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Tuesday, 21 January 2014

The European Commission identifies the ‘working poor’ as a substantial hazard for the societal cohesion within the member states of the EU. They are right!

Today, European Commissioner László Andor of Employment, Social Affairs and Inclusion held a very inspiring speech. This speech was part of the events that accompanied  the ´Annual report on Economic and Social Development in Europe´.
László Andor’s speech was not so much inspiring as a result of his flashy presentation or the language he used. To the contrary: it was held in the typical European Union language ‘Brusselenglish’ and it was uttered by someone, who was never chosen for his charisma, but rather for his lack of it.

Nevertheless, the contents and context of this very short speech were remarkable and interesting. That is the reason that I want to spend this article on it.

Andor spoke about the need for the governments and employers of the EU member states to not only enable and create jobs for the unemployed Europeans, but to create jobs for them that would lift the European men and women out of poverty. That was a very important statement.

In his speech, Andor even dared to be iconoclastic against the neoliberal dogma that ‘social benefits make people lazy and self-satisfied’.

Here is the integral speech, accompanied by my comments:

A significant increase in the risk of poverty among the working age population is one of the most tangible social consequences of the financial and economic crisis in Europe. Even if unemployment is gradually reduced as currently projected, this may not be enough to reverse rising poverty, especially if wage polarisation continues, notably due to a rise in part-time work.

My comments: You can’t overstate the importance of this statement. That poverty and economic hardship is always looming for the unemployed people all over Europe, living from social benefits or not, can hardly be called surprising.

However, when unemployed people get a job, the ‘communis opinio’ is always that their worries are over and possible poverty will be behind them. That is not true, per sé. Even for employed European citizens, there is:
  • The race to the bottom for wages and fees, especially for lower class workers, contract workers and temporary workers. This race has been initiated at many European companies and government bodies;
    • as a consequence of the vast income differences between the West and East-European citizens;
    • as a consequence of the desire for companies and government bodies to cut expenses to the bone and strongly improve their margins;
  • The deterioration in the amount of full-time, fixed labour contracts, in favor of flex-contracts (f.i. zero hour contracts), temporary contracts, piecework contracts or part-time contracts with unfavourable working hours;
    • Postmen, who get paid per delivered letter, instead of being on a monthly salary;
    • Freelance truck-drivers, who have to wait by the phone, hoping that their principal calls with an assignment for them;
    • Germans who have a so-called mini-job: a part-time job, which pays only €400 per month, forcing the person with the job to look for additional work in order to earn enough income to live from;
  • The situation with workers from the low wage countries, who are sometimes working and living in West-Europe under circumstances, which are akin to modern slavery:
    • People, who are working very long hours without any of the normal rights and privileges that domestic workers have;
    • Workers, who have to pay a considerable share of their poor wages for housing and food, while their living circumstances are terrible.
These are all circumstances that many people and companies rather look away from, like an ostrich digging his head in the sand.

And of course, there is the issue of the growing divergence between the lowest wages and the highest salaries and fees in the European countries: a result of the mindset of the current generation of entrepreneurs, executives, managers and financial wizards, who often think that they have God-given talents, which should be rewarded accordingly.

Every attempt by politicians to level out these huge income differences, in favour of the classes with the lowest income, have been doomed. These attempts were met with massive protests, widescale political lobbying from special interest organizations and threats by people and companies to ‘move to other places’ if politics didn’t back down. Subsequently, the politicians scared away from this subject again.

In 2013 we have seen some tentative signs of economic recovery from the double-dip recession: GDP grew in the second and third quarters of the year, unemployment stopped rising and employment stopped falling. However, this recovery is still very modest and rather fragile. We have not yet begun to make up for the job losses of the past five years. Long-term unemployment is still on the rise in most Member States, as well as precarious jobs

My comments: Again this is an important statement. I definitely think that the massive unwinding of the excess capacity in many industries has not finished yet and won’t even finish before 2017 or 2018.

The building and construction industry, the automobile industry, the financial industry and the commercial services industry are among the industries, where capacity must be strongly diminished and/or where the ubiquitous automation and robotization takes away many hands-on production jobs; consequently, these jobs are on the line.

Besides that, as I mentioned earlier in this article, there is a large and growing group of European citizens – especially youngsters – whose flexible, piecework or part-time jobs offer so little security, that they can’t acquire things and services that many older Europeans take for granted: an owner-occupied house, a car, a healthcare insurance and a family, to mention a few. These people must live in the knowledge that their job can be finished by the day, when somebody calls in who asks less salary.

That is not a comforting thought…

Our analysis shows that getting a job is a way out of poverty in only half of the cases. Much depends on the type of job found, the level of pay and the number of hours worked. It also depends on the composition of the household and the working situation of the partner. Unfortunately we cannot say that having a job necessarily equates with a decent standard of living.

My comments: Amen!

In the past, the European Council, European Commission and national governments have too often left the topic of ‘fair remuneration’ to the market, where it does not belong in the first place.

National and supranational governments have to decide upon the level playing field, of which all workers must be part, and have to set the boundaries for fair payment and necessary working conditions, to which all employers must comply.

Jobs which violate the (supra)national minimal payment standards or that offer unfair working hours and conditions should be forbidden and – when necessary – even penalized by the (supra)national governments.

Poverty is especially likely to remain a growing problem if polarisation between high and low wages continues, and if more and more people are obliged to work only part-time. Therefore, policy-makers need to aim not only to create jobs, but also to ensure inclusive labour markets and decent working conditions. Moreover, governments must continue to provide income support and other social expenditure, including for households whose members do have a job, if people are to exit poverty.

The Review also shows that, contrary to many commonly held views, job seekers receiving unemployment benefits are more likely to get a job than those who don't receive benefits. Why is that? Because well-designed unemployment benefit systems, such as those that reduce the generosity of the benefits over time, require unemployed people receiving benefits to actively look for a job. Moreover, these unemployed receive advice from job centres and have better access to training. 

My comments: Finally, there is an official that does not want to reduce unemployment benefits and social benefits to the bare minimum, on which people can hardly live.

Finally Andor officially debunks the neoliberal dogma that decent benefits make people lazy and self-satisfied and that only order, discipline and ‘financial starvation’ can get people back to work.

I have nothing against the demand, that unemployment or social benefits should have goals and targets set in them. People, who live from a benefit should indeed invest their time and energy in acquiring a new job and not wait until they are unnegotiable for such a job.

However, lately it seemed sometimes – at least in The Netherlands – that every unemployed man or woman, living from unemployment benefits or welfare was an antisocial sponger. Someone, who should be treated with the utmost distrust and stringent supervision: a very small carrot and a very big stick:
  • Entrepreneurship was the standard in The Netherland;
  • Workers on the payroll were failed entrepreneurs: people without guts, who should not whine about their salary and secondary benefits;
  • People receiving welfare were lazy, socialist spongers, who should get their b*tts kicked, instead of being treated with respect and compassion.

It is good to read that at least commissioner László Andor thinks, that this attitude and behaviour against the unemployed was wrong. And that unemployed people should receive more understanding, training and guidance on their way to (hopefully) a new job.

And at least their time of being unemployed should be fruitful and satisfying, even when a new job is impossible at that moment. If you look for instance at the unemployment situation in Greece, Spain or the other PIIGS countries, then you understand that those 50-odd percent unemployed youngsters in Spain and 30-odd percent unemployed older workers in Greece don’t do this out of luxury, but because they really can’t get a job.

These people don’t deserve our scornful laughter, envy and anger, but our help, support and compassion.

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