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26 September 2014

Europe at a crossroads: “Quality of today is growth of tomorrow”

Good jobs and a fairer, more equal society were the recurrent themes of the second day of the ETUI-ETUC conference: Europe at a Crossroads.

In one of the parallel plenary sessions of the afternoon, participants tackled the core question of how to reconcile quality jobs with competitiveness, or whether the two are mutually exclusive.

Wage costs are often viewed as a major factor, but evidence shows low pay does not boost competitiveness: other factors take precedence. Stefan Collignon from the Sant'Anna School of Advanced Studies challenged assumptions about the competitiveness of the Greek and German economies. Although wages have fallen in Greece as a result of the crisis, competitiveness has not increased. Germany, where labour costs have also dropped, has achieved only a minor increase in market share, making it “a big overvalued illusion”.

MEP Philippe Lamberts from the Green group in the Parliament offered a consumer's guide to competitiveness, contrasting value with cost, which has four elements: labour, energy, raw materials and capital. The EU has adopted a short-term, cost-cutting strategy, sourcing cheap, dirty energy and cutting labour costs, he claimed, while capital returns remain untouched. Quality jobs can be combined with competitiveness, if energy and resource efficiency are improved and profits reinvested.

Alfred Kleinknecht from TU Delft warned that even if Europe returns to growth, it may be jobless growth. Anglo-Saxon-style labour market reforms leading to lower wages and flexible working would reduce productivity and damage innovation as well as social standards, he argued. The two alternatives facing Europe are a supply-side economy with a diminished welfare state and growing inequality, or a European Social Model, with quality jobs but perhaps shorter working hours in order to create more of them.

From the European Commission DG Employment, Detlef Eckert said there should be no trade-off between quality jobs and competitiveness, but Europe needs to attract investors. Some high-tech industries remain very competitive, and wages are not at risk, but in the service sector companies are putting pressure on low-skilled staff in order to boost returns on capital. “Competing on costs is not our strategy, we need to compete on quality,” he said. “We need to invest more in human capital. It's key for the future.”

Summing up the debate, Józef Niemiec from the ETUC insisted the EU has chosen policies leading to high unemployment and precarious jobs. “We have argued for several years that Europe could do it differently. There is no evidence that structural reforms bring positive results.” By contrast, collective bargaining and fair wages can go together with competitiveness, as in the Nordic countries.

Throughout the day, 12 different workshops considered various aspects of the choices facing Europe, ranging from the impact of an ageing population and worker mobility in the EU to green jobs, health and safety at work and deregulation.

They emphasised that investment is needed to create quality jobs and prosperity. Without public and private investment, including access to credit for small businesses, Europe cannot grow. The cost of failing to invest in education, training, and lifelong learning will be even higher in the long run. One shocking illustration is that occupational diseases and accidents cost some 4% of EU GDP.

Inequalities pose a major threat to our societies. Decent wages are essential for all workers – not just for fairness but also to drive demand that will fuel recovery and generate more quality jobs. This means tackling the problem of wage dumping and establishing a European system of minimum wages.

The message from many panels was that trade unions must play a key role in fighting for an alternative vision of society, even going so far as to become a ‘new political force’ defending the interests of all vulnerable groups in society.

Journalist Jacki Davis who had the task of 'weaving' together many of these themes, challenged some of the myths:

  • That poor quality jobs are a ‘stepping stone’ to better jobs;
  • That jobs are a route out of poverty (not necessarily, given the growing proportion of working poor);
  • That migrants are travelling from one EU country to another to take advantage of generous welfare systems.

Social dialogue is key to addressing these issues, but is under pressure in many countries. The crisis has been used as a pretext to attack it. Europe is no longer setting an example for the rest of the world to follow, with potentially disastrous consequences not only within the EU but beyond its shores.

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