
in particular, to young people who face difficulties in entering and staying in work with
potential longer-term impacts on their wellbeing and welfare; and also to women who still
have much lower employment rates and work fewer hours than men in most countries, a
situation that is problematic with regard not only to earnings but also to social security
benefits and, in particular, pensions. Some analysis is also carried out on the basis of
educational and occupational groups. Finally, in-work poverty is shown for different sub-
groups in order to highlight the material outcomes of inequality on the labour market.
Topics
22
Inequality on the labour market 2.
Overview of labour market developments over the Lisbon
period
Figure 2.1 Developments in important labour market indicators over the Lisbon period, EU27, 2000, 2008, 2010, annual averages
90 45
left-hand scale 2000 2008 2010 right-hand scale
80 40
70 35
60 30
50 25
40 20
30 15
20 10
10 5
0 0
employment employment employment part-time part-time part-time temporary own-account unemployment
rate rate rate (total) (men) (women) employment self-employed
(total) (men) (women)
Source: Eurostat (2011j).
among other things, of the fact that that workers on fixed-term contract or in
women are very likely and everywhere temporary agency work were the first to
Labour market more likely than men to work part-time become unemployed as their contracts
(see below). Employment rates based were due to expire or easier to end than
outlook remains on full-time equivalents according to those of permanent workers. During the
which, for example, the Netherlands, with recent crisis period temporary employ-
bleak one of the highest employment rates for ment is again on the increase and, at 14%,
women as measured by the LFS, comes has returned to close to its pre-crisis
close to the bottom (compare ETUC and level. Own-account self-employment is
The first half of the Lisbon period saw ETUI 2011: Figure 2.3) are not com- another form of non-standard employ-
employment rates rising and unemploy- monly used. The simple employment rate ment often connected with precarious-
ment decreasing (Figure 2.1). However, target as formulated in the Lisbon strat- ness. It has, however, been increasing
much of the employment growth was egy, and now again in the Europe 2020 only slightly over the last decade, albeit
accounted for by non-standard forms of strategy, might thus be, to some extent at more rapidly during the crisis. Some
employment involving one or more ele- least, misleading. countries, notably Germany, have, in the
ments of precariousness. What is more, The incidence of non-standard context of active labour market policies,
the EU remained far from the ambitious forms of employment increased over actually devised incentives designed to
70% employment rate target set by the the Lisbon period and up to the begin- promote own-account self-employment.
Lisbon strategy for 2010. The average ning of the crisis. Part-time employment
employment rate, having risen to only as a percentage of total employment is
about 66% by 2008, with the crisis fell now around 19%, and thus 3 percentage
back down to 64.1% in 2010 (Figure 2.1). points up from 2000 (see also Chapter 8).
Differences between male and female It continued to grow during the economic
employment rates remain pronounced crisis, a fact attributable at least in part to
with, on average, 70% of men but only short-time working insofar as part-time
about 58% of women in employment. It work in the labour force survey is self-
is important to note, what is more, that assessed. Indeed, part-time work grew,
the basis commonly used by the Euro- proportionally, more among men (who
stat labour force survey for definition of were also more likely to be short-time
the employment rate is one hour of work workers) than among women, and yet
in the reference week (http://epp.euro- the gap remains huge with, on average,
stat.ec.europa.eu/portal/page/portal/ 32% of women working part-time in the
employment_unemployment_lfs/meth- EU27 and only about 9% of men. Tempo-
odology/definitions). In other words, rary employment, i.e. all employment of
employment rates fail to take account fixed duration, also grew over the Lisbon
of the volume of employment and thus, period and up till 2008, with the result
23
Inequality on the labour market 2.
Overview of labour market developments over the Lisbon
period
Figure 2.2 Development of unemployment over Lisbon period for sub-groups, annual averages 2000-2010, EU27
45,0
40,0
35,0
long-term unemployment as % of unemployment
30,0 youth (15-24)
migrant (non-EU27)
25,0
lowest education (ISCED 0-2)
20,0 migrant (EU27)
15,0 total
men
10,0
women
5,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Note: if not stated otherwise age: 15-64 year.
Source: Eurostat (2011j).
this area become apparent when com- the Lisbon period women were invariably
pared with an unemployment rate of more likely to be unemployed on average
Labour market around 12% among EU27 migrant work- and in the majority of countries. Indeed,
ers who, in principle, have free access to the initial crisis period saw employment
outlook remains EU labour markets, with the exception losses particularly but not exclusively
of the transition measures that are still in male-dominated sectors such as
bleak in place in several countries for Roma- construction and manufacturing. How-
nia and Bulgaria and have only recently ever, women have been more affected in
been fully lifted for the central and the more recent period as the crisis has
While employment was growing over eastern European countries that gained spilled over to other sectors and austerity
most of the Lisbon period, unemploy- EU accession in 2004. Migrant workers measures have focussed on female-dom-
ment was, on average, declining. In 2008 work, to a considerable extent, in sectors inated public-sector employment.
it had reached its lowest point of 7.1 per such as construction or manufacturing Long-term unemployment (>12
cent on average but, with the economic that were seriously affected by the eco- months) currently stands at close to 40%
crisis kicking in and some sectors being nomic crisis and were, as such, dispro- as a percentage of total unemployment. It
strongly affected, it increased dramati- portionally affected by unemployment was at a relatively stable high level during
cally over the last two years of the Lisbon (Galgoczi et al. forthcoming). It should the first period of Lisbon and decreased
period by 2.6 percentage points to an be borne in mind that the labour market significantly as the crisis set in, a fact
annual average of 9.7% in 2010. Figure situation of migrant workers is difficult that can be easily explained by the large
2.2 illustrates the development of unem- to capture insofar as they are prone to numbers of newly unemployed enter-
ployment over the last decade. The steep returning home, or to moving further ing the pool of unemployed. In the last
increase between 2008 and 2009 is evi- afield, in times of crisis. They are, what year it has increased strongly by about 7
dent for all groups. Between 2009 and is more, commonly underrepresented in percentage points as the unemployment
2010 unemployment is still increasing for survey (and administrative) data, par- generated by the crisis has become more
all groups, but at a slower pace. It is obvi- ticularly if they are working in the infor- permanent. Those countries that were hit
ous that unemployment is not equally mal economy. Another group with higher particularly hard and early by unemploy-
spread over sub-populations. Youth than average unemployment rates are ment (Spain, Ireland, Baltic countries)
here defined as those aged between 15 those with the lowest educational level saw their long-term unemployment rates
and 24, in spite of the fact that the 25-29 (ISCED 0-2: pre-primary, primary and increase markedly by as much as 20
age group also often still struggles on lower secondary education). Unemploy- percentage points between 2008 and
the labour market (compare Chapter 3) ment among this group has increased 2010 (not shown).
have had the highest unemployment disproportionally and is currently about
rates, close to 21% in 2010. They are 16%. This said, the group also has very
followed closely by non-EU27 migrant low employment rates (see next section).
workers who have an average unemploy- In 2010 women and men had, on average,
ment rate of close to 20%. Differences in the same unemployment rates, while over
24
Inequality on the labour market 2.
Recent developments in employment
90
2008Q2 2010Q2 2011Q2
80
70
60
50
40
30
20
10
0
HU GR IT MT BG ES RO IE SK PL LT LV BE LU FR EE SI EU PT CZ CY UK FI AT DE DK SE NL
27
Note: 15-64 years.
Source: Eurostat (2011j).
25
Inequality on the labour market 2.
Recent developments in employment
Figure 2.4 Developments in employment of older workers (55-64 years), 2008Q2, 2010Q2, 2011Q2
80
2008Q2 2010Q2 2011Q2
70
60
50
40
30
20
10
0
SI MT HU PL IT LU BE RO GR SK FR AT BG ES EU PT CZ LT IE LV NL EE CY UK FI DK DE SE
27
26
Inequality on the labour market 2.
Recent developments in employment
than male ones. Relatively small employ- measures such as flexible working hours
ment rate gaps are also evident in Latvia, and more equal participation of men
Some reduction in Estonia, Finland, Denmark and Swe- in care and household work, do play an
den. Huge employment rate gaps exist in important role here as the example of the
gender employment Malta, Greece, Italy, Luxembourg and the Nordic countries shows (OECD 2007;
Czech Republic. Greater gender equality for country differences in institutional
rate gaps during the in terms of employment is attributable, setting such as childcare see www.oecd.
however, merely to disproportionate org/els/social/family/database; see also
crisis but large deterioration in the situation of men. Chapter 5). Corporatist countries, such as
Overall, countries vary hugely in Belgium and France, with encompassing
gender inequality terms of female employment rates with child care but comparatively low female
a gap of more than 30 percentage points employment rates show that it is an inter-
remains between the worst performer, Malta, and action of different institutions at the state
the best performer, Sweden; even when and firm level, but also values and norms
using the full-time-equivalent methodol- with regard to the participation of men
The economic crisis has, on average, con- ogy, these differences remain great (see in care work (Leschke and Jepsen 2011),
tributed to reducing the gap in employ- ETUC and ETUI 2011: 23). Three coun- that contribute to closing the gap between
ment rates between men and women, tries have female employment rates of male and female employment rates. Pub-
insofar as men were more likely to lose less than 50% (more than 10 percentage lic policy decisions such as reserved part-
their employment, particularly in the points below the Lisbon female employ- ner months in parental leave schemes,
first two years of the crisis (Figure 2.5). ment rate target of 60%), namely, Malta, but also awareness campaigns, can con-
While the difference in employment rates Greece and Italy, while the countries at tribute to a change albeit slow in val-
was 14 percentage points in 2008Q2 the top with employment rates of close to ues and norms.
(72.9% for men and 58.9% for women), it 70% or more are the Netherlands, Swe-
had fallen to 11.5% in 2011Q2 (70.2% for den and Denmark. Looking at country
men and 58.7% for women). Employment groupings, with regard to female employ-
gaps between men and women have nar- ment rates, the Nordic countries, but also
rowed in all countries and very substan- the Netherlands and some corporatist
tially so in a number of countries, such as countries Germany and Austria are
Spain, Lithuania and Latvia, as a result doing well, whereas particularly South-
of the disproportional losses in employ- ern European countries (Malta, Greece,
ment for men due to the uneven affected- Italy, Spain), but also the majority of Cen-
ness of sectors and the remaining large tral and Eastern European countries, are
gender segregation in terms of sectors doing badly. Publicly supported work-life
and occupations. In Lithuania female balance measures, particularly encom-
employment rates are now slightly higher passing and all-day childcare, firm-level
27
Inequality on the labour market 2.
Recent developments in employment
low (ISCED 0-2) medium (ISCED 3-4) high (ISCED 5-6) total
90
80
70
60
50
40
30
20
10
0
HU GR MT IT BG ES RO IE SK PL LT LV BE LU FR EE SI EU PT CZ CY UK FI AT DE DK SE NL
27
Note: 15-64 years.
Source: Eurostat (2011j).
28
Inequality on the labour market 2.
Recent developments in employment
Figure 2.7 Developments in unemployment for youth and adults, 2008Q2 and 2011Q2
50
youth 2008Q2 youth 2011Q2 total 2008Q2 total 2011Q2
45
40
35
30
25
20
15
10
5
0
NL AT DE SI DK MT BE CZ LU UK CY EU FR RO EE HU PL BG FI SE PT IT IE SK LV LT GR ES
27
Note: youth: 15-24 years, adults: 25-64 years.
Source: Eurostat (2011j).
Chapter 3). The large incidence of unem- only at the recent changes 2010Q2-2011Q2
ployment among youth is particularly (not shown), quite a number of countries
Bleak labour visible when the issue is viewed country see some stabilisation of youth unem-
by country. Indeed, in roughly half of all ployment albeit at a higher than pre-
market situation countries one quarter or more of young crisis level or even a decline, most
people are unemployed. In Greece and notably the Netherlands, Slovenia, Bel-
for youth and only Spain, two of the countries most affected gium and Estonia. Portugal and Greece,
by the economic crisis, youth unemploy- on the other hand, have seen very large
slow improvements ment rates are as high as 43.1% and 46.1%, increases in the course of the last year.
respectively. They have approximately All these developments show, quite une-
doubled in a three-year period which has quivocally, that young workers have been
With an unemployment rate of 20.8% in led to, among other things, protest move- one of the groups most vulnerable to ine-
2011Q2, young people (15 to 24 years) in ments fuelled predominantly by youth. quality, a situation that has been further
the EU27 have an extremely high level Other countries that have seen a strong aggravated by the crisis.
of unemployment compared to prime- increase in their youth unemployment
age (25-54 years) and older workers rates during this period are the Baltic
(55-64) total unemployment stood at countries, Ireland, Bulgaria and from
9.4% in 2011Q2 (Figure 2.7). The unem- initially rather low levels the Czech
ployment figures used here are based Republic, Denmark and Cyprus. Only
on the LFS data and thus refer to self- three countries have youth unemploy-
assessed unemployment. This differs ment rates below 10% in 2011Q2, namely,
from the national figures that are often the Netherlands, Austria and Germany,
based on administrative data and thus the latter two benefitting from the exist-
take account of people registered as ence of strong dual-education systems
unemployed at the Public Employment that are known to improve transitions
Service. Over the last three years, youth from school to work by providing youth
unemployment increased by more than 5 with specific skills that they acquire
percentage points, whereas total unem- directly in the work place. Those firms
ployment increased by 2.5 percentage that offer apprenticeship training can at
points between 2008Q2 and 2011Q2. the same time use this phase as screen-
Though the relative change was similar, ing for recruiting their future workers
in absolute levels youth are clearly one of (Germany is indeed the only country that
the most disadvantaged groups in terms has seen youth unemployment decline
of labour market outcomes, particularly over the 3-year period, and declines in
when we also take account of the large total unemployment were even slightly
decreases in employment rates (see also more marked in this country). Looking
29
Inequality on the labour market 2.
Recent developments in employment
30
25
20
15
10
0
CY CZ AT SI IT UK DE LU NL IE FI GR EU DK LV PT FR BE EE SE ES
27
Note: 15-64 years.
Source: Eurostat (2011j).
mind, therefore, that the available data impact on sending countries labour mar-
does not fully capture the phenomenon, kets when shortages arise due to a lack of
Migrant workers it emerges from the LFS data that close skilled labour, obvious examples being
to one quarter or more of non-EU27 the medical or care sector. From the
and particularly migrants are unemployed in France, LFS data it is evident that in the major-
Belgium and Estonia, while in Sweden ity of countries with available data EU27
those from outside and Spain the proportions are around migrants are more affected by unemploy-
one third. The case of Sweden is partic- ment than nationals but, in most cases,
Europe hard hit ularly striking in that the gap between less than non-EU27 migrants. EU27
nationals and non-EU27 migrant work- migrants fare particularly badly in Spain
by unemployment ers is extremely large. Cyprus, the Czech where the construction sector, in which
Republic and Austria, meanwhile, have large shares of migrant labour were
comparatively low shares of unemploy- concentrated before the crisis, has been
Inequality in labour market outcomes ment among this group. As various publi- badly affected by the economic crisis.
is also evident with regard to migrant cations (see particularly Fihel et al. 2009)
workers. Compared to nationals (declar- and also newspaper articles indicate,
ing country) with an EU27 average unem- cross-border labour mobility between
ployment rate of 8.9%, EU27 migrants EU27 countries has been a subject of hot
had unemployment rates of 11.2% and debate in Europe over the last half dec-
migrants from outside the EU27 unem- ade. One issue that was pertinent in the
ployment rates as high as 19.6% (Fig- pre-accession period related to fears on
ure 2.8). A first point to note is that the the part of Western European countries
data situation with regard to migrants is that mobility from East to West as one
deficient. Important groups of migrant side-effect of the accession of the Central
workers, such as seasonal workers and and Eastern European countries would
undeclared workers, are hard to capture exert pressure on labour markets, wel-
in survey and administrative data. Even fare systems and wages. However, this
migrant workers who form part of the has overwhelmingly not been the case
regular work force are likely to be under- (compare Galgoczi et al. 2011; Fiher et
represented in survey data insofar as sur- al. 2009; Kahanec et al. 2009). Another
vey questionnaires are usually circulated hotly debated issue is skills mismatch,
only in the language of the host country. with migrant workers often working in
The labour force survey provides data occupations that do not match their skill
on this subject for 20 EU countries only levels (Galgoczi et al. 2009). This will
and in four of these cases information have negative individual impacts in the
on EU27 migrants is lacking. Bearing in long run but can also have a negative
30
Inequality on the labour market 2.
