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19 November 2013

How the crisis is affecting the job market and collective bargaining

The ETUI held a conference entitled “Getting Europe back to Work: Alternatives to Austerity” on 6 November in Brussels when ETUI and academic researchers unveiled the results of their recent work on policies for consolidating Greek public finances and the impact of austerity measures on the job market and collective bargaining systems.

Nicos Christodoulakis, professor of economics at Athens University of Economics and Business (AUEBB) painted a harrowing picture of the austerity policies imposed on his country by the troika (Commission, IMF, ECB). "They have failed absolutely, not one of the projections has materialized", said the economist, citing the figures: unemployment up from 8.5% in 2006 to 27% today, an average 23% cut in public sector wages for no effect on Greek exports, collapsing tax revenues, etc.

Among the possible ways out of the crisis proposed by Mr Christodoulakis, who was Minister for the Economy from 2001 to 2004, was recapitalizing the banks through the European Financial Stability Fund (EFSF).

Germany and Poland have weathered the crisis with relatively low unemployment compared to their European neighbours. Some observers claim this success is due to labour market reforms in the two countries helping to create new jobs. Klaus Dörre of the University of Jena, and Adam Mrozowicki of the University of Wroclaw, presented the flip side of these jobs.

"Among workers aged under 25, non-standard jobs are becoming the norm and low-wage jobs are now being done by skilled or highly skilled workers", argued Mr Dörre. The German sociologist finds evidence of an increasing stigmatization of the unemployed and adaptive coping behaviour developing among contingent workers, a kind of "resignation to living outside society", while workers fortunate enough to be in standard jobs no longer share feelings of solidarity with "non-standard workers" - and especially not the unemployed - but only with similarly situated workers, which Klaus Dörre calls "exclusive solidarity".

While Germany has its midi and mini-jobs, Poland passed legislation in 2009 authorizing new types of contract not covered by labour laws. Adam Mrozowicki estimates that at least a million workers now work under these so-called "civil" or "self-employment" contracts but without the rights that other employees have in terms of union representation, health and safety at work, pensions, etc.

The data collected by Agnieszka Piasna at European level point to a serious decline in the quality of employment between 2005 and 2010. Involuntary part-time and short-hour work has increased since the crisis, said the ETUI researcher.

The crisis has also told heavily on collective bargaining with knock-on pressure on wages in some sectors. "The collective bargaining system has been all-but wrecked in Ireland and Romania," said Torsten Müller and Magdalena Bernaciak. The ETUI researchers have observed a decentralization of collective bargaining along with increased government intervention in it. This has mainly affected southern and eastern Europe, while northern countries have been comparatively spared.

This is all bad news for employees and requires transnational union solidarity. Vera Glassner, a researcher at the University of Linz’s Institute of Sociology, found that the crisis had had the opposite effect of considerably hampering efforts to internationalize collective bargaining.

The deterioration of wages in many European countries has revived the idea of ​​a European minimum wage. This was looked at by the ETUI in a September report, one of whose authors, Andrea Garnero (Free University of Brussels), had found evidence of the minimum wage being got around illegally (flouted by some employers) or even completely legally through “bogus self-employment” schemes in countries that have one. In light of the many obstacles that abound, Mr Garnero argued that the debate should focus on the aim of better coordinated national minimum wage policies rather than the adoption of a European minimum wage as such.

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