Evidence fuels demand for higher wages

Low wages are holding back recovery in the EU. Official confirmation came from EU Commissioner for Economic and Financial Affairs Pierre Moscovici. Unveiling the EU’s Autumn 2017 economic forecast, he warned of “untypically low wage growth”.

Although moderate recovery is underway, he indicated “challenges remain in the form of high debt levels and subdued wage increases. A determined effort from Member States is needed to ensure that this expansion will last and that its fruits are shared equitably.

“The economies of all Member States are expanding and their labour markets improving, but wages are rising only slowly,” he went on. “Although the cyclical recovery has now been underway for 18 uninterrupted quarters, it remains incomplete.” At the same time, core inflation is rising.

The forecast comes in the wake of support from both the European Central Bank and the International Monetary Fund for higher pay for European workers.

One of the 20 principles of the European Pillar of Social Rights, proclaimed by EU leaders in Gothenburg on 17 November, relates specifically to wages, declaring:

“Workers have the right to fair wages that provide for a decent standard of living. Adequate minimum wages shall be ensured, in a way that provides for the satisfaction of the needs of the worker and his / her family in the light of national economic and social conditions, whilst safeguarding access to employment and incentives to seek work. In-work poverty shall be prevented. All wages shall be set in a transparent and predictable way according to national practices and respecting the autonomy of the social partners.”

However, the ETUC has highlighted the vital importance of turning these principles into real progress, visibly improving the lives of workers and their families across Europe.

In a declaration published in advance of the EU social summit in Gothenburg, socialist Labour ministers from seven EU Member States also called for the EU to “take a social turn to regain the confidence of its citizens”, specifically reducing poverty and inequalities. In other words, the European Pillar of Social Rights must lead to concrete measures to end in-work poverty and secure decent wages for all workers.

Recognising that “wealth will not trickle down by itself”, the ministers demanded a clear objective for wage increases, raising them at least above poverty levels and taking account of national circumstances. The European Semester must include a wage indicator in the social scoreboard, along with increased support for collective bargaining as part of the EU’s socio-economic coordination. The ministers called for the at-risk-of-poverty threshold to be set at 60 % of the national median equivalised disposable income, after social transfers, according to Eurostat’s definition.

Equal pay and equal rights for work of equal value must be guaranteed. This means concluding a fair revision of the Posting of Workers Directive, and introducing and monitoring clear and binding targets to reduce the gender pay gap.