Developments in non-standard employment
80
men women total
70
60
50
40
30
20
10
0
BG SK CZ GR HU PL LT LV CY SI RO EE PT MT FI ES IT FR LU EU IE AT SE BE DK UK DE NL
27
Note: 15-64 years.
Source: Eurostat (2011j).
18.8% on the EU27 average with a large Nordic and corporatist countries are
gap between the percentages of male more evenly spread around those coun-
Part-time (8.1%) and female (31.6%) part-timers tries with very high and average shares.
in the total employed population (Figure Average part-time hours are around 20
a common 2.9). There are huge inter-country differ- hours a week. Among the countries with
ences in terms of the volume of part-time high part-time shares Sweden and Bel-
feature of female work, with shares below 5% in Bulgaria, gium stand out with on average very high
Slovakia and the Czech Republic and as part-time hours (24.6 and 23.6, respec-
employment high as 48.5% in the Netherlands. (It has tively), whereas Germany, Denmark and
to be noted, however, that, while the dis- Ireland have low average part-time hours
tinction between full-time and part-time with 18.1, 18.8 and 18.9, respectively (not
Non-standard employment, as one of work in the LFS is for most countries shown).
the contributing factors to employment based on a spontaneous response, this As regards the gender distribu-
growth over the 2000s and up to 2008, is not the case for the Netherlands nor tion, nine countries have at least every
has been widely debated, and not only for Iceland or Norway where part- third women in part-time employment:
at the level of trade unions (precarious time is determined by whether or not in ascending order Ireland, Luxembourg,
employment) for it has been acknowl- usual weekly working time is less than Denmark, Sweden and with shares of
edged as problematic also by the Euro- 35 hours (compare Eurostat online sur- more than 40% the UK, Austria, Bel-
pean Commission (European Com- vey, definitions), and this is a detail that gium, Germany, and the Netherlands
mission 2006). Non-standard forms of may, to some extent, affect the results). (76.4%). The Netherlands is the only
contract are often associated with pre- Another six countries, namely, Germany, country that has a substantial share of
carious employment which is usually the UK, Denmark, Belgium, Sweden and men in part-time work close to one
defined as employment with low wages Austria, have about a quarter of the pop- quarter of employed males. In Sweden,
and/or limited job security, limited ulation in part-time work. With regard Denmark, the UK and Ireland part-time
access to social benefits, training and to country groups, central and eastern shares of men exceed 10% but remain
career opportunities, health and safety European countries do not commonly very low compared to female part-time
and/or collective interest representation. make use of part-time employment and shares.
For this reason, this section takes a closer all have part-time shares of less than
look at part-time and temporary workers. 10%. One explanatory factor here may
Part-time employment has been on the be the economic need to work full-time
increase over the last decade, not least to make ends meet, and another the fact
due to increasing female labour force that full-time work for women, supported
participation, and has continued to grow by encompassing childcare policies, was
during the economic crisis (Figure 2.1). previously the norm in these countries.
In 2011Q2 part-time employment as Southern European countries have
a share of total employment stands at below average part-time shares, while
31
Inequality on the labour market 2.
Developments in non-standard employment
60
men women total
50
40
30
20
10
0
total legislators, professionals technicians clerks service workers skilled craft and plant and elementary
senior officials and associate and shop and agricultural related trades machine occupations
and managers professionals market sales and fishery workers operators and
workers workers assemblers
Note: 15-64 years.
Source: Eurostat (2011j).
32
Inequality on the labour market 2.
Developments in non-standard employment
Notes: No or very incomplete data by occupation for IE, HU, UK, BG.
: - No data.
Source: Eurostat (2011j).
countries display high part-time shares. The for technicians and associate professionals,
Netherlands is a notable exception, since among whom more than one third of women
Segregation in here every second female legislator, senior work part-time in seven countries (in addi-
official or manager, two thirds of women in tion to the Netherlands), namely, Denmark,
female part-time professional occupations, as well as three Luxembourg, Sweden, Austria, Belgium and
quarters of female technicians and associ- Germany. Large shares of women also work
employment by ate professionals, work part-time. The next part-time in these same countries in occu-
highest female part-time shares of legis- pations that require medium-level skills,
occupation lators, senior officials and managers are particularly service workers and shop and
recorded in Austria where one in every five market sales workers and clerks. On the
working women is part-time. Among pro- lower educational end of the scale, elemen-
Figure 2.11 shows country-specific outcomes fessionals part-time work among women is tary occupations stand out, with Denmark,
by occupation. Results are shown for women more common, with (in ascending order) Austria, Belgium and Germany recording
who constitute the bulk of part-time workers. Sweden, Germany, Austria and Belgium around two thirds or more of female workers
In occupations requiring high educational having around one third or more of women employed part-time; the share in the Nether-
levels managers and professionals few professionals in part-time. The same is true lands is higher than 90% (see next section).
33
Inequality on the labour market 2.
Developments in non-standard employment
70
60
50
40
30
20
10
0
RO LT BG EE MT UK LU SK LV CZ BE AT DK HU IE GR IT CY EU DE FR SE FI SI NL PT ES PL
27
Note: youth: 15-24 years, adult: 25-64 years.
Source: Eurostat (2011j).
34
Inequality on the labour market 2.
Developments in non-standard employment
Figure 2.13 Main reason for temporary employment (%) for youth, 2010
probationary period in education or training did not want a permanent job could not find permanent job
100
90
80
70
60
50
40
30
20
10
0
AT DE SI NL DK LU EU EI IT FI FR MT SE UK PL HU BE BG GR RO LV CZ CY PT SK ES
27
Note: results are in many cases unreliable.
Source: Eurostat (2011j).
35
Inequality on the labour market 2.
Developments in non-standard employment
36
Inequality on the labour market 2.
Outcomes of labour market inequalities in terms of in-work
poverty
Figure 2.15 In-work poverty for employed persons by subgroup, EU27, 2009
20
18
16
14
12
10
8
6
4
2
0
medium (ISCED 3-4)
total
permanent
full-time
18-24
25-54
55-64
men
women
part-time
single
without dependent
temporary
children
gender age education household type type of contract
37
Inequality on the labour market 2.
Outcomes of labour market inequalities in terms of in-
work poverty
Figure 2.16 In-work at-risk-of poverty for employed persons, developments for youth, 2008-2010
30
youth (18-24) 2008 youth (18-24) 2010 total 2010
25
20
15
10
0
FI CZ BE AT NL HU SI IE* SK MT EE SE DK FR UK CY* DE BG EU IT LV PT LU PL LT ES GR RO
27
* Data for IE and CY refer to 2009 instead of 2010.
Source: Eurostat (2011g).
38
Inequality on the labour market 2.
Conclusions
39
Education and inequality in Europe:
a youth perspective
Introduction
At the launch of the Lisbon Strategy, R. Atkinson and S. Davoudi (2000) commented
on the way the concept of social exclusion had gained increasing currency in the European
Union discourse. While pointing out the instrumental role played by this concept in shift-
ing the debate from mere income inequality to the incorporation of the social and cultural
dimensions of exclusion, these authors stressed also that European debates on social exclu-
sion had reached a crossroads: on the one hand, it could be that social exclusion would
come to be viewed as the result of peoples deviant social behaviour which served to limit
European economic growth and competitiveness; on the other hand, the concept might
well gain in complexity through increased attention being paid to the manifold causes and
multi-faceted nature of inequality (associated with labour market, welfare systems, family
and community structures, as well as entailing a significant geographical aspect).
More than ten years later, Atkinson and Davoudis observations remain highly topical
and are more relevant than ever. The Lisbon strategy intended to substantially contribute
to increased economic growth and social cohesion failed to achieve its goals, not least the
educational and social ones. At the present time, the new Europe2020 strategy will, in all
probability, prove even more difficult to implement since not only do its goals appear more
challenging but the existing inequalities are likely to be exacerbated still further as a result
of the ongoing crisis and austerity measures (see ETUC and ETUI 2011). Strong claims have
been made for the fundamental role of education in breaking the vicious circle of inequality
(Nicaise 2010), not only insofar as it serves to enhance labour market opportunities (higher
employment rates, better protection against unemployment and better jobs, see Chapter
2), but also because it exerts important positive spillover effects on the social dimension,
making people into healthier and more active citizens (OECD 2011b; Dee 2004). However,
the current crisis has shown that education does not always provide a crisis-proof shelter,
especially for fragile groups (e.g. youth and immigrants) who are paying a high toll in terms
of job losses (e.g. disproportionate rise in unemployment, see also Chapter 2) and uncertain
future prospects such as the risk of long-term unemployment and/or of in-work poverty.
Topics
40
Education and inequality in Europe: a youth perspective 3.
Labour market outcomes and educational attainment
Figure 3.1 Employment rate and changes by age and low educational attainment (ISCED 0-2), 2008-2010
60
50
40
30
20
10
-10
-20
ES DK SE IE PT EE NL LV UK FI GR LU EU IT LT AT BG CY HU DE FR BE SI SK CZ PL MT RO
27
Source: Eurostat (2011j).
the age effect resulting from young peo- Sweden, the Netherlands and the UK, youth
ples relative lack of work experience and suffered major reductions in employment
Education or age: disadvantaged position compared to older rates. In these countries rates have signifi-
workers. cantly decreased for youth with lower edu-
what is to blame? Figures (from 3.1 to 3.6) show how cation while less marked reductions were
inequalities in labour market outcomes recorded for adults. In Denmark, employ-
spread over two dimensions: between ment rates for youth fell from 62.9% in
The crisis has placed most European coun- generations (youth vs. older workers) 2008 to 51.8% in 2010; a similar trend was
tries in bleak labour market situations. and within generations (low-skilled vs. recorded in the Netherlands where the high
Other chapters (Chapters 2 and 7) provide medium/highly skilled). Figures 3.1 3.2 employment rate for youth 60.8% in 2008
quite extensive analysis of labour market and 3.3 show two age groups (young work- decreased significantly to 53.9% in 2010.
outcomes and developments for different ers 15-24/25-29 and adult workers 25-64) Despite similar employment contractions,
sub-groups (women, youths, migrant work- by level of education attained and changes in Sweden and in Ireland the initial rate
ers). Figures and data presented here aim of employment rate in percentages in was already significantly lower (in Sweden
at complementing this information with a 2008 and 2010 (downward bars). Changes 31.3% in 2008 and 20.8% in 2010; in Ire-
youth- and education-based perspective. in employment rate were included as they land 18.6% in 2008 and 9.2% in 2010). On
Youth employment and unemployment show more clearly the interesting develop- the EU27 average, meanwhile, the lower-
rates are known to be more influenced than ments which have affected not only coun- educated youth employment rate decreased
those of adult workers by fluctuations in the tries most hit by the crisis (Ireland, the by 3.5% (from 24.9% to 21.4%).
economic cycle (Lefresne 2003). The role of Baltic countries, Spain, Portugal), but also For most countries, lower-educated
education in reducing, preventing and bet- the less intuitive ones (such as Denmark). youth experienced the worst contractions
ter responding to changing economic needs Figure 3.1 shows negative changes in in employment, although in a few mem-
has been discussed and translated into sev- employment rates for low-skilled workers ber states, including the Baltic countries,
eral European-level initiatives focused on (ISCED 0-2, i.e. pre-primary, primary and low-skilled prime-age workers were the
the need to improve the overall skills level lower secondary education) in all EU coun- group most affected by the crisis. Con-
of young people (e.g. New skills for new jobs tries and for both age groups. Only Roma- tractions in employment rates among
(European Commission 2009d); ET2010 nia, Malta, Luxembourg and Cyprus present low-skilled young workers are due to job
and ET2020 (Council of the European modest increases, particularly for the adult losses in transport, warehousing, com-
Union 2002 and 2009) and the need to active population. Countries particularly munication, but also manufacturing and
increase the employability of young people hit hard by the crisis, such as Spain, Latvia, construction. Some exceptions Malta,
(European Commission 2011a); New Skills Estonia, Ireland and Portugal, present very Luxembourg, and Germany show no
for Jobs (European Commission 2010b); strong employment reductions for young reduction in employment rates for youth or
Youth on the Move (European Commission people ranging from -9.2% in Latvia to a very low one. This is in line with very low
2010f) as well as the European Employ- -13.6% in Spain. Nonetheless, also in coun- unemployment increases in these countries
ment Strategy taken as a whole). Education tries with overall at least before the crisis for both youth and prime-age workers (see
and training should in fact help to counter high employment rates, such as Denmark, Chapter 2).
41
Education and inequality in Europe: a youth perspective 3.
Labour market outcomes and educational attainment
Figure 3.2 Employment rate and changes by age and medium educational attainment (ISCED 3-4), 2008-2010
42
Education and inequality in Europe: a youth perspective 3.
Labour market outcomes and educational attainment
Figure 3.3 Employment rate and changes by age and high educational attainment (ISCED 5-6), 2008-2010
100
between 25 and 29 years, 2010 between 25 and 64 years, 2010
between 25 and 29 years, change 2010-2008 between 25 and 64 years, change 2010-2008
80
60
40
20
-20
IT ES HU BG RO SK GR IE LT LV EE EU CZ PL DK PT FI DE SI SE FR BE UK MT CY AT LU NL
27
Source: Eurostat (2011j).
in employment rates among the 25-29 and this cannot be done only by using
age group were less dramatic when com- aggregated data; nonetheless, some con-
Higher education pared to older workers rates. Again Ire- clusions can be drawn from the data pre-
land, Latvia and Spain show the highest sented: a) as expected, youth generally
and employment reductions for youth (around 10%), while show lower employment rates compared
Austria, Germany and Luxembourg to prime-age workers and have been
rates recorded either a very minimal reduction shown to be more affected by adverse
(-0.3% for Austria) or an increase (0.8% economic cycles; b) the lower-educated
for Germany and more than 7% in Lux- youth population have been most hard-
Figure 3.3 shows employment rates for embourg). The employment rate for this hit by the crisis; c) there are significant
highly skilled youths aged between 25 relatively young group decreased mark- differences in employment rates among
and 29 years old, compared to work- edly also in Denmark (- 9.1%). member states for both young and prime-
ers aged 25-64 (because Eurostat does Employment rates for young per- age workers; and finally d) in many mem-
not provide figures for the 30-64 age sons aged 25-29 years appear to be higher ber states young people, and especially
group, there is partial overlap of catego- than those for older workers. However, the youngest age group (15-24), who had
ries in this Figure). This older age group this is a distortion mainly due to low completed higher education were not
was chosen as representative of youth employment rates among workers aged protected against the crisis and were
because in several countries young peo- between 55 and 64 years old (19 countries more hard-hit compared to higher edu-
ple in the 15-24 age group are less likely have a less than 50% employment rate for cated adults.
to have completed their higher education this group, see Chapter 2, Figure 2.4). If
and do not commonly combine studies youth (25-29) are compared to prime-age
with work, a situation that will tend to (25-54) workers, differences in employ-
lead to underestimation of employment ment rates between youth and prime-age
rates and overestimation of unemploy- workers still emerge, but less markedly
ment rates (Lefresne 2003). so than for the youngest group (15-24).
