Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

labour market. Movements of labour and capital after EU enlargement
have increased. Migrant workers are often hired on lower wages and
put existing wages under pressure. Since the late 1990s, new forms of
employment contract such as part-time work, self-employment and
temporary employment have spread. They helped to boost employment but
also led to more precarious employment conditions often associated with
lower wages. Also, the progressive decline in trade union membership and
collective bargaining coverage observed in most EU countries contributed
to a further polarisation of wages.
In particular, the pressure has been applied on the low skilled and low paid
at the bottom of the labour market. While mid-level incomes have more or
less remained stable over the last two decades, incomes at the lower end of
the labour market have dropped. The in-work poverty risk in the EU has
increased in all countries for which data is available (see graph on in-work
poverty). In some countries, the increase has been substantial. This has to
do with the trend towards activation of the low skilled, that previously have
not been able to find work. Social inequality is therefore strongly connected
with issues of activation, and employment of the low-skilled.
The complex interaction between minimum wages, subsidies for the lowskilled,
minimum incomes and other forms of redistribution needs to be
at the centre when considering a new social safety net for the EU. It should
focus on the reasons and dynamic of the rise of in-work poverty in Europe.
This interaction is highly country-specific and cannot be “Europeanised”
easily. But we have learned from Lisbon and the ensuing agendas and
approaches that benchmarks can serve as point of orientation for national
policymakers. In this case, the combination of high employment levels
and strong measures of activation with relatively generous forms of
redistribution through social policy should guide European policymaking.
Some of these benchmarks, such as high employment levels, are already
included in the Lisbon Strategy. Others, such as family friendly social
policy and other forms of redistribution, should be included as well.
Moreover, social partners and wage bargaining institutions as one of the
main pillars of ensuring wage and income equality should continuously
be encouraged and fostered, rather than reliance on statutory measures
of wage setting.
Minimum wages, minimum income and tax credits
– how to combat in-work poverty in Europe
Discussions about minimum wages, minimum incomes and subsidised
employment need to be placed into a context of employment effects,
Chapter 9 – Anke Hassel 135