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Welfare and Social Issues

The Struggle for Social Europe

By Laurent Standaert , Maria Jepsen

With the fragmentation of work and the rise of the gig economy, workers’ rights are challenged across Europe. Does renewed discussion at EU level present an opportunity to advance social Europe? An interview with Maria Jepsen on the convergence – or lack thereof – of working conditions in the EU and the fight for workers’ rights in the era of Amazon Mechanical Turk.

Laurent Standaert: The Benchmarking Working Europe report released earlier this year focuses on ‘social convergence’, the question of whether living standards and social standards will raise to similar levels across the EU. What are the main lessons of the report?

Maria Jepsen: The thing is that we’re not really seeing a social convergence materialise. Central and eastern countries are catching up somewhat in terms of the levels of employment and wages. But the pace of this catch-up has clearly slowed since the economy started picking up again around 2013. In the southern European countries, we are observing a ‘divergence’. While the South had been catching up with the richer parts of Europe in socioeconomic terms since they joined the European Union, that progress has now vanished. The crisis wiped out years of efforts.

It is especially alarming because these countries have been part of Europe for quite a long time. They are a part of the economic and monetary union and of the open method of coordination on social protection and employment too. While the European treaties call for upwards harmonisation of living and working conditions in the long run, the mismanagement of the crisis has set so many countries back. It is not that no convergence is taking place at all, but the picture is very different across Europe. It is neither stable nor sustainable.

Does that point to the lack of binding social mechanisms at the European level, unlike those instruments in place as part of economic and monetary union?

The Treaty sets the European Commission’s competencies in terms of what they can act on. There is a clear hierarchy that was there from the very outset of the European Union. The European institutions can only coordinate on some employment and social issues. From one point of view, not having binding instruments has led us into the situation where we are today. However, you could also argue that it’s precisely because there are so many binding economic instruments that we are unable to do what we need to do socially. It’s probably a mixture of the two. Over the past 10 years, we have overemphasised the management of deficits and public debt as the central narrative and policy solution, to the clear neglect of social issues. We have made the labour market so flexible that is going to haunt us for years and we have stopped investing in social infrastructure such as the education system and in making sure that people have income security when they’re out of work. There was some work done on social policy issues, but if one looks what Member States actually are doing, it’s far below what is necessary.

So growth is back but it cannot make up for this lack of attention to the social. The types of jobs created today are insecure and do not offer many prospects for the future. In addition, there is a real public trust issue nowadays. Because there were so many pension reforms during the crisis and such high youth unemployment, people today, especially the young, doubt whether they will have a job at all, let alone social protection and a pension when they retire. This is very dangerous because it means that people no longer trust in the collective system built to provide for them when they are in need.

The welfare state spending on social protection in most EU Member States did not go down during the crisis. Unemployment recently started to decrease and growth is back, but it is badly redistributed and not sustainable. This is a difficult situation for trade unions and progressive social forces because the proponents of neoliberal economics can claim that their policies worked and did not even affect social protection, at least in gross and quantitative terms. How can we fight this dominant narrative?

Yes employment has been created and unemployment has gone down, but one needs to look a deeper and see the quality of jobs feeding employment stats. Is working two hours a week a real job? You can’t live off of that! That’s part of the message we are trying to send: yes employment is being generated and that’s good, but the quality of work and the volume of work are not really there. For example, where 100 people were working to generate 1000 hours of work, today the same 100 people only generate 990 hours of work.

Once you look at the data on part-time work, fixed-term contracts, and super short-term fixed-term contracts, it is evident that the kind of employment generated since the crisis is different to before. Numbers around employment and unemployment without that analysis do not tell you much about the lives of people actually working.

To come back to your question, globally social protection expenditure in EU countries did not face massive cuts but nor did it increase much. Actually in countries that faced a massive crisis, social protection expenditure per capita did decrease, and these are the countries where one would expect the expenditure per capita to increase. Secondly, spending should have increased to respond to the distress in the labour markets and the massive rise in unemployment across the EU. This would have enabled all countries to better cope with crisis. But what happened is that Member States restrained social protection spending and cut investments in areas like education or public services. Today we’re facing up to the disaster of having cut that investment.

In recent months, there has been much publicity about the resurrection of the social question for the EU. A European social summit was held in 2017, commitments have been made through the European Pillar of Social Rights, a European Labour authority is being set up, and various employment-related EU directives are being revised. What do you make of this renewed attention to social issues at the EU level?