This is also confirmed by differ- Tertiary education would appear to be
ences in employment rates among coun- least valued in Italy where the employ-
tries: in spite of being significant also for ment situation of graduates is by far the
the 25-29 group (at the one extreme Italy, worst in Europe: in 2010 only 54.2% of
with 58.8%, at the other The Netherlands, young people aged between 25 and 29
with 84.9%), the differential between years old were in work (-17.5% compared
the two extremes is smaller than for the with Greece which has the second lowest
15-24 age group (Italy 25.3%: Finland rate in Europe).
79% in 2010 Figure not shown). Age and education effects on
Compared to Figures 3.1 and 3.2 for employment (as well as unemployment)
the youngest group (15-24), the changes are difficult to disentangle completely
43
Education and inequality in Europe: a youth perspective 3.
Labour market outcomes and educational attainment
Figure 3.4 Unemployment rates by age (25-29) and high educational attainment (ISCED 5-6), 2010
education are very pronounced. For Data (from the Eurostat LFS, not
example, in Italy, Romania, and Slo- shown) comparing low, medium and
Youth on the labour vakia, young graduates are five to six highly educated young people aged
times more likely to be unemployed between 25 and 29 shows that high ine-
market: a dire than are adult workers. The most dra- qualities in unemployment rates within
matic developments in youth unem- this age group were already recorded and
situation ployment have been recorded in were exacerbated by the crisis. Lower-
Greece, rising from an already high educated youths were harshly affected
level of 24.6% in 2008 to 42.9% in 2010 by the crisis and their unemployment
As with the employment figures, age (data not shown). Data for highly edu- rates rose dramatically in Spain, Ireland,
groups with a given educational level are cated youth aged between 15 and 24 are Latvia, and Lithuania, to mention but
compared for unemployment rates. rather patchy. Moreover, it should be a few countries. Differentials in rates are
Data are structured by age group noted that figures for tertiary graduates indeed also marked in Germany, Hun-
(15-24 or 25-29 for youths and 25-64 for among the 15-24 age group might be gary, Belgium, and Poland. Highly edu-
adults) as well as by educational attain- overestimated for some countries, as no cated and medium-skilled adult workers
ment (low skilled workers with ISCED more than a small proportion of people generally present lower rates of unem-
0-2; medium skilled workers with ISCED in this group have already completed ployment compared to lower-educated
3-4 and highly skilled workers with terti- their studies (Lefresne 2003). and younger workers. However, their
ary education degree ISCED 5-6). As for the unemployment rate, the rates do not always differ substantially
Inequalities between age groups and rate for the 25-29 age group of highly and in some cases highly educated adults
level of education appear very significant. educated persons is shown. It is assumed have higher rates of unemployment.
Figure 3.4 shows the unemploy- that most people in this group have fin- In 2010, this applied to Italy, Cyprus,
ment rates for 2010 of active highly edu- ished their university studies and thus Denmark, Greece, and Slovenia, indicat-
cated young (15-24 and 25-29) and adult the unemployment indicator should be ing that higher education is not always
workers. From a comparison of this fig- less biased by a reduced active working a crisis-proof shelter even for workers
ure with the following Figure 3.5, it can population as denominator. with some degree of working experience
be seen that highly educated adults have Significantly unequal labour mar- that might be expected to prove an asset
been less affected by the crisis than lower- ket outcomes compared to adults are still in their attempt to return to the labour
and medium-skilled adult workers. very present: in Italy and Greece, as well market.
Despite their education, highly as in Spain, the rates are respectively
educated young workers have more 18%, 21.3% and 18%, thus still very high.
easily lost their jobs and are less likely However, other countries show markedly
to find another one than are adult lower rates for this older group of young
workers. In all member states, differ- people compared to the younger ones,
ences in unemployment rates between namely, the UK, but also, among others,
younger and older workers with tertiary Slovakia, Czech Republic and Belgium.
44
Education and inequality in Europe: a youth perspective 3.
Labour market outcomes and educational attainment
Figure 3.5 Unemployment rates by age and medium educational attainment (ISCED 3-4), 2008-2010
between 15 and 24 years, 2008 between 15 and 24 years, 2010 between 25 and 64 years, 2008 between 25 and 64 years, 2010
40
35
30
25
20
15
10
0
NL AT DE DK SI CZ UK FI CY EU SE BE FR BG PT PL HU RO IE IT SK EE GR LV LT ES LU
27
Note: Data for MT is missing; data for youth 2010 for LU is missing; data for adults 2010 is missing for RO.
Source: Eurostat (2011j).
Sweden the crisis has led to a significant and Greece with an unemployment rate
7% increase in unemployment among difference between the two age groups
Increased the young age group. The Czech Republic of 20.4% and 18.8% respectively. Most
and the UK, together with Finland and European countries have rates for young
unemployment Cyprus, have rates below an already high people with medium skills that are at
EU27 average (18.1%). least 10% higher than among adults (the
rates also medium- Changes from the initial rate of rate differential for the EU27 is 10.3%).
unemployment in 2008 are dispropor- Moreover, the increase in the rate for
skilled youth tionate and dramatic, in a few countries adults has been significantly less pro-
particularly so: Slovakia, for example, nounced than for young workers; only in
has doubled its initial rate in two years. the most affected countries (right-hand
In general, before the crisis the medium- In 2010 the remaining member side of the graph) was this older age group
skilled young (15-24) unemployed had states had youth unemployment rates of workers severely affected by job losses.
higher unemployment rates than the of between 6.4% (The Netherlands) and
medium-skilled older working popula- 12.9% (Slovenia). The Netherlands, Den-
tion (Figure 3.5). mark, Germany, Austria and Slovenia
In 2010, all countries saw their have a quite developed vocational train-
unemployment rates among young peo- ing system that tends to provide a very
ple increase significantly, with the single specific vocational education and thus
exception of Germany where the unem- ease the transition to often pre-deter-
ployment rate for this group of young mined jobs that exist in accordance with
middle-skilled workers actually fell labour market requirements. Despite this
slightly (0.7%). well-developed link with the labour mar-
The Baltic countries, as well as ket and very low rate of unemployment
Greece, Spain, Portugal and Slovakia, for this group in 2008, the economic
recorded the highest rates (between crisis has increased the unemployment
30.6% for Slovakia and 34.3% for Spain), rates among youth even in these coun-
but also in Italy and Ireland (both around tries: both Denmark and the Netherlands
26%), Portugal (21.3%) as well as in some had almost doubled their figures in 2010,
other Eastern European countries such the former rising from 6.1% to 11.5% and
as Romania, Poland, Bulgaria and Hun- the latter from a very low 3.6% to 6.4%.
gary, youth unemployment shares are It is important to emphasize that
above 20%. France, Belgium and Swe- differences between age groups are still
den also have rates of around 20%; the very dramatically disproportionate in
increase for Belgium and France between most of the countries. Among the most
2008 and 2010 was around 3%, while for striking examples in this respect are Italy
45
Education and inequality in Europe: a youth perspective 3.
Labour market outcomes and educational attainment
Figure 3.6 Unemployment rates by age and low educational attainment (ISCED 0-2), 2008-2010
60
50
40
30
20
10
0
NL AT CY DE DK RO MT SI LU PT EU PL IT GR FI UK BE FR SE BG HU CZ IE LV EE ES LT SK
27
Notes: data for EE for youth and adult for 2008 are from 2009
Source: Eurostat (2011j).
affected sectors have been construc- 24.6% for medium-skilled and 28.9% for
tion, hotels and tourism, as well as small highly skilled) than for the lower-skilled.
Low-skilled manufacturing industries, in which low- This might be partially due to a limited
and medium-skilled young workers are active population represented by this indi-
workers paying the predominantly employed. Nonetheless, cator (as previously commented, Lefresne
a more marked increase in unemploy- 2003), but also to the economic structure
highest price ment among highly-skilled youths might of the country where most of the job losses
appear in the annual Labour Force Survey were found in manufacturing industry but
for 2011, as an increase in unemployment also in the service sectors such as educa-
Figure 3.6 for low-skilled workers shows rates for the public and service sectors tion and health where low salaries prompt
that this group has paid the highest toll. was recorded in that year (see Chapter emigration (a drop of 16.5% among young
Both age groups (young and adult work- 2). In most of the countries young people teachers was recorded in 2009 (European
ers) were severely affected by the after- were more affected by crisis also because Foundation for the Improvement of Liv-
math of the crisis. Sky-rocketing unem- they are more likely to be employed on ing and Working Condition 2011), while
ployment figures for youth are found in fixed-term contracts, especially where a small rise was recorded in agriculture
Slovakia (67.3%), in the Baltic countries, labour market segmentation is particu- (5.6%). This has been explained by the
but also in Sweden and Spain, as well larly pronounced (see Chapter 2), which growing interest in the primary sector
as Ireland where rates rose above 40%. usually means that they are more easily among young people, who find it increas-
A series of countries, meanwhile, show dismissed in times of economic hardship. ingly difficult to enter the secondary and
relatively low unemployment rates for Fixed-term contracts for youth are often tertiary sectors (mostly involving young
low-skilled workers compared to many found in sectors such as hotels and tour- people with medium and higher skills).
other member states: in Germany, Aus- ism and retail which are heavily depend- However, the fact of being employed does
tria, Denmark, the Netherlands, Cyprus, ent on seasonal low-skilled work. Adult not preserve the young lower-educated
Malta and Romania these rates remain workers with at most an educational level Romanian from suffering in-work pov-
below or around 15%. In these countries, of ISCED 0-2 (pre-primary, primary and erty. The following section and Figure 3.7
rates for lower-skilled unemployed youth lower secondary education) saw their look at the social risks connected to lower
are equal to or lower than the average unemployment rate increase by between education.
rate for this group, meaning that they 1% (Austria) and 27% (Lithuania) between
present lower rates of unemployment 2008 and 2010. Among younger work-
compared to medium and high-skilled ers, only Germany, Romania and Lux-
young workers. Despite relatively lower embourg present slightly falling rates
rates for youths, the scope of changes for both groups between 2008 and 2010.
and the trend are quite important: in The case of Romania is particularly inter-
Denmark, for example, youth unem- esting as here the rate of unemployment
ployment increased by almost 50% over is significantly higher for medium and
two years. In many countries, the most highly educated young workers (in 2010
46
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
45
2010 ED0-2 2010 ED3-4 2010 ED5-6 total 2010
40
35
30
25
20
15
10
0
FI NL DK EE BE MT SE CZ AT IE SI SK UK FR PT CY HU DE IT EU ES LU LV LT BG GR PL RO
27
Note: CY and IE data from 2009
Source: Eurostat (2011g).
47
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
60
2010 2010 (region)
50
40
30
20
10
0
LU
AT1
AT2
AT3
NL1
NL2
NL3
NL4
FI1
EU27
GR
GR1
GR2
GR3
GR4
NL
DK
DE
AT
SE
FI
IE
BE
DE1
DE2
DE3
DE6
DE7
DE9
DEA
DEB
DED
DEE
DEF
SE1
SE2
SE3
BE1
BE2
BE3
FR
FR1
FR2
FR3
FR4
FR5
FR6
FR7
FR8
Note: Brandenburg, Bremen, Mecklenburg-Vorpommern,Saarland, Thringen, Aland are missing
Source: Eurostat (2011d).
60
2010 2010 (region)
50
40
30
20
10
0
EU27 UK UKC UKD UKE UKF UKG UKH UKI UKJ UKK UKL UKM UKN IT ITC ITD ITE ITF ITG ES ES1 ES2 ES3 ES4 ES5 ES6 ES7 PT PT1 PT2 PT3
48
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
conceal large
regional differences
Two interesting indicators, presented in
the following Figures (3.8, 3.9, 3.10 and
3.11, 3.12 and 3.13), can contribute to
highlighting the importance of educa-
tion in preventing social inequality (e.g.
at-risk-of-poverty) as well as unequal
labour market outcomes. These are the
Early School Leavers (ESL) and NEETs
(Not in Education Employment or Train-
ing) indicators. Both have been broken
down at regional level (NUTS1) in order
to highlight differences within coun-
tries, for the aggregate national levels
of ESL and NEETs fail to capture the
significance of the regional dimension.
Although data do not lend themselves
to the establishment of clear causal
relationships, it is widely recognised
that educational attainment and labour
market outcomes are also dependent on
the surrounding socio-economic situa-
tion (NESSE 2010). ESLs are indeed the
social outcome of complex economic,
social and institutional circumstances.
Studies (European Commission 2011a)
confirm that ESLs are more often living
in socially and economically disadvan-
taged areas (compare Chapter 7) and in
poor families. Consequently, they can
rarely benefit either from the support of
more highly educated parents or family
members or from quality education or
other extra-curricular activities. Moreo-
ver, the areas in question are often rural,
with poor connections to cities and infra-
structure such that young people might
also be discouraged from continuing in
further education given the long com-
muting distances. The local socio-eco-
nomic environment and educational pro-
vision are crucial in preventing, reducing
and tackling early school-leavers. Data
confirm strong regional inequalities in
almost all EU countries: pronounced dif-
ferences are found in bigger countries
and mostly in the southern and eastern
49
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
60
2010 2010 (region)
50
40
30
20
10
0
SK CZ SI PL LT HU EE NMS CY LV BG EU RO MT
PL1 PL2 PL3 PL4 PL5 PL6 HU1 HU2 HU3 12 BG3 BG4 27 RO1 RO2 RO3 RO4
purposes (for small countries there is a sin- the Brussels region, mainly due to a high
gle region covering the whole country). Fig- rate of immigration and a poor urban con-
Early School ure 3.10 shows the regional situation in the text, are twice as likely to become ESL than
new member states (NMS), and Figures 3.9 are the inhabitants of Flanders.
Leavers: a context- and 3.8 in the old member ones. The NMS A reverse pattern is recorded in the
show on average lower rates compared to old United Kingdom where the lowest rate of
related issue member states, except for Malta (more than ESL is in the City of London, and the most
35%) and Romania (21%). Despite a national likely to drop out of education live in Wales
average close to the EU27 average, Bulgaria (19.7%) or in Yorkshire or the West Mid-
Early School Leavers (young people aged displays significant regional differences, lands (18.1%). The specificity of the socio-
between 18 and 24 with at most lower similarly to Hungary. Even Poland, with economic situation as well as the charac-
secondary education and not in education one of the lowest ESL rates, shows higher teristics of the population considered are
or training in the last four weeks before percentages in its northern areas, where per important factors to be taken into account
responding to the Labour Force Survey) capita GDP is lower compared to the other (e.g. the presence of declining industries
have recently attracted increasing atten- regions of the country. like the mining sector).
tion. Since the adoption of the Lisbon Strat- The old member states show higher From a time perspective (data from
egy and the Open Method of Coordination rates of ESL and Spain, Portugal and Italy Eurostat not shown) ESL rates have evolved
on Education and Training (Council of are among the worst performers in this before and since the crisis. Since 2007
the European Union 2009, see ETUC and respect. Within the 15 old member states, there have been small decreases in most
ETUI 2011), ESL have been identified as differences in ESL are even stronger, mean- European countries, in line with a generally
a priority because of their social and eco- ing that older member states seem more decreasing trend within Europe.
nomic cost (European Commission 2011a). heterogeneous in terms of educational The most significant reductions were
Moreover, ESL rates are now a headline tar- attainment of the population as well as in recorded in Spain and in Portugal and apply
get of the Europe 2020 strategy (European terms of employment opportunities and to virtually the whole of these countries.
