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28 September 2014

Crossroads conference: “Precarity is not a vision for the future”

Ségol - Beyrer

The last day of the ETUI-ETUC conference on 'Europe at a Crossroads' terminated in a lively debate between ETUC General Secretary Bernadette Ségol and BusinessEurope Director General Markus Beyrer, moderated by Jacki Davis.

'Is precarity the only vision for the future?' was the question. Bernadette Ségol didn't think so. “It's not a solution either for workers or companies,” and she was not convinced that having any job was better than none at all. But policies put in place to respond to the crisis have failed, and an alternative path is needed. “We need a substantial EU investment programme. It's the only thing that can boost growth and employment.”

Markus Beyrer took a different view, arguing that the EU had no alternative to the policies it has adopted. Europe needs to create a pro-business environment, and he hoped Jean-Claude Juncker's plan for the incoming European Commission would be a step in the right direction. “Precarity is not the only way,” he agreed, but he wanted competitiveness to take top priority in the search for high quality jobs. He deplored Europeans' “technology austerity”, which he claimed makes them unwilling to take risks in order to innovate. “Let's assess and control risks. But if we try to exclude all risks, it's the end of technological progress,” he insisted.

For Bernadette Ségol, tackling growing inequality is the top priority: not only a moral obligation but also an economic one. Defending Europe's social model, she pointed out that Nordic countries already combine high levels of equality with economic success.

One thing both speakers did agree on was the importance of social dialogue in deciding the best way forward for both workers and companies.

Is unemployment inevitable? That was the question facing speakers in the earlier plenary session on the future of jobs. But there was no overall consensus on the answer.

“No” said Prakesh Loungani from the IMF. “Yes” said Danish ALDE MEP Ulla Tørnæs. Up to a point, concluded Andrew Watt from the Macroeconomic Policy Institute IMK. It was generally recognised, though, that whereas a modest rate (around 3%, suggested Andrew Watt) of 'frictional' unemployment might be acceptable as the price of freedom and efficiency in the labour market, the current high rates of joblessness are damaging society in the EU.

Prakesh Loungani identified unemployment as a policy choice. In the recent crisis, it was linked to the fall in output, and became inevitable as the collapse gathered pace. Nonetheless, some countries adopted policies – like work-sharing in Germany – that reduced the impact. These could have been replicated elsewhere. The response now should be “two-handed” - on the supply and demand side – plus a social compact to restore public confidence.

“Fixing unemployment is often a question of getting macroeconomic policies right,” he explained. Output is slow to recover because governments are balancing different policy goals – including debt management – and are therefore unwilling to offer support through public spending.

Andrew Watt agreed: “It's macroeconomic policy, stupid!” he insisted, paraphrasing the famous Bill Clinton quote. He drew attention to high variations in unemployment levels in Europe, which are taken to imply that some countries have “done their homework” in making structural reforms. But are these the answer? A staggering 3,500 labour market reforms have taken place in EU Member States since 2000, while unemployment has risen at the same time. “There is no sensible relationship here,” he concluded. “The structural approach has been privileged wrongly in Europe.” Sustained high unemployment is not inevitable, but can only be addressed by switching macroeconomic policy away from austerity.

Christine Erhel from the Université Paris I and CEE, was concerned about the polarisation of wages, pointing out that less qualified workers have suffered most from unemployment. The answer should be education, training, research and innovation, plus minimum wages, to foster quality jobs. “Growth will reduce unemployment, but inequality may continue, especially for the low-qualified,” she warned.

Ulla Tørnæs saw the answer in the Danish 'flexicurity' model, combining a comprehensive social security system with greater flexibility for companies in recruiting and dismissing staff. “The keyword of the future labour market is flexibility.”

Although the panel was asked to be up-beat, there was not a great deal of optimism in Maria Helena André's (ACTRAV) observation that globally, 200 million are out of work, 40% of them young people, and one-third of workers worldwide are working poor. She agreed that this situation arises from political choices, not political options. “Trade unions should unite to influence politicians to go in the right direction,” she urged.

Dutch S&D MEP Agnes Jongerius said European labour, already under pressure from globalisation and developing economies, is being sacrificed to compete with other countries. She warned that polarisation also means middle class jobs are disappearing. “There's a link between a strong middle class and growth,” she explained. “European leaders should stop scapegoating workers for failures of policy-making.”

The conference concluded at the end of three days, 16 panels, five plenary sessions and some 30 hours of discussion. A full report will be published soon.

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