The cost of living crisis hits at a time when organised labour in Europe is historically weak. Revitalising the trade union movement and institutions of collective bargaining is the only way to protect living standards in the face of soaring inflation. Amid growing political uncertainty, trade union solidarity can also be a bulwark against a resurgent far right.
Real wages fell by as much as 19 per cent for Europe’s lowest paid in 2022, while the 4.8 per cent average drop in real minimum wages is the most significant decline this century. Meanwhile, the news is full of predictions about a contracting economy and potential job losses. The International Monetary Fund now warns that the global recession will hit Europe, while globally the World Bank has announced that the goal of eradicating extreme poverty by 2030 is now out of reach.
So far, the far right has capitalised most on the current crises. In Italy, Giorgia Meloni’s post-fascist Brothers of Italy have taken power. The promise to fight the rising cost of living was key to their victory. In Sweden, a bastion of social democracy, the Sweden Democrats – a party with roots in neo-Nazism – have joined the new right-wing government. Romania has seen far-right rallies in its capital Bucharest, and Czechia has witnessed major anti-EU and anti-NATO demonstrations. Cross-border surveys have found that many people are increasingly worried about the risk of civil unrest driven by the spiralling cost of living. In Britain, 53 per cent of respondents reported such concerns, while in Poland, the figure rose to 75 per cent.
Amid inflation and a widespread sense of abandonment, the European institutions are rushing to take steps to prevent people from falling into the arms of extremist political parties. The European Commission has pushed for a cap on energy prices and encouraged member states to introduce windfall taxes on company profits. Yet though the European apparatus is developing solutions, these are being overshadowed by the voices of right-wing radicals seeking to exploit people’s fears and prejudices.
The outlook appears grim. Despite the successes of movements such as Don’t Pay UK, which encouraged citizens not to pay energy bills and pushed Britain’s beleaguered Conservative government to offer major financial support to households hard hit by the energy crisis, people’s faith in positive change is clearly being undermined.
The legacy of past crises
The wave of austerity imposed following the 2008 financial crisis left a lasting mark that undermined many countries’ readiness to face the current crises by stripping back public services, including healthcare. In Romania, the neoliberal government closed down 67 hospitals and clinics in 2011. In Greece, the health budget was cut in half from 2009 to 2015.
Social dialogue, the process through which labour unions, employers, and governments collaborate, was another casualty. In 2011, the Romanian government restricted collective bargaining and the right to strike, disbanded the nationally enacted collective bargaining contract, and declared unions to be an obstacle to a flexible workforce. In Romania and Spain, governments implemented wage cuts at the same time as introducing legislation making workers easier to dismiss and replace. These policies followed in the footsteps of Germany, whose unions, which still retain major decision-making power, saw their influence curbed by the introduction of flexible labour laws in the early 2000s.
Since 2010, union membership rates have decreased by roughly 15 per cent across EU countries. In extreme cases such as Romania, they have fallen by more than 37 per cent. While collective bargaining coverage throughout Europe has decreased by roughly 10 per cent on average, in Romania and Greece it has declined by 60 and 55 per cent respectively. A decline in collective bargaining leads to stagnating wages, fewer labour protections, and a widening salary gap. One of the most significant results is that more people end up working minimum-wage jobs. In Romania, the number of workers on minimum wage contracts rose from 350,000 in 2011 to 1.7 million in 2020. The numbers speak for themselves in a cost of living crisis: we need collective bargaining contracts to improve living standards.
Ștefan Guga, director of the research group Syndex Romania, confirms: “Collective bargaining should have a central role, but in Romania this is no longer the case. The main debate is around the minimum wage, yet that can only get you so far. Since there is no clear mechanism to increase non-minimum-wage salaries, you end up with more people on minimum wage than ever.” Guga also warns that collective bargaining without active militancy and workers’ councils in the workplace might not lead to improvements. For example, every Romanian company that employs more than 21 workers is legally required to participate in collective bargaining, but there is no requirement for an agreement to be reached.
Dan Năstase, president of the Romanian Federation of Textile Workers, explains that it is often just legal box-ticking. “They bring one of the workers into the meeting room and pretend that they are negotiating. So they ‘engage in negotiations’, without any tangible solutions.” Guga adds how these sham collective bargaining processes are sometimes just another means to keep wages down: “When you have a collective labour agreement, you’ve got rid of the problem of someone asking for another contract.” But while there are limitations to what collective bargaining can achieve without real organising behind it, both Guga and Năstase believe that dialogue between unions and employers is the only way to achieve better working conditions and pay.