Commission 2010d), and member states socio-economic structures. This is the case In Portugal a 7% reduction of the national
rates will in future be monitored by means of Italy where in the southern part and the average was recorded between 2008 and
of the National Strategy Reports. However, two main islands of Sardinia and Sicily 2010; while in the same period in Spain this
the headline target of reducing ESL to less rates are at least 10% higher than the low- record has decreased by between 3 and 4%.
than 10% for the whole 27 member states est rate in the country (in the north-eastern Reductions (figure not shown) in
is an output average target that conceals area). The same analysis can be carried out early school-leavers in these countries seem
great divergences among member states for Portugal and Spain, where young people to have speeded up slightly after the impact
and within countries themselves. living in areas with strongly tourism-based of the crisis (2008-2010). This might be
The regions shown in Figures 3.8 economies (such as the islands) are much explained by the fact that young people opt
to 3.13 are not defined by administrative more likely to leave school earlier. Despite to stay longer in education rather than to
internal boundaries, but are territorial units being a small country, Belgium shows enter the labour market under very uncer-
delimited by Eurostat (NUTS 1) for statistical marked differences and young people in tain conditions.
50
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
Figure 3.11 Young people not in employment, education or training by NUTS 1 region (NEET rates), old member states (1)
35
2010 2010 (region)
30
25
20
15
10
0
GR
EU 27
UK
ES
IE
IT
FR
ITC
ITD
ITE
ITF
ITG
GR1
GR2
GR3
GR4
UKI
UKC
UKD
UKE
UKF
UKJ
UKG
UKH
UKK
UKL
FR1
FR2
FR3
FR4
FR5
FR6
FR7
FR8
UKM
UKN
ES1
ES2
ES3
ES4
ES5
ES6
ES7
Source: Eurostat (2011d).
Figure 3.12 Young people not in employment, education or training by NUTS 1 region (NEET rates), old member states (2)
30
25
20
15
10
0
NL LU DK AT SE DE FI BE AVG PT EU
NL1 NL3 AT1 AT3 SE1 SE3 DE1 DE3 DE7 DE9 DEB DEE DEG FI1 BE1 BE3 old PT1 27
NL2 NL4 AT2 SE2 DE2 DE4 DE8 DEA DED DEF BE2 MS
51
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
Figure 3.13 Young people not in employment, education or training by NUTS 1 region (NEET rates), new member states
40
2010 2010 (region)
35
30
25
20
15
10
0
SI MT CZ PL EU HU CY LT SK EE RO LV BG
PL1 PL2 PL3 PL4 PL5 PL6 27 HU1 HU2 HU3 RO1 RO2 RO3 RO4 BG3 BG4
as much as in other countries (respectively but in several other countries too includ-
2.7% and 2.3%), the reality of the youth ing France, Germany, Ireland, the Nether-
The vicious situation concealed by an aggregate figure lands and Spain it exceeds 10%.
is more complex, with marked disparities Even if for young people aged between
circle of NEETs, among regions. 25 and 29 the share of NEETs is definitely
The situation within New Member smaller than for people aged between 15 and
poverty and social States is rather similar to that in the old 24, there are still countries where this share
ones. Huge differences among regions are represents more than 20% of young people
exclusion found in Bulgaria (from 22.1% up to 33.3% (i.e. young people who are unemployed,
BG3 in the graph); but also in Hungary inactive, whether willing or unwilling to
(ranging between 12.1% and 19.8%). All work (European Commission 2009a)).
Huge disparities in NEETs rates are found the NMS have seen a significant increase Despite the obvious heterogeneity
also within Italy (North-East 16.6%; Sic- in their NEETs rates since 2008 (data not among the NEETs population, available
ily and Sardinia 33.9%); Spain (North-East shown), and this is as much as 10% in the evidence provided by literature suggests
14.6%; the Canary Islands 28.2%); Belgium North-Western Region of Romania (RO1). some common characteristics: low levels
(Brussels 21%; Flanders 9.9%); Germany Major increases are recorded also in the of aspiration, no educational qualifications,
(Bavaria 8%; Mecklenburg-Vorpommern Baltic countries, whose rates have reached truancy and/or expulsion from school,
14.8%); but also France (13.9% in the Paris almost 18% and, in the case of Latvia, more low-skill occupation of parents, living in
region; 21.6% in the Northern region), and than 20%. This is also confirmed by the a household where neither parent works
Greece (16.4% in Attica; 25.5% in Kentriki skyrocketing unemployment rates among full-time, having a child at an early age,
Ellada in central Greece). Disparities within youth and changes in unemployment rates living outside family home, having health
Austria are also recorded, even though the for the population as a whole (see Chapters problem or disability, as well as having par-
highest rate in this country is below 10%, 7 and 2). ents living in rented accommodation (Rob-
compared to a EU27 average of 16.5% in 2010 While a brief spell of NEETs status is son 2008). This indicates that preventive
As expected, the NEETs rates (which quite normal during the period of transi- measures are required to ensure that young
include people who are not employed, i.e. tion from education to the labour market, people do not drop out of education once
covering both inactive and unemployed) it is important to investigate developments and for all (Maguire and Rennison 2005).
rose significantly from 2008 to 2010 (from over time, i.e. for how long and how many In times of rising unemployment and bleak
Eurostat LSF, data not shown), espe- times young persons experience this sta- job prospects, the problem of NEETs needs
cially in those countries which were most tus. What is worrying are the results of to be urgently addressed. Strong coordina-
affected by the crisis and where youth a study (Quintini et al. 2007) showing that tion among educational, social and labour
unemployment rose significantly (Ireland, there exists, in several European countries, market policies seems imperative, as par-
Spain, Italy, Greece). The breakdown by a hard-core group of youth who retain tial solutions tackling only one aspect of the
region reveals also that in countries like NEETs status over a 5-year period: this disadvantage will not efficiently prevent
France and the UK where the overall rate group is particularly large in Italy (about youth from slipping into a vicious cycle of
of NEETs did not rise from 2008 to 2010 30%), as well as in Greece (around 20%), poverty or poor social integration.
52
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
60
between 25 and 34 years between 55 and 74 years
50
40
30
20
10
0
RO IT AT CZ MT SK PT HU DE BG GR SI EU LV PL EE FI ES NL UK SE FR DK BE LU LT CY IE
27
graduates among the younger generation Firstly, increased rates of young people
as well as only a moderate increase in per- accessing higher education do not auto-
Massification centage compared to the older generation. matically mean increased access for more
On the right side of the spectrum disadvantaged youth. Secondly, the mas-
without are most of the old member states, which, sification of education does not entail a
despite not having higher rates for the more equal distribution of opportuni-
democratisation? older generation, proved able to expand ties for young students when it comes to
participation in tertiary education quite opportunities to enter the labour market.
significantly. Several self-reinforcing factors may
Current trends in employment and unem- Among the old member states, reduce the positive impact of even a well
ployment, as well as those of early school- France, Denmark, Ireland and Belgium performing education system: poor social
leavers and NEETs appear in contrast present both significant differences environment (e.g. family, community, per-
with an increasing level of educational between the two generations and have sonal difficulties) leading to poor educa-
attainment among the youngest gen- some of the highest shares of graduates tional outcomes, low employment oppor-
erations. Indeed, the trend of education among the youth population. Other old tunities, and consequently low incomes,
expansion during the post-war period is member states, such as Italy and Austria, poor chances of further lifelong learning
often described as a massification of edu- have a lower rate of tertiary graduates, and, again, low social opportunities.
cation (Altbach and Peterson 1999). despite the fact that Italy displays a differ- A life-course approach to education
Figure 3.14 shows higher educa- ence of around 12% between generations. and training has been supported by the
tional attainment for two age groups. Among New Member States, two EU in the last 20 years in order to tackle
In 2010 young people aged between 25 groups can be identified: some NMS with this vicious cycle, and is well integrated in
and 34 are more likely to have a higher relatively high rates for the older gen- a long-term perspective for the develop-
education degree compared to the previ- eration (Estonia, Latvia and Lithuania) ment of European cohesion (for example
ous generation (aged between 55 and 74 have increased their rates to above 45% the target for adult participation in fur-
years old). (for Lithuania) and already reached the ther learning of 12.5% in the Lisbon Strat-
On the left side of the spectrum are Europe2020 target (40% of people aged egy or the increasing attention to early
southern European (Italy, Portugal), but 30-34 with a tertiary degree). Other NMS childhood education European Council
also eastern European countries (Roma- show low rates for the older generation 2009). More recently Europe2020 has set
nia, the Czech Republic and Hungary), (between 10 and 20%) and significantly two headline targets concerning educa-
as well as Malta, Germany and Austria higher rates for the younger generation, tion aimed at increasing the overall level
with the lowest rates (less than 30% for especially Poland and Slovenia. of education of the population (decreasing
youths). However this strong increase in edu- early school-leavers rate to less than 10%
Both Germany and Austria have cational attainment the so-called mas- and increasing the tertiary educational
strongly institutionalised vocational sification of higher education should attainments of people aged between 30
educational and training systems, which not be confused with an increased democ- and 34 to at least 40%), (ETUC and ETUI
might explain the low rate of tertiary ratisation of educational attainment. 2011).
53
Education and inequality in Europe: a youth perspective 3.
Social and educational inequalities
Figure 3.15 Score point difference in reading performance with one unit increase in the PISA index of ESCS
60
OECD avg
50
40
30
20
10
0
EE ES PT FI IT GR DK NL PL SI IE LU SK SE DE UK CZ BE HU AT FR
playground and reducing the influence For Germany, Reamer and Pollak (2009)
of personal background thanks to the argue that vertical and horizontal ine-
A self-fuelling structure of the education systems, and qualities persist in spite of increased
thus of the policies adopted. Their posi- participation in education, since social
system of tive impact, however, says nothing about background still has a strong impact in
their capacity to provide quality educa- gaining access to tertiary education.
inequalities tion or to increase the overall perform- Another example is provided by
ance of the students. Greece, Denmark, Heath et al. (2008) who compared the
the Netherlands, Poland, Slovenia, Ire- educational attainment of the second
An indubitable aspect of the importance land, Luxembourg and the Slovak Repub- generation of immigrants in France, the
of higher and better education is that it lic are regarded as neutral since the score UK, Belgium, Sweden, Austria, Den-
has been shown to enhance, in general, difference is not statistically significantly mark, Norway, Switzerland and the
opportunities for better social and labour different from the OECD average slope Netherlands. They found that young
market performance. Educational attain- (OECD 2011b: 88). Countries with rates students with an immigrant background
ment is highly dependent on previous above the average include Germany and tend to perform worse than native fel-
social and economic situation. However, Austria, but also the United Kingdom, low pupils and the explanatory vari-
despite an increased proportion of popu- Belgium and the Czech Republic. The ables include the socio-economic and
lation with higher educational levels (see impact of socio-economic background minority backgrounds, language skills,
Figure 3.14), studies have demonstrated is thus not efficiently mitigated by these lack of aspirations and family encour-
that education does not always serve as a countries educational systems. agement, as well as discrimination and
tool for breaking the poverty cycle. Studies have confirmed these reduced access to citizenship. Oppesi-
The latest available data which trends as they have found that in West- dano and Turati (2011) also found that,
deal with unequal educational perform- ern Europe inequalities in educational for France, Germany, Italy, Greece Nor-
ance are provided by the OECD annual attainment are still marked in spite of the way, Portugal, Spain, Sweden and the
publications Education at a Glance 2011 significant expansion of post-compulsory UK, lower education results are associ-
(OECD 2011b) and Pisa 2009 (OECD education. Machin (2004) found that in ated with both school effect and social
2010a). Figure 3.15 shows how reading the UK an increase in social immobil- background. The same phenomenon was
performance changes with an additional ity has occurred at the same time as identified more than ten years ago for
unit of the Socio-economic and cultural the rapid expansion of post-compulsory Belgium (Vanderberghe 2000).
index (OECD 2010a), which takes into education, meaning that mostly children
account not only the parents socio- from richer families have benefited from
economic position, but also the cultural this expansion. This change in the edu-
resources available at home. The OECD cation system has increased rather than
average score is 38. Countries ranging alleviated inequality across generations,
between Estonia and Italy are considered reinforcing and exacerbating already
to have a positive effect in levelling the existing intergenerational inequalities.
54
Education and inequality in Europe: a youth perspective 3.
Conclusions
55
Collective bargaining and diversity
in wage developments
Introduction
Topics
56
Collective bargaining and diversity in wage developments 4.
Industrial relations regimes in the EU
Statutory minimum wage no yes (DE partly) yes (except IT) yes yes
limited; strong state active; state strong but its state dominant;
Role of state in collective bargaining limited
legalism clientelistic relations interventions rare strong legalism
*without Cyprus and Malta; ** in Austria and Italy: functional equivalent to extension; a Multi-employer bargaining; b Single-employer bargaining
Sources: Marginson and Traxler 2005, Visser 2011, and ETUI 2011.
57
Collective bargaining and diversity in wage developments 4.
Industrial relations regimes in the EU
58
Collective bargaining and diversity in wage developments 4.
Industrial relations regimes in the EU
2000 2008
100
90
80
70
60
50
40
30
20
10
0
AT BE SI SE FR FI ES NL DK IT RO GR PT DE LU CY IE CZ SK MT PL HU UK BG EE LV LT
59
Collective bargaining and diversity in wage developments 4.
Industrial relations regimes in the EU
2000 2008
90
80
70
60
50
40
30
20
10
0
SE DK FI CY BE MT SI LU IT RO IE AT UK GR PT CZ BG DE NL SK HU LV PL ES LT FR EE
60
Collective bargaining and diversity in wage developments 4.
Wage growth and macroeconomic developments
Figure 4.4 Nominal compensation, labour productivity and HCPI, Central-western Europe (2001-04, 2005-08, 2009-11)
-1
-3
AT BE DE LU NL SI
Note: annual %-change, averaged over periods 2001-04, 2005-08, 2009-11.
Data source: AMECO (2011).
61
Collective bargaining and diversity in wage developments 4.
Wage growth and macroeconomic developments
Figure 4.5 Nominal compensation, labour productivity and HCPI, Central-eastern Europe (2001-04, 2005-08, 2009-11)
30
25
20
nominal compensation 2001-2004
15 2005-2008
2009-2011
10
productivity
5 HCPI
-5
BG CZ EE LV LT HU PL RO SK
Note: annual %-change, averaged over periods 2001-04, 2005-08, 2009-11.
Data source: AMECO (2011).
and Latvia nominal wages grew by 25 per 8 per cent, on the average), and clearly
cent on average between 2005 and 2008, exceeded the average rate of inflation of
Central-Eastern while inflation was around 7 and 10 per about 3 per cent.
cent respectively. Similarly, in Estonia
Europe: volatile and Lithuania nominal wages increased
by 15 per cent while prices, on the aver-
wages and falling age, grew by 5 and 7 per cent, respec-
tively, in the same period. Thus, highly
purchasing power dynamic wage growth in these decentral-
ised and weakly coordinated bargaining
during crisis systems contributed to the build-up of
bubbles in housing and financial mar-
kets. During the years of economic cri-
Figure 4.5 shows striking variation in the sis, however, marked downward adjust-
development of nominal wages, prices ment of nominal wages was observed; in
and productivity in the Central-East Latvia nominal wages shrunk by 5 per
European EU member states. Through- cent, on the average, between 2009 and
out most of the 2000s, nominal wages, on 2011, while inflation was around 2 per
the average, grew moderately and in line cent. In Romania wages stagnated during
with the averaged annual inflation rate the recession while inflation was above
in Poland, and to a lesser extent in the 5 per cent. In all these countries this sig-
Czech Republic and Slovakia. In Poland nified severe losses in the real purchasing
nominal compensation grew most mod- power of workers. In Hungary nominal
erately, that is, by below 5 per cent, on the wage growth was more dynamic in the
average, over the entire period, while the first half of the 2000s, and more mod-
inflation rate remained between 3 and 4 erate in the years before the recession.
per cent, on average. However, the coun- Recently, the continuation of nominal
try was not directly hit by the global cri- wage restraint with inflation at around 5
sis, with GDP growth remaining positive per cent resulted in considerable losses in
in the years 2009 to 2011 (see Chapter 1). purchasing power. In Bulgaria, a rather
This development contrasts with the sit- different picture emerges, in that growth
uation in Romania, Latvia, Estonia and of nominal wages was in line with price
Lithuania, where nominal compensation developments, on the average, from 2001
largely outgrew price increases in the to 2008; the recession has indeed not
first half of the 2000s and in the boom yet impacted upon wages that contin-
years before the crisis hit. In Romania ued to grow dynamically (i.e. by above
62
Collective bargaining and diversity in wage developments 4.