We’ve opened up boxes that we never should have in terms of flexibilisation and the growth of ‘labour on demand’. In some countries, it has gone quite far such as with the civil-law contracts in Poland, the zero-hour contracts in the UK, or the extremely short-term contracts in Spain. It seems easier to get away with deregulation early on, but it is much more difficult to re-regulate at a later stage.

What will the European Pillar of Social Rights do to address this challenge? First of all, the merit of the pillar of social rights is that it treats the social as a central question after 12 years of no discussion at all. Since 2005, the social question has evaporated. There was a bit of talk about flexible security – flexicurity – but we all know what disastrous results that brought and it cannot be said to ever have been a genuine social agenda. The European social model is first and foremost a political project, not something solely handed down in directives or soft-law recommendations. So even if some of its language remains neoliberal, the pillar makes the social dimension an integral part of the European political project and commits to mainstream the social question into all of what the EU does.

To what extent the pillar will deliver on rights is a question of political will. One should not expect the EU to be the sole actor since the pillar puts much of the responsibility for action on national governments (who hold the core social competences anyway). Looking at the political landscape across Europe, I am somewhat pessimistic about the implementation of the social pillar. But the optimist would argue that we now have an instrument that we can use to hold responsible the Commission and the Member States. It provides a set of principles that they have signed up to and to which we can benchmark their policy stance.

Can we already see some effects of the pillar?

The progress regarding the revisions of some employment-related directives may not seem like much but, in comparison to the last 12-15 years, it is positive and has not been seen for a very long time. Some of the social and employment European directives go further than covering only wage earners and try to cover a wider set of people on the labour market today. The directive on work-life balance, for example, clearly mentions ‘paid leave’, which was unthinkable in the past. For some Member States it is not really ambitious, but for many others it is. The Commission has to deal with the question having little core and direct competences in the social field and facing Member States who are reluctant to deal with social questions at the EU level. The pillar has pushed the European Commission to be a little bolder on the social question than it has been during the last 15 years. What we’re seeing today is not a step back but rather a step forward. The 2018 country specific recommendations reflect the social pillar. But is the next Commission going to continue taking that work forward?

But this could be seen as piecemeal approach to social issues. In reality and in the long run, how strong and solid is the pillar?

With the right actors, ones that take ownership, the pillar can be very strong. Without actors – policymakers and institutions but also organised civil society and political parties – pushing it further, as it is not binding, it could end up rather empty. There is not going to be treaty change on the social dimension in my lifetime, so what the European level can do is to use its leverage and some of its directives to make Member States move in the right direction. Cross-border workers, work-life balance, gender equality are but a few of the topics where the EU has and can continue to bring the discussion forward. But the same word of caution stands: given the political landscape today in Europe, it is not clear whether any of this will or can happen.

On the European semester, a common take is that the EU is first and foremost an economic and monetary union.[1] I beg to differ slightly. The experience of the European semester actually shows that the Commission can have an influence even where it lacks direct power. By intervening on wages, industrial relation systems, pensions, productivity, or sustainable public finances, they have seized the opportunity provided by this pan-European process and influenced the national policy direction a lot. Often not in the right direction according to me. Incorporating the monitoring the of the social pillar could change the direction of the recommendations and hence render the European Semester more social. The other side of the coin is that this kind of EU intervention could fuel opposition to the EU. Hence using the European Semester as a way of implementing the European Pillar of Social Rights can be a double-edged sword.

Before moving on to the world of work itself, what is the European Labour Authority? What will it do?

That depends on what it will look like. The positive aspect of the announcement of its establishment is that it highlights that enforcement is taken seriously by the EU. This agency would –

But is it an authority or an agency? European Labour Authority sounds like a body that enforces labour law, where pressure and leverage can be exercised by workers.

Well it is called the European Labour Authority, but authorities can actually decide something. Up to now, the plans do not look like the basis for an authority. It might end up as an information centre where one can request information or mediation. What we really need is something that is proactive, that has databases on companies, multinationals, posting of workers, and so on, and hence be able to investigate situations that seem fraudulent and in breach of European and national legislation. Such monitoring could issue warnings and make joint inspections when labour rights are being undermined. But let’s see – discussions regarding its exact powers will only be fine-tuned in the coming months.