In Romania, efforts are still needed to build bridges between trade unions and the environmental movement.
The return of industrial action?
Across Europe, trade union activity markedly increased in 2022. Unions have mobilised to call for higher wages and a greater role for collective bargaining. Belgium, France, Germany, and the United Kingdom have all seen major strikes affecting sectors including transport
and energy. The European Trade Union Confederation (ETUC) – the umbrella organisation for European unions – has organised multiple demonstrations and called on national governments and international institutions to strengthen unions’ voices. In their statements, they warn against further waves of austerity and attribute the deterioration in working conditions and real wages to weak collective bargaining.
With the far right on the rise, the political benefits of re-empowering unions not just as guarantors of pay increases but also as social actors should not be ignored. In the United Kingdom, the Trades Union Congress (TUC) has organised campaigns targeting the far right’s political project and safeguarding against infiltration within the movement. Upon witnessing the catastrophic election results in Italy, ETUC president Laurent Berger declared, “European and international trade unionism was built on solidarity and progressivism. The far right is the antithesis of these values.”
Throughout history, trade unions have stood up to the ascent of the far right, ranging from the Industrial Workers of the World (IWW) fighting racists in the United States in the 1910s to the opposition of left-leaning Italian unions to fascism in the 1920s. In both cases, the unions were ultimately crushed by the power of the state. In the United States, more than one hundred IWW leaders were imprisoned under the Espionage Act of 1917, and General Secretary-Treasurer Bill Haywood fled to the Soviet Union. In Italy, Benito Mussolini used state violence and repression to break the back of trade union organising. While trade union opposition to these regimes may not have survived state repression, their stand was nevertheless a sign that a different world is possible.
This history should be a lesson for Europe as it heads into a dark period marked by economic hardship and the war in Ukraine – and made darker still by the rising far right. In such times, European governments can turn to trade unions not only as representatives of workers struggling for better living conditions but also as actors able to fight misinformation and take a stand against right-wing extremists. If, as during the last economic crisis, European governments collude with big capital once again, there may be no coming back from the current rightward drift. Giorgia Meloni’s victory, 100 years after Mussolini marched on Rome, is further reminder. Her platform managed to offer workers ambiguous promises and words of encouragement while failing to set out any tangible benefits.
Governments and political parties need to turn to unions, listen to their demands, and heed their proposals.
What would the empowerment of trade unions mean for climate and environmental policies in Europe? Trade unions have been playing an increasingly active role in discussions over a just transition. European umbrella organisations such as ETUC, the European Public Service Union, and IndustriALL support emissions reductions and recognise the implications for heavily polluting industries. However, discussions in Brussels remain distant from the realities around Europe.
In Romania, for example, efforts are still needed to build bridges between trade unions and the environmental movement. The Romanian coal mining industry was abruptly shut down in the late 1990s. The legacy of that transition is joblessness and communities wrecked by gambling and alcoholism. Across society, interest in climate change
and renewable energy is not comparable to that in western European countries. However, trade unionist Năstase believes that collective bargaining could play an important role in this process: “Collective bargaining contracts could include clauses about green transition, offering workers a just transition.”
While this proposal may seem utopian given Romania’s falling unionisation rate and the collapse of collective bargaining, it is much needed. In the absence of trade unions negotiating over potential job losses, training, and the obligation of employers to reintegrate workers, it would be every person for themselves in the transition ahead. For the environmental movement, the stakes of winning trade union support for the transition on the ground could not be greater considering the far right’s frequent rejection of climate science.
European states may be developing plans to get through this winter and the next, but the far right’s clear, aggressive politics of anger continues to gain ground. History shows that, when in power, the far right targets collective bargaining, unions, and workers’ power generally, posing a threat to living standards as well as to rights and freedoms.
Given the current political and economic turmoil, there is a risk that societies will fall into a trap of pessimism in which imagining a better future becomes impossible. Without hope for change, opportunities for trade unions and progressive political movements to make progress could be frozen entirely. To counter that direction, we need a vision of the future that offers more than slight improvements and minimum-wage increases. A few more crumbs added to the workers’ share of the pie will not be enough.
In the current crisis, governments and political parties need to turn to unions, listen to their demands, and heed their proposals on the way forward. Trade unions themselves need to return to militancy and class solidarity.
For Green parties specifically, building lasting ties with unions in the present moment is key to the long-term success of the green agenda. A just transition will not emerge from the offices of bureaucrats. It must be built from the ground up by people advocating for dignified living conditions and a better future.