Wage growth and macroeconomic developments
Figure 4.6 Nominal compensation, labour productivity and HCPI, Northern Europe (2001-04, 2005-08, 2009-11)
3,5
2,5
nominal compensation 2001-2004
2
2005-2008
1,5 2009-2011
1 productivity
0,5 HCPI
-0,5
-1
DK FI SE
Note: annual %-change, averaged over periods 2001-04, 2005-08, 2009-11.
Data source: AMECO (2011).
63
Collective bargaining and diversity in wage developments 4.
Wage growth and macroeconomic developments
Figure 4.7 Nominal compensation, labour productivity and HCPI, Liberal-Western (Anglo-Saxon) Europe (2001-04, 2005-08, 2009-11)
1 productivity
HCPI
0
-1
-2
IE CY MT UK
Note: annual %-change, averaged over periods 2001-04, 2005-08, 2009-11.
Data source: AMECO (2011).
64
Collective bargaining and diversity in wage developments 4.
Wage growth and macroeconomic developments
Figure 4.8 Nominal compensation, labour productivity and HCPI, Southern Europe (2001-04, 2005-08, 2009-11)
-1
-2
GR ES FR IT PT
Note: annual %-change, averaged over periods 2001-04, 2005-08, 2009-11.
Data source: AMECO (2011).
downs in Greece
Greece stands out among the Southern
EU countries in having experienced very
dynamic nominal wage growth in the first
half of the 2000s, (i.e. above 6 per cent
per year on the average; Figure 4.8), while
prices increased by around 3.5 per cent.
Wage growth moderated during the years
before the economic crisis hit and in
response to the steep economic downturn
in the debt-ridden country nominal com-
pensation shrunk (by 0.7 per cent on the
average) between 2009 and 2011. Inflation
remained at comparatively high levels (i.e.
3 per cent), resulting in a pronounced drop
in workers real purchasing power. In Spain,
with the exception of the pre-crisis years,
nominal wages developed in line with infla-
tion. During the years of recession, how-
ever, nominal wage growth fell behind
labour productivity growth, which actually
increased due to soaring unemployment.
65
Collective bargaining and diversity in wage developments 4.
Wage growth and macroeconomic developments
7
6
5
4
3
2 Transition model
1 Centre-western model
Nordic model
0
Anglo-Saxon model
-1
Mediterranean model
-2
-3
-4
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
66
Collective bargaining and diversity in wage developments 4.
Collective bargaining and income distribution
Figure 4.10 Inequality of income distribution (80/20 income quintile share ratio), 2000 and 2008
2000 2008
8
0
CZ SI SK SE DK HU AT FI NL BE CY LU MT FR IE DE EE IT PL ES UK GR LT PT BG RO LV
Notes: The income quintile share ratio or the S80/S20 ratio is calculated as the ratio of total income received by the 20% of the population with the highest income (top quintile) to
that received by the 20% of the population with the lowest income (bottom quintile). For CZ, DK, and SE figures refer to 2001; no data is available for CY and SK for 2000 and 2001.
Source: Eurostat (2011g).
Income inequality
on the rise
Figure 4.10 presents the extent of inequal-
ity in income distribution in the EU in
2000 and 2008, measured by the income
quintile share ratio (based on nominal
income). The higher the ratio, the larger
is the gap between the most (top 20%
quintile) and least well-off (bottom 20%
quintile). Income inequality was highest
in Estonia, Portugal, Greece, Latvia and
Spain in 2000 and grew considerably in
Bulgaria, Romania, Latvia and Germany
between 2000 and 2008. In Estonia and,
to a lesser extent, Malta, Ireland, Portugal
and Belgium, income inequality some-
what declined as from 2000 while remain-
ing stable in the other EU countries. As a
general observation, the income distribu-
tion tends to be more equal in the Nordic
countries and the corporatist countries of
Central-Western Europe, while it is most
unequal in the Baltic states, Romania,
Bulgaria, the UK, and some of the South-
ern European countries.
67
Collective bargaining and diversity in wage developments 4.
Collective bargaining and income distribution
100 AT BE
SI SE FR ES
FI
90 NL IT
DK
80 RO
70 DE GR PT
LU
CB coverage
60 CY
50 IR
CZ SK PL
MT HU
40 UK BG
30
EE LT LV
20
10
0
3,25 3,50 3,75 4,00 4,25 4,50 4,75 5,00 5,25 5,50 5,75 6,00 6,25 6,50 6,75 7,00 7,25
80/20 income ratio
Note: Average 80/20 income ratios 2005-2010 and bargaining coverage rates for 2008.
Sources: Eurostat (2011g); European Commission (2011h).
68
Collective bargaining and diversity in wage developments 4.
Collective bargaining and income distribution
Figure 4.12 Change (percentage points) in the adjusted wage share (2000-2008, 2008-2011)
69
Collective bargaining and diversity in wage developments 4.
Collective bargaining and income distribution
60
58 Centre-western model
56 Nordic model
54
Mediterranean model
52
Anglo-Saxon model
50
Transition model
48
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Note: The adjusted wage share is measured as compensation per employee as percentage of GDP at current factor.
Source: AMECO (2011).
70
Collective bargaining and diversity in wage developments 4.
Conclusions
71
Social security and inequality
Introduction
Welfare states, and more particularly tax-benefit systems, are regarded as one of
the main instruments in mitigating and correcting inequality. And yet the original
purpose of social protection systems was in fact not to redress inequality but rather
to reproduce the prevailing social hierarchy (Esping-Andersen and Myles 2009).
The question of these systems ability actually to reduce inequality thus remains
open and it comes as no surprise that the currently found varieties of welfare system
display varying degrees of ability in this respect: some countries have neither
created the appropriate institutions nor set aside the requisite financial resources;
others have set up welfare systems that are designed mainly to operate as piggy-
banks (e.g. Continental Europe); some, finally, have set up welfare systems intended
to play a Robin Hood role (e.g. Denmark), deliberately aimed, in other words, at
narrowing the gap between rich and poor (Barr 2001).
The varying ability of welfare systems to reduce inequality and the efficiency
with which they succeed in doing this notwithstanding, there remains an
entrenched belief that social protection and tax systems should, to some extent,
contribute to mitigating and containing the various forms of inequality created by
the market. This is all the more important in a context characterised, as at present,
by rising inequality and persistent recession.
This chapter will first of all look at how social protection spending is evolving,
after which it will investigate developments in income inequality and how they
relate to the variety of social protection systems found in the European Union.
Topics
72
Social security and inequality 5.
Social protection spending
Figure 5.1 Social protection spending as a percentage of GDP (2000, 2007, 2009)
40
2000 2007
2008 2009
35
30
25
20
15
10
0
LV RO BG SK EE PL MT CZ CY LT LU HU SI ES PT IE GR UK EU IT SF BE AT DE NL SE FR DK
27
Baltic states and also the UK and Ire- The continental European Union and
land), however, the increase in spending the Nordic countries all spend around
Social protection was above 5 percentage points as GDP 30% of their GDP on social protection,
contracted dramatically and spending demonstrating thereby the importance
systems as rose (or in some cases decreased). In attributed by these countries to ensuring
Hungary alone did spending as a per- security for their population, especially
automatic centage of GDP rise by less than one per- in the case of social risks. The differences
centage point (such a small increase may in spending may be expected to widen
stabilisers be attributable either to higher spend- in the coming years as austerity meas-
ing, or to a drop in GDP, or to a combi- ures will put pressure on social protec-
nation of the two). When examined in tion spending in the southern European
In 2009 (latest available data) average absolute terms (i.e. in euros), spending countries.
spending on social protection in the EU on social protection rose in most EU
as a percentage of GDP stood at a high members states between 2007 and 2009,
of 29.5 %, up from 25.7 % in 2007. Over the exceptions being Hungary, Poland,
the 2000 to 2007 period, social protec- Sweden and the UK where spending in
tion spending had, in a majority of cases, euros decreased between 2007/2008 and
decreased or remained stable, as eco- 2009. This decrease may be due either
nomic growth had been boosting labour to a pick-up in the labour market (see
markets and member states were reform- Chapter 2) or to reforms aimed at cutting
ing their social protection systems to spending, the latter being clearly the case
become leaner (exceptions being Roma- in both Hungary and the UK.
nia, Malta, Cyprus, Hungary, Portugal, Social protection spending contin-
Greece, Italy and The Netherlands). As ues to vary greatly across the EU mem-
from the onset of the financial crisis in ber states. About 10 EU member states,
2008, however, social protection spend- mostly central and eastern European
ing rose as a percentage of GDP because countries, spend around or less than
the systems had begun to play their role 20% of their GDP on social protection
of automatic stabilisers and to provide (the three Baltic states, Romania, Bul-
income security to workers who lost their garia, Poland, Slovakia, Czech Republic,
jobs or saw their working time and Cyprus, Malta); 9 member states, south-
hence their wages reduced. Accord- ern European and English-speaking
ingly, between 2007 and 2009, social countries, spend between 20 and 30
security spending as a percentage of GDP % of GDP on social protection (Spain,
in the EU jumped by 3.8 % points. In the Portugal, Greece, Italy, Luxembourg,
countries hardest hit by the crisis (the Hungary, Slovenia, the UK and Ireland).
73
Social security and inequality 5.
Efficiency of the welfare state
Figure 5.2 Efficiency of tax benefit systems in reducing poverty, women 18 to 64 years, 2005 and 2010
80%
2005 women 2010 women
70%
60%
50%
40%
30%
20%
10%
0%
LV ES CY GR LT IT BG DE MT EE RO PT EU UK PL DK SE BE LU FI NL FR SK IE AT SI CZ HU
27
Note: Efficiency of social protection = (poverty before transfers - poverty after transfers) / poverty before transfers.
Source: Eurostat (2011k).
Figure 5.3 Efficiency of tax benefit systems in reducing poverty, men 18 to 64 years, 2005 and 2010
80%
2005 men 2010 men
70%
60%
50%
40%
30%
20%
10%
0%
DE LT PL CY GR IT SE SK LU MT FI PT CZ DK BG RO BE ES FR EU IE NL SI HU UK LV EE AT
27
Note: Efficiency of social protection = (poverty before transfers - poverty after transfers) / poverty before transfers.
Source: Eurostat (2011k).
74
Social security and inequality 5.
Efficiency of the welfare state
75
Social security and inequality 5.
Efficiency of the welfare state
Figure 5.4 Correlation between income inequality for women and cash benefits
8
LV R2=0,08
7 RO
ES PT
BG LT GR
6
UK IT
Quintile
EE PL EU27
5 DE FR
IE CY
MT LU NL BE
4 SE FI AT
HU DK
SK CZ SI
3
2
10 11 12 13 14 15 16 17 18 19 20 21 22
76
Social security and inequality 5.
Efficiency of the welfare state
Figure 5.5 Correlation between Income inequality for women and in-kind benefits
8
LV R=0,16
RO
7
LT PT ES
BG GR
6 IT UK
PL EE EU27
5 CY LU DE FR
MT BE IE NL DK
Quintile
SE
4 HU AT
SI FI
SK CZ
3
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
77
Social security and inequality 5.
Development of income inequality
40
1995 2005 2010
35
30
25
20
15
10
0
SI HU SE CZ SF NL SK AT BE DK LU MT CY DE FR EU PL IT EE GR UK BG IE RO PT ES LV LT
15
the general trend of the Gini coefficient to see their Gini coefficient rise. In both
from 1995 to 2000 was a decrease across Sweden and Denmark income inequal-
Europe becoming the then EU12. In 1995 Denmark had the ity continued to widen, as was the case
lowest Gini coefficient at 20 and Portu- also in France and Germany (in the lat-
more unequal gal, with 37, the highest. In general, the ter the coefficient rose from 26.1 to 29.3).
Nordic countries could boast the most Finally, some of the most unequal coun-
equal societies, followed by continental tries for example, Spain and Ireland
Income inequalities can be measured in Europe, then the English-speaking coun- became even more unequal. As a result of
a host of ways, each entailing advantages tries, with, finally, the southern Euro- these highly diverse trends over the most
and disadvantages (compare Chapter 4). pean countries displaying the most une- recent period, the ranking of countries
The Gini coefficient displayed in Figure qual distribution of disposable income. with regard to their Gini coefficient has
5.6 measures the extent to which equiv- The period from 1995 to 2000 was char- altered as compared to the past decade.
alised disposable household income is acterised by a general decrease in, or sta- Some of the traditionally equal countries,
distributed across the population. The bilisation of, the Gini coefficients in all Denmark and Germany, have moved
Gini coefficient equals zero if the income countries. The ranking did not change down the ranking towards the English-
is perfectly distributed across the popu- dramatically. However, the trend in the speaking countries, while the central and
lation and 100 if all the income belongs period from 2000 to 2005 took a quite eastern European countries, in particu-
to one person; in other words, the higher different course as the Gini coefficient lar, have moved up the ranking. However,
the Gini coefficient, the greater the ine- increased in nearly all countries. Espe- inequality has, on average, increased, the
quality. This measure takes into consid- cially some of the more equal countries increase being a combination of labour-
eration the entire income distribution. saw a rapid rise in the Gini coefficient; market-based inequality and the out-
Several recently published publica- Denmark rose from a low of 20 in 1995 come of reforms that have taken place in
tions (OECD 2008 and 2011b; European to 24.9 in 2005, Finland from 24 to 26, the welfare state (OECD 2011b).
Commission 2012) emphasise that mar- and Germany from 25 to 26.1. The rank-
ket as well as income inequality has risen ing of countries meanwhile remained
over the past decade. The reasons for this more or less the same, with Slovenia,
increase, in most EU member states, are Bulgaria and the Nordic countries show-
manifold, but the most important ones ing the lowest degrees of inequality and
seem to relate to globalisation, techno- the southern European and newly joined
logical change, demographic change, and Baltic countries the highest.
changes in institutions and regulations The period from 2005 to 2010
in other words, changes in social protec- presents a less clear picture, with some
tion and taxation systems. countries showing a decreased degree of
Figure 5.6 displays the Gini coeffi- inequality (Finland, The Netherlands,
cient for 1995, 2005 and 2010. The figures Belgium, Italy, Poland, Greece, UK, Esto-
confirm the above-mentioned studies, as nia and Portugal) while others continued
78
Social security and inequality 5.
Conclusions
social spending is
the answer to crisis
Social protection spending has risen as
a percentage of GDP in all EU member
states; in the countries hardest hit by the
crisis this increase has exceeded 5 per-
centage points. However, this increase
in spending expressed as a percentage of
GDP did not translate into an increase in
spending in absolute terms. Poland, Swe-
den, Hungary and the UK actually spent
less money on social protection; in the
latter two countries in particular, this is
a clear effect of austerity measures imple-
mented at the onset of the financial cri-
sis. The figures on spending for 2010 and
after could, as they become available,
confirm this trend for most EU member
states as the austerity measures start to
take effect.
The pressure on social protection
spending gives cause for concern on two
main counts. Firstly, inequality has, gen-
erally speaking, risen right across the
European Union; secondly, the welfare
state has, over the past decade, become
less efficient in terms of off-setting, or
providing the framework for lowering,
market-based inequality. This trend
seems to be more marked for women
than for men.