Are integration and harmonisation – as part of what we could call social convergence –possible in an EU with different groupings such as the Eurozone and the EU27?

Having the euro isn’t the dividing line. The whole social convergence issue is also linked to the internal market. Today, we have a high level of deep economic integration, but what happens when common standards do not go beyond product market standards? Why shouldn’t we have European social standards? At a certain moment, we’re going to have a serious problem with the legitimacy of this internal market. For example, we have a lot of health and safety directives on the European level. Now, why do we have this? One of the reasons is that it is difficult to say that we are not going to have a level playing field on health and safety and that it would be a variable for competitiveness. Wages? We don’t have the same problem. It is seen as factor for competitiveness.

If wages and social protection are variables in the race to the bottom between EU members – with low or no taxes used to make themselves attractive – then no state is going to be able to afford a welfare programme. Good social protection is expensive. In the existing logic, you enter into a vicious circle: governments have less money for social protection because they lose out on taxation and then they can’t raise the social security contributions because that’s also claimed to be damaging to competitiveness by companies.

Across the world, the extreme flexibilisation and atomisation of work renders collective action extremely difficult. How can we build collective power and fight for workers’ rights in the era of Amazon Mechanical Turk?

To really talk about Amazon Mechanical Turk, a platform that distributes work across the globe, you’ve got to ask where does labour supply and demand come from. You can only leverage policy tools when you know where the people are. This kind of virtual platform makes all workers across the globe compete with one another. It’s presented as a great leap forward because you can work wherever you want, whenever you want, and be your own boss. But it’s not true. You’re not your own boss because you’re told exactly what to do, how to do it, and when to do it. You have no way to protest because somebody else would do it instead of you and none of these platforms are actually registered as employers.

So how do you then build a collective, something akin to a class consciousness, around these virtual platforms where workers never meet and aren’t able to share their concerns? There are a lot of experiments taking place right now to fight back. Platforms like Turkopticon allow workers to rate the companies that ‘hire’ them. Fair Crowd Work collects information about crowd work, app-based work, and other ‘platform work’ from the perspective of workers and unions. It was set up by IG Metall (the German Metalworkers’ Union), the Austrian Chamber of Labour, the Austrian Trade Union Confederation, and the Swedish white-collar union Unionen.

These virtual communities of platform workers are being created to identify the collective concerns and the collective actions that could address them. This is a start to create a collective consciousness and build power. In addition, others such as the Swedish trade unions are developing ideas how to set up a body where the social partners could set standards for the industry including collective agreements. In fact, in Denmark, it is claimed that the world’s first-ever collective agreement introducing minimum standards has been concluded between a union and a platform for cleaning services in private homes.  Simultaneously trade unions are also supporting crowd workers on strike and in court cases.

As these issues are global and these businesses are world traders, institutions such as the World Trade Organization, the International Labour Organization, and the European Union need to deal with them, as well as the Global Union Federations. Ultimately these issues need to be addressed at the global level on which platforms like Amazon Mechanical Turk, Task Rabbit, and Upwork operate.

For platforms such as Uber or food delivery, it’s different and probably easier because you have people physically in the same territory in city centres. Though initially not a huge success, the strikes and protests of riders, drivers, and couriers have raised awareness and started to create a trans-European workers’ network; their associational power is in the making. In May, food-delivery riders in Bologna, together with traditional unions, have had a first success with introducing a charter, if on a voluntary basis, setting minimum standards. They have won some court victories and are pushing platforms to adapt. They want a wage-earner status but that’s going to be a very long battle. In the meantime, there seems to be the need a new ‘worker’ status in the European Union. Now, in most Member States you are more or less either self-employed or wage earner. But British law has created a new status – that of the ‘worker’ with minimum wage and basic social entitlements attached. Intermediate worker categories tend not to resolve any of the fundamental classificatory problems, however, but rather add to the confusion.

Why would a proposal around the ‘worker’ status be a good idea?

Today a lot people at work are self-employed or have a hybrid status and hence don’t constitute the core basis of wage earners upon which trade unions were founded. The constraints under which they work are those of wage-earners but they don’t have the same rights. In order to provide more protection and rights, the status of worker, if defined adequately, could probably improve some of the weird (and often vulnerable) statuses across the EU.

 

[1] The European Semester is an annual process whereby the European Commission reviews the economic performance of each EU country and makes tailored policy recommendations to national governments.

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The Struggle for Social Europe

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