Hence, at a time when equality in
its many forms is on the rise, there is
tremendous pressure to decrease gov-
ernment spending on social protec-
tion. If social protection systems are to
adapt and regain their former degree
of efficiency in limiting inequality and
decreasing poverty, spending cuts can-
not be the answer; it is vital rather, on the
contrary, that social protection be beefed
up and able to provide the security for
social risks as well as essential goods and
services for the wellbeing of the Euro-
pean Unions population. Furthermore,
achievement of the Europe 2020 target
of reducing poverty (see also ETUC and
ETUI 2011) seems very distant and dif-
ficult to attain on the basis of current
79
Climate change and inequality
Introduction
Topics
80
Climate change and inequality 6.
Global inequality in greenhouse gas emissions and its
consequences
Figure 6.1 Greenhouse gas emissions by Annex 1 (developed) and non-Annex (developing) countries
70
65
60
55
50 annex I
45
non-annex I
40
35
30
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Figure 6.2 CO2 emissions from fossil fuels and cement in MtC/yr (TgC/yr), 1980-2008
2000000
1800000 China
1600000
1400000 USA2
1200000
1000000 EU 27 total
800000
600000 India
400000
200000
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
7% per cent of CO2 emissions. In per capita emergence of China (classified as a devel-
terms, this indicates a factor of inequality oping country and thus not subject to ghg
The big picture of of more than 15, when actual emissions are reductions under the Kyoto Protocol). In
taken into account. As the Intergovernmen- terms of use of the categories developed
inequality tal Panel on Climate Change (IPCC) has and developing countries, this shift would
pointed out, while Africa accounts for less seem to indicate a decrease in pollution ine-
than 4 per cent of greenhouse gas emissions quality insofar as the share of developing
Developed economies (Kyoto annex I. coun- in the world, this continent may well, as countries is growing. In fact, the opposite
tries), with 15% of the global population, use early as 2020, have between 70 million and is true. Assuming the industrialised urban
about half of the global resources and still 400 million people exposed to water short- population in China to be around 600 mil-
cause the major effect in terms of environ- age caused by climate change. This shows lion, 23% of the world population is now
mental degradation (45% of ghg emissions the other dimension of inequality, in terms causing two thirds of global ghg emissions.
in 2004), as Figure 6.1 shows. of exposure to the impact of climate change. At the same time, the emergence of
Meanwhile, the poorest 37% per cent Figure 6.2 shows the shifting bal- China also demonstrates the absolute limits
of the worlds population accounted for only ance in global ghg emissions due to the of this resource-intensive development model.
81
Climate change and inequality 6.
European performance in reducing greenhouse gas emissions
105
100
index (1990=100) -
EU15 - Tg (million
95
tonnes)
90
85 index (1990=100) -
EU27 - Tg (million
tonnes)
80
75
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
however, that the slight economic recov- 2000-2007 saw no more than a marginal
ery in 2010 resulted in an immediate 2% additional decrease in emissions (0.4% in
Green recession increase in ghg emissions, reducing the EU27 and 1.4% in EU15). What is more,
overall cut to 10.7% for the EU15 when the single crisis year of 2009 contributed
black recovery: compared to 1990. more to a larger decrease of ghg emis-
Even if the 2020 targets are at sions for the EU15 than the preceding
more ghg reduction least for the EU27 within reach, this 18 years all together! This amounts to
does not indicate any effective decou- clear proof that the achievements so far
caused by crisis pling of ghg emissions from economic are less a result of conscious climate
growth. policy measures and much more the out-
than resulting from What the huge difference between come ad hoc events and crises.
the performance of the EU15 and the Even if Europe has been perform-
climate policy EU27 shows is that the greater reductions ing better than the rest of the world, it
were made in the new member states due cannot be stated that it is well on track
primarily to the collapse of their previous towards fulfilment of the ambitious 2050
While global greenhouse gas (ghg) emis- industrial base in the 1990s. The same targets agreed at the G8 Summit in 2009
sions in 2008 were 41% above the 1990 effect applies to post-unification Ger- (Euractive 2009). The achievement of the
levels and the emissions of developed many with the dismantling of the pollut- 80% emissions cut target for industrial-
countries (subject to the Kyoto Proto- ing east-German industries (also serving ised economies by 2050 would presup-
col) showed no decrease (Schepelmann to improve the EU15 performance). Out pose a cut in emissions to two tonnes of
2009), the EU (as part of the latter group) of the EU27s total 11.3% reduction in CO2 equivalent per capita per year. As
did achieve a significant cut in its emis- emissions between 1990 and 2008, 7.3% the current EU27 average is 10 tonnes per
sions during this period (while the emis- had already been achieved in 1994 (at the capita, achievement of this target calls
sions of other developed economies, lowest point of the transformation crisis for a genuine paradigm shift in our pro-
such as the US or Japan, continued to in CEE), constituting clear evidence that duction and consumption model.
increase). the bulk of the emission cuts was the The case of the CEE transformation
For the EU27, ghg emissions in result of contraction and not of climate crisis in the early 1990s, and the 2009
2009 (last available data, EEA 2011) policy (see also ETUC and ETUI 2011: 51). crisis, provide instances of how climate
showed a substantial 17. 4% decrease A breakdown of the examined policy targets should not be reached.
compared to the 1990 base; for the period shows also that the overwhelm- This will be a lesson for the next three
EU15, however, the achievement was just ing majority of the emission cuts were decades over which the aim is to achieve
-12.7%. The crisis year of 2009 showed achieved during the first decade of the four times the ghg reductions of the
a record decrease of 6.4% for both the observation period, as in 1999 ghg emis- period 1990-2010. Europe cannot afford
EU27 and the EU15 indicating the on-off sions were already 9.1% below the refer- more recession, even if it is green. What
effect of the collapsing economic activ- ence level of 1990 in the EU27 and 5.3% it needs is a recovery that must be also be
ity. Data available for the EU15 show, below this level in the EU15. The period sustainable and green.
82
Climate change and inequality 6.
Divided Europe:
resource productivity and per capita emissions
Figure 6.4 Resource productivity and per capita greenhouse gas emissions by member state
12 EE CZ
FI NL
CY BE
GR DE
10 IE
CO2 emissions - Mg(ton)/capita, 2009
NO DK
AT UK
SI
8 PL IT
ES MT
BG SK CH
6 PT FR
HU SE
4 RO LT
LV TR
0
0 500 1000 1500 2000 2500 3000 3500
resource productivity (EUR/ton), 2007
Source : EEA (2011) for CO2/capita; Eurostat (2011p) for resource productivity.
a whole is currently profiting from the many of those units (in terms of produc-
huge emission drops in CEE new mem- tion and consumption), this adds up to
Inequality across ber states caused by the collapse of their a huge amount of emissions.
traditional industrial base in the early A rich country can thus have rela-
member states: 1990s (see also ETUC and ETUI 2011: 51 tively high resource productivity values,
ff), these countries face huge challenges but still be the highest per capita polluter,
from poor and when it comes to the need to raise their because it is not as resource-efficient as
resource productivity in the future. it is rich.
clean to rich and If, on the other hand, we look at per On the other hand, a poor country
capita CO2 emissions, we also see huge can have low resource productivity and
dirty differences, but here they are quite dif- still be a low per capita polluter because
ferently distributed among countries the total amount of used resources is
(CO2 emissions are responsible for the relatively low. The targets for 2050 are
The differences in resource productivity bulk of ghg emissions) . 2 tonnes of CO2 emissions per capita
and per capita ghg emission characteris- Luxembourg, the best performer for developed countries. The challenge
tics by individual member states indicate in terms of resource productivity i.e. for Luxembourg is to bring its per capita
an important dimension of diversity that needing the least amount of material emissions down by more than 90%, with-
can also manifest in terms of actual or input for producing a unit of GDP , has, out giving up its high income level and
potential inequality. in relation to per capita CO2 emissions, future growth.
Figure 6.4 shows the great diver- the worst result, namely, 21.7 tonnes, Challenges are even greater for the
gence, in both resource productivity (ver- while Latvia has just 3.08 tonnes per poorer countries: they should achieve
tical axis) and per capita ghg emissions capita. This shows how great are the dif- convergence with richer economies and
(horizontal axis) across European coun- ferences even within Europe, but also at the same time improve their resource
tries. Resource productivity, defined as how many different facets sustainable productivity and efficiency. Bulgaria for
the ratio between gross domestic prod- development has. example would need to cut its per capita
uct (GDP) and domestic material con- While resource productivity emissions by two thirds and at the same
sumption (DMC), indicates how much depends on both resource efficiency and time generate 5-6 times the income it
value added is produced by the input of the economic structure (in terms of the does today (there are no targets for con-
one tonne of material resource in a given share of resource-intensive industries vergence, however). This will represent
economy. The gaps are enormous as, for in economic activity), per capita emis- a twofold challenge.
example, the level of resource productiv- sions reflect emission intensity and
ity in Luxembourg (4320 EUR/tonne) is are thus also linked to the amount of
more than thirty-fold what it is in Bul- material wealth generated in a country.
garia (140 EUR/tonne), this gap being This means that for instance Luxem-
far wider than corresponding gaps in per bourg generates a unit of GDP with high
capita GDP or wages. Even if Europe as resource productivity but, since there are
83
Climate change and inequality 6.
Energy intensity by broad sector
Figure 6.5 Index of final energy intensity and energy intensity by sector, EU27 (1995-2008)
110
105
households
100
transport
95
services
90
final energy intensity
85
industry
80
75 agriculture
70
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
84
Climate change and inequality 6.
The micro-dimension of environmental inequality
fuel poverty in the EU
Figure 6.6 Share of the population who cannot afford to keep home warm if needed, 2008
total % of lowest-income households (bottom 25% of the population by income) total % (all income groups)
80
70
60
50
40
30
20
10
0
LU
FR
LV
LT
BG
TR
SE
NO
AT
FI
DK
HR
BE
NL
DE
UK
CZ
HU
EE
SK
PL
ES
PT
RO
SI
GR
CY
MT
NMS12
IE
EU 15
IT
Source: Eurostat (2011p).
Fuel poverty on
the rise in the EU
In Europe, constant increases in energy
prices lead several million households to
turn off their heating in winter in order
to reduce their energy bills (EPEE 2010).
Fuel poverty is on the rise in the
EU and has reached alarming levels in
certain member states, even if the lat-
est available data do not yet include
the worst years of the crisis (Euro-
pean Foundation for Improvement of
Living and Working Conditions 2009).
Figure 6.6 shows the share of the popula-
tion (for the total population and for the
poor households) that cannot afford to
keep their homes adequately warm when
necessary. In 2008 6.7% of the EU15
population and 14.5% of poor households
were affected; for the NMS12 the corre-
sponding shares were 17.1% and 30.3%.
The situation was worst in Lithuania
where 39% of the total population and
49.9% (!) of the poor experienced fuel
poverty.
85
Climate change and inequality 6.
The micro-dimension of environmental inequality
fuel poverty in the EU
Figure 6.7 Utility bill arrears in EU member states (2007 and 2010, as % of total population)
35
2007 2010
30
25
20
15
10
0
LU NL DK DE CZ SE AT UK BE NO PT MT EU ES FI FR SK IT EE LT IE* CY* PL NMS SI GR HU LV RO BG
15 12
86
Climate change and inequality 6.
Conclusions
worst performer, has 7 times higher per and social policy need to be based on
capita emission than the best performer, an integrated approach. There exists
Avoiding green Lithuania. Both indicators are some- a danger that the forced fiscal and finan-
what disturbing: the resource productiv- cial consolidation programmes currently
recession and ity of the national economy can reflect underway in Europe may undermine
the specifics of an economic structure all the dimensions of this policy frame-
green poverty (e.g. high share of financial services or work. One example is government pro-
other high value/low material input grammes for retrofitting buildings, with
activity). Per capita ghg emissions seem regard to which there is a major risk that
Once this protracted crisis is behind us, to be more indicative of the wealth level declared objectives will be not met due to
there will be no way back to the pre-cri- of a country than of its performance in austerity. While the housing sector rep-
sis growth model that rested on credit- resource and energy efficiency. Since resents the best potential for energy sav-
fuelled expansion, inequality, and imbal- poorer countries (above all the NMS) ing and for the reduction of greenhouse
ances. Nor can we return to the broader tend to have the lowest per capita emis- gas emissions, a proper design can also
economic model pioneered by Western sions, but also the lowest resource pro- help the growing share of families in fuel
industrial civilisation. Enduring recovery ductivity, the big question will be how poverty. Publicly financed programmes
will be possible only through a fundamen- to manage green convergence. Previous would have the highest return here, but
tal shift towards a resource- and material- experience with the catching up of south- if these are being cut, or discontinued,
efficiency-based low-carbon economy. European countries shows that the pro due to austerity policy the losses would
When talking about Europes per- cess of convergence caused emissions to be manifold.
formance in climate policy targets and increase rapidly.
the effects of climate policy and resource Beside the big picture of inequality
prices on the population, we need to bear in environmental and resource use in the
in mind the global context. The industr- world, and the uneven performance in
ialised developed world of which Europe Europe, there is also a micro-dimension
is an integral part has been the major of environmental inequality.
beneficiary of the outgoing resource- This manifests itself in growing fuel
wasting production model, the conse- poverty in Europe. As we have shown,
quences of which are disproportionately this is already posing a huge social chal-
hitting the developing poor countries. lenge. Data that reflect the effect of the
Against this background, Europe has crisis are not yet available, but there can
a crucial responsibility to reverse this be little doubt that it will have served
process and take a leading role in man- to aggravate the situation even further.
aging the transformation towards a low- Nor do we have data to show the extent
carbon and resource-efficient economy . to which different forms of vulnerability
We have shown some of the results combine within specific social groups.
that Europe has managed to achieve in Inadequate housing and inefficient heat-
this process, but these are controversial . ing systems often go hand-in-hand with
Reductions in ghg emissions were unemployment, mortgage problems and
predominantly achieved on the back of falling housing prices. In certain disad-
crises. This should not be the way for- vantaged regions some groups in society
ward! Europe cannot afford greening may become locked in, i.e. unable to stay
through recession. Further decoupling but unable to move either.
of growth from energy and resource use If we look ahead to the challenges
should be the strategy, even if this route of a just transition towards a low-carbon
is a more difficult one. economy, some policy recommendations
Major imbalances among member can be drawn. In sustainable develop-
states can be seen in this process and ment and climate policy a paradigm
these too point up the controversial fea- shift is required. Even if Europe appears
tures of certain climate policy achieve- to be performing better than the rest of
ments. In terms of resource produc- the world, the process towards the 2050
tivity (generated GDP value from unit targets is not sustainable. A more com-
resource), the gap among member states prehensive policy framework is needed
is 1:30 (Luxembourg vs. Bulgaria). Per and targets must be underpinned by
capita ghg emissions meanwhile show an functioning economic tools. Climate
opposite picture: here Luxembourg, the policy, industrial policy, employment
87
Regional inequalities in Europe
Introduction
There has long been concern about inequalities between European regions,
whether they are increasing or decreasing, and the extent to which national govern-
ment or EU intervention can help to reduce them (see Farole et al. 2011). Reducing
regional inequality was one of the key means of promoting the harmonious develop-
ment within Europe envisioned in the EEC Treaty of 1957. This objective remains
today, with the pursuit of economic, social and territorial cohesion through ever
closer regional, and national, harmonisation, as enshrined in the 2007 Lisbon Treaty.
However, deepening European integration has not always been matched with
convergence in living standards between sub-national regions within Europe. Over
the years a number of econometric studies have examined the development of
regional inequalities in Europe, garnering mixed results, often dependent on the
selection of methodology (Petrakos 2008: vii).
The expansion of the EU to include 12 new member states in Central and Eastern
Europe appears to have increased EU-wide regional inequality dramatically, a situa-
tion comparable to that experienced after Greek, Spanish and Portuguese accession.
The EU is now comprised of many diverse regions with diverse populations: some
are highly urbanised, metropolitan, and geared to knowledge-intensive economic
activity; others are rural, relatively undeveloped, and reliant on low-tech and even
subsistence agriculture. Regional inequalities are often, therefore, actually more dra-
matic than inequalities between states. As many policies are delivered at a regional
level, they are also important for service delivery.
Regional inequalities can be measured in many ways. In this chapter we map the
extent of inequalities in population, demography, income and wealth, labour mar-
kets, and education and skills. In particular, we consider the impact of the 2008/09
recession on these trends and the implications of these changes for traditional
regional policy.
Topics
88
Regional inequalities in Europe 7.
Regional demographic trends
Figure 7.1 Population density, by NUTS 2 regions (inhabitants per km), 2008
Population density, by NUTS 2 regions (inhabitants per km), 2008
Legend 324.2 9493.4 2.7 62.0 324.2 9493.4 2.7 62.0 324.2 9493.4 2.7 62.0
89
Regional inequalities in Europe 7.
Demographic trends
Figure 7.2 Percentage female participation in the workforce by fertility rate (NUTS 1)
90
percentage of women participating in
80
70
the workforce (2010)
60
50
40
30
20
10
0
1 1,5 2 2,5 3 3,5 4
fertility rate (average offspring per female head of population, 2008)
90
Regional inequalities in Europe 7.
Income, wealth and lifestyle inequalities
Figure 7.3 Regional gross domestic product (PPS per inhabitant in % of the EU27 average), by NUTS 2 regions, 2008
Population density, by NUTS 2 regions (inhabitants per km), 2008
Legend 16.0 61.0 61.0 84.0 84.0 100.0 100.0 116.0 116.0 343.0 N/A
and between member states, whilst oth- be achieved by the resident active popu-
ers have benefited from an influx of edu- lation on its own. GDP per inhabitant
A question mark cated labour. appears higher in these regions and lower
There are pronounced differences in regions with commuter outflows.
over regional in regional GDP per capita. The lead-
ing regions in the ranking of NUTS-2
income inequalities regional GDP per inhabitant in 2008
were Inner London in the United King-
dom (343% of the average), the Grand
Regional inequalities tend to follow a pro- Duchy of Luxembourg (279%) and Brus-
cyclical pattern. Developed regions grow sels in Belgium (216%) (Figure 7.3).
faster in periods of expansion and more Figures for these three regions,
slowly in periods of recession. However, however, are artificially inflated by com-
since the 2008/09 recession this relation- muters who do not reside within their
ship has been less clear. Some regions are boundaries; net commuter inflows push
stagnating relative to others, both within up production to a level that could not
91
Regional inequalities in Europe 7.
Income, wealth and lifestyle inequalities
40
BG
35
RO
30 EU27
UK
25
IT
FR
20
DE
15 NL
10
2001 2002 2003 2004 2005 2006 2007 2008
regional incomes
Despite some reservations and particu-
larities concerning regional inequalities
in GDP per capita mentioned in the pre-
vious section, geographical patterns are
relatively clear. There is a concentrated
area of affluence starting from southern
England and stretching through conti-
nental Europe to central Italy and north-
ern Spain. Regions in Scandinavia also
tend to be affluent.
All of the weakest 20 European
NUTS-2 regions, as measured by GDP
per capita as a percentage of the EU
average, are in states that joined in the
post-2004 wave of expansion; Hungary
and Poland, which joined in 2004, have
respectively four and five regions in the
bottom 20, whilst Bulgaria and Romania,
who joined in 2007, have five and six.
Figure 7.4 illustrates regional GDP
dispersion, i.e. the deviation of regional
GDP from the national average, where a
higher number denotes greater inequal-
ity. This measure was falling at Euro-
pean level up until 2008. Though there
are no figures yet available for after this
period, it could reasonably be expected
92
Regional inequalities in Europe 7.
Income, wealth and lifestyle inequalities
sland (Iceland)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
93
Regional inequalities in Europe 7.
Labour market and employment
60
EU27
50
DE
dispersion)
40
FR
30 ES
20 RO
10 GR
2002 2003 2004 2005 2006 2007 2008 2009
94
Regional inequalities in Europe 7.
Labour market and employment
Figure 7.7 Change in unemployment rate since 2008 versus starting rate (NUTS 1)
Baltic States
12
(simple percentage point change)
10
8
6
4
2
0
-2
-4
-6
0 2 4 6 8 10 12 14 16 18
outliers, in that they entered 2008 with Deutsche Mark has helped German
moderate unemployment rates but suf- exports soar, helping to reduce its disper-
Exceptions and fered very large proportional increases in sion of regional unemployment.
unemployment during 2009/10. Estonias
outliers what can unemployment rate rose from 5.5% to
16.9% in this period, while that of Lithua-
we learn? nia increased the most of all, from 5.8%
to 17.8%. This deterioration is probably
due to the huge outflows of FDI from the
Some expected that the European regions Baltic states during the financial crisis,
with the most entrenched unemploy- following a period of high foreign invest-
ment problems prior to the 2008 finan- ment in these tiger economies.
cial crisis would see the greatest rise in Another group of outliers are those
unemployment in the wake of the crisis regions that had relatively high unem-
(see Lee 2009). However, as mentioned ployment rates in 2008, but whose situ-
on the previous page, this has not always ation improved between 2009 and 2010.
been true, with some low-unemployment A total of eight of the nine regions where
regions, particularly in Spain and Greece, unemployment was above 9% in 2008,
converging towards the economy-wide but has since fallen, were in Germany.
higher average rate of unemployment. German regions accounted for
Some regions do fit the expected a total of 11 out of the 15 NUTS-1 regions
pattern: the southern region of Spain where the unemployment situation has
(covering Andalusia, Murcia, Ceuta and improved since 2008, marking Ger-
Melilla) and the Spanish Canary Islands many as an exceptional case in Europe at
both had very poor initial unemployment present.
rates at the beginning of 2008, and sub- Germanys resilience in the face
sequently suffered some of the worst fur- of the economic crisis has been built on
ther deterioration in employment. The the strengths of its Mittelstand, small
region of land, a small group of islands manufacturing firms that often have
in the Baltic Sea that is legally part of Fin- a history of location in a certain town or
land, had very low initial unemployment area, with strong links to local education
(2.2%), and saw only a small rise of 0.9% institutions and government agencies.
between 2008 and 2010 (Figure 7.7). Germany has also benefitted from its
However, there are major exceptions membership of the eurozone: despite the
to the rule. The three Baltic states (which currencys protracted problems, its low
are also treated as NUTS 1 regions) are trading value relative to the old German
95
Regional inequalities in Europe 7.
Labour market and employment
Figure 7.8 GDP spend on non-support related labour market interventions versus regional differences in levels of unemployment (NUTS 2)
30 Romania
Greece
Bulgaria
regional unemployment rate (NUTS2,
25
UK
Italy
20 Hungary
Portugal
15 Spain
2010)
Ireland
Austria
10 Finland
France
5 Germany
Sweden
Netherlands
0
Poland
0 0,2 0,4 0,6 0,8 1 1,2 1,4 1,6
Belgium
percentage of national GDP spent on non-support related labour market interventions (2009) Denmark
96
Regional inequalities in Europe 7.
Labour market and employment
Figure 7.9 Share of long-term unemployment (12 months and more), by NUTS 2 regions, 2010
Population density, by NUTS 2 regions (inhabitants per km), 2008
Legend 16.0 61.0 61.0 84.0 84.0 100.0 100.0 116.0 116.0 343.0 N/A
as skills atrophy and loss of self-confidence regions have seen long-term unemploy-
impede their search (Tominey and Gregg ment rise to above 8%.
More long-term 2005). Youth exposure to long-term unem-
Since 2008 long-term unemploy- ployment is of particular concern; young-
thinking needed ment has often risen proportionally sters who have long spells of joblessness
faster than overall levels of unemploy- are likely to suffer greater permanent dam-
ment, with many regions seeing rises age to their long-term career prospects (see
The numbers of long-term unemployed of between 100 and 500% (Figure 7.9). also Chapters 2 and 3). In many regions of
people (those unemployed for 12 months Lithuania has indeed seen a fivefold Spain, Greece and Italy there are severe
or longer) have increased since 2008 as increase from 1.23% to 7.38%. In the problems with youth unemployment which
increasing numbers in certain regions have Spanish regions of Valencia and Murcia have the potential to impact on countries
been searching for work for 12 months or the rate is 8.7% and 9.8% respectively economies for years to come. While these
more. Evidence suggests that, once individ- (both having risen almost 400% since countries have experienced economic diffi-
uals have been out of work for an extended 2008). This trend is not limited to regions culties, they have, at the same time, labour
period of time, it is much more difficult for in so-called peripheral countries; in markets with built-in restrictions on young
them to find work, as various factors such Belgium, both the Brussels and Hainaut peoples pathways to work.
97
Regional inequalities in Europe 7.
Education and skills
0,7
percentage of population working in high
0,6
0,5
value sectors (2010)
0,4
0,3
0,2
0,1
0
0 0,05 0,1 0,15 0,2 0,25 0,3 0,35 0,4 0,45 0,5
percentage of population with tertiary education (2010)
Data source: Eurostat (2010a). Employment in 'high-value sectors' is here defined as employment in knowledge-intensive industries and high/medium-high technology
manufacturing.
98
Regional inequalities in Europe 7.
Conclusions
99
Do unions and worker
representation bodies make for
more or less inequality?
Introduction
Topics
100
Do unions and worker representation bodies make for more or less inequality? 8.
Trade unions and inequality
40
35
30
25
20
15
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
labour market (2010). Trade unions have Figure 8.1). Today, various unions have
always also naturally sought to combat a strong membership concentration in
Fighting or mitigate forms of inequality stem- their traditional sectors of unionization,
ming directly from the labour market, i.e. manufacturing industry and, particu-
inequality: particularly in terms of wage inequality, larly, the public sector (Scheuer 2011),
by standardising pay and working con- which is associated with the so-called
a quintessential ditions, mainly via collective bargaining insiders, in contrast with the so-called
and the effort to influence legislation. labour market outsiders (Lindbeck and
trade union task Alongside legalisation, benefits result- Snower 2002). A considerable number of
ing from sectoral collective agreements these outsiders are workers employed
generally, in the EU, affect both union- on non-standard contracts, often entail-
Equity and equality issues being ised and non-unionised workers since ing the danger of precariousness (or
an essential dimension of employment such collective agreements are, in most vulnerability), and who, in spite of the
relations (Strachan et al. 2011), unions countries, binding upon all employers in often repeated claim that they strongly
have, in the course of their history, a certain sector. need union representation to improve
gradually learned admittedly not with- However, in the standard (and their wage and working conditions, are
out encountering difficulties, even still neoliberal) economic view, very often in actual fact less likely to belong to trade
today, within their own ranks how to based on the prevalent model of busi- unions (Vandaele and Leschke 2010).
tackle instances of inequality and dis- ness unionism in the English-speaking Alongside the fact that they are likely to
crimination. The discrimination in ques- world (which turns a blind eye to any be employed in small workplaces, sev-
tion, often based on ethnicity or gender, other, broader form of trade unionism), eral other reasons account for the under-
frequently combines with other forms there has never been any real belief representation of lower-paid workers,
of inequality more directly linked to the that trade unions have contributed to a including the fact that they probably face
labour market, such as differences in more equal distribution of wages. On the stronger liquidity constraints and might
education, experience and skills. At the contrary, there is an obstinate convic- well be disillusioned with trade unions
European level, national unions and the tion that unions are extorting monopoly given the unions low bargaining capacity
ETUC have had a role to play in regulat- rents in the form of higher wages from in the low-paid sectors and, hence, lesser
ing non-standard forms of employment non-unionised workers, which increases ability to improve wage and working con-
(part-time work (1997) and fixed-time wage inequality between unionised and ditions (Checchi et al. 2010).
work (1999) and leave schemes (paren- non-unionised workers and generates
tal leave (1996, 2009)) via directives allocative inefficiencies, i.e. a reduc-
and frameworks of actions on the life- tion of employment and a lowering of
long development of competencies and labour market efficiency (cf. Friedman
qualifications (2002) and gender equal- 1962). The current, less encompass-
ity (2005), as well as, most recently, the ing membership composition of most
framework agreement on the inclusive unions serves to reinforce this view (see
101
Do unions and worker representation bodies make for more or less inequality? 8.
Trade unions and inequality
Figure 8.2 Monthly minimum wage as % of average monthly earnings in industry and services, 2002-2008*
2002 2008
60
50
40
30
20
10
0
RO EE LV SK CZ LT HU UK PL PT IE ES BG SI BE NL FR GR LU MT
*EE, SK 2008=2006, FR, NL 2008=2007
Source: Eurostat (2011k).
102
Do unions and worker representation bodies make for more or less inequality? 8.
Inequality and worker representation
Figure 8.3 EWCs and SE works councils competent to deal with aspects of inequality (number of agreements)
effective with gender balance provision total number analysed % of total number
600 60
558
500 50
400 449 40
300 30
200 20
0 0
bodies agreements
103
Do unions and worker representation bodies make for more or less inequality? 8.
Worker participation and corporate governance
20
18 US
16 UK
14 ES
12 PT
IT
10
FR
8
FI
6 NO
4 SE
2 DK
1920
1922
1924
1926
1928
1930
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Source: Vitols own calculations from The World Top Incomes Database (http://g-mond.parisschoolofeconomics.eu/topincomes/)
crisis would appear to have had no more the World Top Incomes Database (http://
than a temporary effect in slowing these g-mond.parisschoolofeconomics.eu/
Worker increases for, after a pause in 2008, the topincomes/). Using the ETUIs Euro-
median total compensation of chief exec- pean Participation Index (EPI available
participation utive officers (CEOs) at the largest 50 at http://worker-participation.eu/About-
European listed companies increased in WP/European-Participation-Index-EPI),
can help reduce both 2009 and 2010 by between 3 and 4 it is possible to show that the share of
per cent (Vitols forthcoming). income taken by the highest earners is
income inequality Research shows that a number of lower in countries scoring high on this
institutions and policies can help mod- index (i.e. with strong worker partici-
by moderating erate the upward spiral of remuneration pation rights in company boards, at the
(van Essen et al. 2012). One relevant prac- establishment level, and through collec-
demands at the tice here is the inclusion of employee rep- tive bargaining). According to the EPI,
resentatives on company boards. Since Denmark, Sweden, Norway and Finland
top end these boards are, as a rule, responsible have particularly high EPI scores and
for determining remuneration policies these same countries also have the low-
for the top-management level, employee est income shares for the top 1%. Coun-
A key factor in explaining rising inequal- representatives have a potential voice tries scoring lower on the EPI (France,
ity is the increasing share of income and regarding executive pay. On the whole, Italy, Portugal, Spain and the UK) had
wealth claimed by the few persons at the companies with board-level employee much higher shares going to the top
top of the income distribution. This trend representation pay their CEO less, and 1%. While no causal relationship can be
has been especially strong in the English- also use less stock-based compensation, proven, it does seem that there is a link
speaking countries, for example in the than companies of similar size and type between worker involvement and mana-
US and UK where the share of income of activity that lack such representation. gerial pay levels. Such analysis indicates
accounted for by the top 1% of the popu- Other factors that can moderate remu- that worker representation can influence
lation has more than doubled since the neration are two-tiered boards and the the distribution of income at not only
mid-1970s (OECD 2011b). presence of a large shareholder (Vitols the bottom but also the top of the earn-
A major contributory factor in this 2010). ings ladder. As such, the strengthening of
respect is the massive increase in the Although additional factors such worker participation could have a benefi-
remuneration received by the top manag- as taxation policies also play a role, it is cial sandwich effect in reducing income
ers of the largest companies. Corporate striking that the top 1% share in incomes inequality by compressing both ends of
governance policies have increasingly is lowest in countries with strong worker the distribution.
oriented management remuneration to participation rights. The analysis in this
the stock market, thereby unhitching respect is based on all European coun-
management pay from the norms appli- tries for which detailed historical data on
cable to the rest of the workforce. The income distribution is available through
104
Do unions and worker representation bodies make for more or less inequality? 8.
Worker participation and corporate governance
Data source: European Commission database on women and men in decision-making (February 2012).
105
Do unions and worker representation bodies make for more or less inequality? 8.
Inequality and the legal framework for worker involvement
Figure 8.6 Multinational companies covered by the EWC directive and rate of compliance per country
350
300 75
250
200 50
150
100 25
50
0 0
LT SK MT CZ CY LI EE HU PL GR PT IE AT FI LU DK BE ES IT SE NL FR GB DE IS NO CH AU CA JP US oth
oth: other counties: AE, BH, HK, IL, IN, KR, KW, KZ, MX, MY, NZ, RU, SG, TR, TW, ZA.
Source: Jagodzinski and Pas 2010.Data source: European Trade Union Institute (2011a), EWC database, April 2010.
106
Do unions and worker representation bodies make for more or less inequality? 8.
Inequality and the legal framework for worker involvement
107
Do unions and worker representation bodies make for more or less inequality? 8.
Inequality and the legal framework for worker involvement
108
Do unions and worker representation bodies make for more or less inequality? 8.
Inequality and European Social Dialogue
Figure 8.8 What do you think are the most important subjects to be dealt with within the framework of the ESD?
reports, the total would be increased by number of sectors covered) and in most of
10; secondly, one should also add the those sectors the social partners have not
National and directives/(autonomous) agreements on yet really reached the stage of negotiating
fixed-term work, part-time work, telework framework agreements (ETUC-OSE 2011
European and on inclusive labour markets which, p. 56-60).
though catalogued under the heading The above developments represent
deregulatory working conditions and employment, all in all quite a worthwhile contribution,
all have ensuring equality and prevent- although it is clear that since the economic
trends undermine ing discrimination as one of their major crisis of 2008 the contribution clearly
concerns; and thirdly, one major attempt diminished in terms of both number and
European Social to negotiate a Directive/agreement on quality of texts.
temporary agency workers failed, with
Dialogue acquis equality protection having been one of the
major stumbling blocks. Finally, it could
also be argued that out of 7 Directive/
Since the start of the European social (autonomous) agreements and 2 frame-
dialogue at both interprofessional and work of actions, or i.e. the most important
sectoral level, the fight against inequal- instruments of the European social dia-
ity and discrimination in the broadest logue from the standpoint of their binding
sense has indeed been a key issue tackled status, only one the agreement on work-
by the respective European social part- related stress deals less directly with
ners as is clearly indicated by a recent the need to ensure equality and protect
study, conducted by the European Social against discrimination (ETUC-OSE 2011,
Observatory for the ETUC, that reflects p. 52-55).
on the state of play and prospects of the The figures contained in the same
European social dialogue (see Figure report on the issues dealt with by the
8.8). Of the 59 documents concluded European sectoral social dialogue seem
within the European interprofessional less encouraging with a considerably
social dialogue between 1985 and 2010 lower number of documents concluded
(excluding so-called follow-up reports), on the issue in question as well as docu-
8 dealt with issues such as gender equal- ments with mostly a less binding status
ity (3), disability (3), racism (1) and youth than directives or autonomous agree-
(1). Quantitatively speaking, this seems ments. This could be defended by the fact
somewhat meagre, but the figures are that only since 1998 has the European
also misleading for the following reasons. sectoral social dialogue really got off the
Firstly, by adding the so-called follow-up ground (and considerably increased the
109
Do unions and worker representation bodies make for more or less inequality? 8.
Developments of labour law on national level
Figure 8.9 Announced and/or adopted changes to IR/CB systems and certain aspects of labour law
BE BG CY CZ EE FI FR DE GR HU IT IE LV LT LU NL PL PT RO SK SI ES SE UK
Reform of Industrial relations
and collective bargaining
+ + + + + + + + + + + + + +
systems (incl. decentralisation
of CB)
Changes to
Individual/Collective Dismissal + + + + + + + + + + + + + +
rules
Changes to Organisation Of
+ + + + + + + + + + + + + + +
Working Time Legislation
legislation to extend the maximum length Romania, etc.), allowing, via this lower-
of fixed-term contracts or the permis- level bargaining, a worsening of provi-
Crisis: a pretext sible number of contract renewals. Even sions offered by higher-level collective
worse, and leading to even more inequal- agreements or even statutory legislation;
for deregulation ity and less security, is the introduction in or by simply abolishing (e.g. Hungary) or
several countries, such as Greece, Spain seriously curtailing the role and impact
or the Czech Republic, of so-called new of tripartite social dialogue institutions
The economic crisis of 2007-2011 hav- types of contract, almost all of which (e.g. Romania) or denying traditions of
ing already led to significantly less Social are, of course, temporary in nature, with social dialogue (Belgium). Such steps
Dialogue texts being issued and to a dete- even less protection for the workers con- will also have serious consequences for
rioration in their quality, might, in addi- cerned than for those working under the European social dialogue as there is a
tion, damage the role and contribution normal atypical contracts, and are often correlation between the impact and suc-
of the European social dialogue (ESD) in directed at specific groups e.g. young cess of the ESD and that of the national
ensuring more equality, non-discrimina- people already finding it difficult to social dialogue yet another conclusion
tion and social cohesion. Several recent enter, progress and remain on the labour to be drawn from the joint European
reports indicate that in these times of cri- market (see Chapter 2). Equally nega- social partners evaluation of the ESD
sis rights at work are under serious and tive in character are measures that sim- and its instruments during 2011 (ETUC
constant threat throughout Europe (e.g. ply offer exemption for small businesses et al. 2011). Fortunately, at least on the
Tajgman et al. 2011, Clauwaert 2011). Nor from (new) employment legislation for trade union side, the ETUC-OSE study
is this the case only in countries hardest a certain period of time (e.g. UK). In addi- revealed also that almost 95% of the
hit by the crisis and faced with drastic tion, these drastic labour law reforms are ETUC member unions having responded
social reforms imposed by IMF, ECB and invariably accompanied by equally intru- to the evaluation survey consider that
EU Troika (like Greece, Ireland and Por- sive and downwards reforms of social the European social dialogue, whatever
tugal); it is happening also in other coun- security and assistance protection as its shortcomings, remains very impor-
tries where governments invoke crisis as well as wages and wage-setting mecha- tant and in need of strengthening. What
a pretext to introduce piecemeal deregu- nisms, thereby increasing inequality is more, as Figure 8.8 shows, next to the
latory measures or even complete over- and diminishing social cohesion even two (surprising) top issues of working
hauls of labour codes designed to achieve further. Finally, and this is possibly the time and information and consultation
the same deregulatory effect. In respect most harmful factor in relation to the as matters for European social dialogue,
of any of several key issues covered by the (European) social dialogue, is that these between 53% and 58% of respondents
European social dialogue, it is possible to labour law reforms often go hand in hand judged five other topics to be very impor-
cite numerous reforms in several coun- with fundamental changes to industrial tant, namely, atypical work, non-dis-
tries regarding atypical contracts/work relations structures and processes by, for crimination, the integration of migrant
(fixed-term, part-time and temporary instance, decentralising collective bar- workers, the social consequences of
agency work) designed to make labour gaining as far as possible to the company restructuring, and gender equality.
markets more flexible by introducing level (e.g. Italy, Greece, Portugal, Spain,
110
Do unions and worker representation bodies make for more or less inequality? 8.
Conclusions
111
Working conditions to blame for
wide gaps in workplace health
Introduction
Health gaps between Europes workers are widening. Working conditions play
a big part in the inequalities found between men and women, manual and non-
manual workers, or young and older workers.
The physical hazards of work be they toxic chemicals, unsuitable work
equipment or noise and dust levels spread the risks very unevenly. Work
organization, moreover, includes a set of intangible factors like monotonous tasks,
discretion over how to perform the job, the ability to pace ones own work and/or
take breaks.
Workers terms of employment also play into the factors already mentioned.
A growing number of workers, especially young people, are in precarious jobs which
may fall into specific legal categories, like agency or fixed-term contract work. Part-
time jobs, meanwhile, are taken predominantly by women (see also Chapter 2), and
this form of work tends to offer less discretion in terms of work organization, as well
as poorer career prospects.
This section takes a condensed look at selected data from the fifth European
Working Conditions Survey (EWCS) (2012) carried out by the European Foundation
for Improvement of Living and Working Conditions. Rather than limit the
examination of findings to a review of national averages which tend to smooth
out inter-group differences, the choice has been made, in order to focus on the
dimension of inequality in working conditions, to point up some salient differences
between manual and non-manual workers, between different skill levels, and
between men and women.
Topics
112
Working conditions to blame for wide gaps in workplace health 9.
Physical factors in working conditions
Figure 9.1 Physical factors: Are you exposed at work to noise so loud that you have to raise your voice to talk to people?
Percentage of respondents answering Yes, at least a quarter of the time
70%
high-skilled clerical low-skilled manual
60%
50%
40%
30%
20%
10%
0%
NL UK CY PT IT RO MT DK IE EU FR BE LU AT CZ BG LV LT DE PL EL SI HU ES SK FI EE SE
27
Source: European Foundation for the Improvement of Living and Working Conditions (2012).
113
Working conditions to blame for wide gaps in workplace health 9.
Work intensity
Figure 9.2 Work intensity: percentage of workers exposed to more than three constraints
60%
high-skilled clerical low-skilled manual
50%
40%
30%
20%
10%
0%
DK NL PT IT LV AT PL LT LU BG DE SI BE ES EU SE EE RO SK FR CZ IE EL CY MT UK FI HU
27
Source: European Foundation for the Improvement of Living and Working Conditions (2012).
Increased stress and associated psychological disorders (general fatigue, insomnia, depression, irritability, etc.).
Work intensity is also a factor in work-related accidents. Rush work does not always leave scope for coping with
unforeseen circumstances.
114
Working conditions to blame for wide gaps in workplace health 9.
Work intensity
115
Working conditions to blame for wide gaps in workplace health 9.
Work organisation
80%
high-skilled clerical low-skilled manual
70%
60%
50%
40%
30%
20%
10%
0%
DK FI SE RO NL DE LU LV BE AT MT EU IE EE LT UK SI SK PL FR ES HU EL BG CZ PT IT CY
27
Source: European Foundation for the Improvement of Living and Working Conditions (2012).
116
Working conditions to blame for wide gaps in workplace health 9.
Presenteeism
Figure 9.5 Presenteeism: Over the past 12 months, did you work when you were sick? Percentage of respondents answering Yes
80%
high-skilled clerical low-skilled manual
70%
60%
50%
40%
30%
20%
10%
0%
PL BG IT PT LT RO EL AT IE NL CY HU EU DE LU EE CZ ES BE SK LV FR MT FI DK UK SE SI
27
Source: European Foundation for the Improvement of Living and Working Conditions (2012).
117
Working conditions to blame for wide gaps in workplace health 9.
Sustainable work
Figure 9.6 Work sustainability: Do you think you will be able to do your current job when you are 60 years old?
Percentage of respondents answering Yes, I think so
80%
men women
70%
60%
50%
40%
30%
20%
10%
0%
SI PT FR GR ES BG CZ SK HU PL LU MT RO AT LT EU IT EE BE LV CY FI UK IE DK SE DE NL
27
Source: European Foundation for the Improvement of Living and Working Conditions (2012).
118
Working conditions to blame for wide gaps in workplace health 9.
Conclusions
119
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List of figures
List of figures
1. Macroeconomic developments, policies and inequality Figure 3.7 In-work at-risk-of-poverty rate by education level... 47
Figure 3.8 Early school leavers, old member states (1)........ 48
Figure 1.1 Real GDP growth EU27-US................................. 11 Figure 3.9 Early school leavers, old member states (2)....... 48
Figure 1.2 Change in real GDP..............................................12 Figure 3.10 Early school leavers new member states............ 50
Figure 1.3 Forecasted real GDP change................................13 Figure 3.11 Young people not in employment, education
Figure 1.4 Gross public debt/GDP.........................................14 or training by NUTS 1 region (NEET rates),
Figure 1.5 Government total and primary budget deficit....15 old member states (1)...........................................51
Figure 1.6 Counter-cyclical fiscal policy...............................16 Figure 3.12 Young people not in employment, education
Figure 1.7 Procyclical fiscal policy........................................ 17 or training by NUTS 1 region (NEET rates),
Figure 1.8 Spreads of selected countries 10-year old member states (2)...........................................51
government bonds over German bonds .............18 Figure 3.13 Young people not in employment, education
Figure 1.9 GDP per capita growth rates................................19 or training by NUTS 1 region (NEET rates),
Figure 1.10 GDP per capita growth rates............................... 20 New Member States............................................ 52
Figure 3.14 Tertiary educational attainment by age............. 53
Figure 3.15 Score point difference in reading performance
2. Inequality on the labour market in the PISA index of ESCS................................... 54
3. Education and inequality in Europe: a youth perspective 5. Social security and inequality
Figure 3.1 Employment rate and changes by age and low Figure 5.1 Social protection spending as a percentage
educational attainment (ISCED 0-2)..................41 of GDP.................................................................. 73
Figure 3.2 Employment rate and changes by age and Figure 5.2 Efficiency of tax benefit systems in reducing
medium educational attainment (ISCED 3-4).... 42 poverty, women 18 to 64 years, 2005 and 2010.....74
Figure 3.3 Employment rate and changes by age and high Figure 5.3 Efficiency of tax benefit systems in reducing
educational attainment (ISCED 5-6)................. 43 poverty, men 18 to 64 years.................................74
Figure 3.4 Unemployment rates by age (25-29) and high Figure 5.4 Correlation between income inequality for
educational attainment (ISCED 5-6)................. 44 women and cash benefits.................................... 76
Figure 3.5 Unemployment rates by age and medium Figure 5.5 Correlation between Income inequality for
educational attainment (ISCED 3-4).................. 45 women and in-kind benefits................................77
Figure 3.6 Unemployment rates by age and low Figure 5.6 The Gini coefficient -
educational attainment (ISCED 0-2)................. 46 Inequality of income distribution...................... 78
128
List of figures
List of figures
129
List of abbreviations
List of abbreviations
DAE Digital Agenda for Europe, a flagship initiative of the Europe 2020 strategy
EU European Union
130
The Benchmarking Group
Foreword
Bernadette Sgol, ETUC, General Secretary
Maria Jepsen, ETUI, Director of Research Department
Philippe Pochet, ETUI, General Director
Introduction
Christophe Degryse (ETUI)
Chapter 1
Macroeconomic developments, policies and inequality
Sotiria Theodoropoulou and Andrew Watt (ETUI)
Chapter 2
Inequality on the labour market
Janine Leschke (ETUI)
Chapter 3
Education and inequality in Europe: a youth perspective
Margherita Bussi (ETUI)
Chapter 4
Collective bargaining and diversity in wage developments
Vera Glassner and Magdalena Bernaciak (ETUI)
Chapter 5
Social security and inequality
Maria Jepsen (ETUI)
Chapter 6
Climate change and inequality
Bela Galgoczi (ETUI)
Chapter 7
Regional inequalities in Europe
Neil Lee and Mark Lloyd (The Work Foundation)
Chapter 8
Do unions and worker representation bodies make for more or Giovanna Corda, ETUI, documentation centre
less inequality? Romuald Jagodzinski, ETUI, editor
Aline Conchon, Stefan Clauwaert, Romuald Jagodzinski, Kathleen Llanwarne, ETUI, language editor/translator
Isabelle Schmann, Michael Stollt, Kurt Vandaele and Irmgard Pas, ETUI, data-processing manager
Sigurt Vitols (all ETUI) Eric Van Heymbeeck, ETUI, layouter
131
List of regions (NUTS 1) codes
132