ETUC report gives state of play of the world of work in Europe
‘Benchmarking working Europe’ is an annual publication by the European Trade Union Confederation and its research institute which aims to deliver an overall picture of the world of work at European level and in the different EU Member States. The report examines a range of topics including employment, youth unemployment, wage developments, social protection, worker participation, corporate social responsibility, corporate governance and social dialogue.
Since 2001, the European Trade Union Confederation (ETUC) and its research institute the European Trade Union Institute for Research, Education and Health and Safety (ETUI-REHS) have produced an annual report entitled Benchmarking working Europe. The study is usually published before the EU spring summit and the Tripartite Social Summit. In the introduction to the 2008 edition, the report sets out its aim: to establish ‘what progress – or lack of it – has taken place in selected areas of importance to trade unions and of crucial significance for a social Europe’.
Benchmarking in general is a process in which certain aspects of an organisational or political process are compared with and evaluated in relation to good or best practice. This allows for developing strategies to improve the standard of one’s own processes, thereby helping to enhance the performance of an organisation or political body.
Benchmarking was introduced into the European policy process with the open method of coordination (OMC). The latter explicitly aims to detect and then spread best practice policies among EU Member States with respect to benchmark criteria defined by the European Council. If successfully implemented, this process of learning from more successful policies in other EU Member States could lead to a greater convergence towards the main EU objectives. The annual Benchmarking working Europe report by ETUC and ETUI-REHS aims to support that process in the field of employment and social policies from the perspective of employees and their interest organisation.
Main findings of report
The 2008 report is divided into eight chapters with the first two chapters framing the material parts of the report politically and macro-economically. The remaining six chapters concentrate on the following topics:
- Europe’s youth is Europe’s future;
- wage developments;
- social protection and the social reality of Europe;
- workers’ involvement, corporate social responsibility (CSR) and corporate governance;
- European social dialogue and European labour law.
The report refers extensively to data from Eurostat, ETUI-REHS, the Organisation for Economic Co-operation and Development (OECD) and the Fourth European Working Conditions Survey of the European Foundation for the Improvement of Living and Working Conditions (Eurofound). In general, the report reveals significant differences between EU Member States in most of the topics considered – with no clear overall ranking of the Member States. Besides this broad assessment, the main results of the report are summarised below.
As part of the Lisbon Strategy, the EU has set certain goals concerning employment rates to be reached by 2010: 70% for overall employment, 60% for female employment and 50% for the employment of older people aged 55–64 years. Labour market developments have been positive in recent years and the labour market participation rates of women and older people have contributed disproportionately to the improved employment performance. Nevertheless, the employment rates in 2007 are still far from the targets set for 2010. Migrant workers and low-qualified people remain specific vulnerable groups in an increasingly segmented labour market.
The growing prevalence of non-standard employment forms in Europe during the last years – again with strong country differences – is interpreted as a result of ‘trade-offs between the labour market improvements and the quality of jobs’ (p. 33).
Despite improvements in the recent past, the unemployment rate of young people is still more than double the average unemployment rate in Europe – with great and continuing differences between EU Member States: figures range from about 5% to above 22%. About one third of young unemployed persons have experienced long-term unemployment. This may become problematic for the future competitiveness of Europe as ‘it is a well established empirical fact that unemployment in early life may permanently impair the employability of youth’ (p. 49).
Education and training systems in a considerable number of EU countries are not properly attuned to the needs of the labour markets, and well-structured transition paths into the labour market are missing.
Although they are slowly diminishing, substantial income and wage differences prevail in the EU. These represent one of the major drivers for relocation processes or the threat of them. Moreover, real wage increases have lagged behind productivity increases for some time now, ‘leading to a continuous shift of income from labour to capital’ (p. 57). Working poverty and the gender pay gap remain significant despite being on the political agenda for a number of years.
A high level of social security is regarded as being one of the central pillars of the European social model. In many European countries, the social protection systems have been under considerable strain, mainly for ideological, economic and demographic reasons. Therefore, it is worth noting that ‘the figures on social protection expenditure show us that, overall, there does not seem to be a retrenchment of social protection systems’ (p. 66).
A closer look at old-age pension and unemployment systems indicates that recent reform changes may unintentionally produce counterproductive effects. For example, changes in the unemployment system which, in general, made unemployment benefits less generous will probably lead to reduced replacement rates, while aiming to activate unemployed people to find work.
Corporate social responsibility
Benchmarking Working Europe associates CSR closely with employee representation at European level, namely European Works Councils (EWC). Referring to a recent study published by Eurofound on Codes of conduct and international framework agreements, the benchmarking report emphasises that EWC are one of the main drivers of functioning CSR strategies in European companies.
Nevertheless, ‘CSR and employee participation do not always go hand in hand’ (p. 81). In fact, a considerable number of companies still do not have an EWC; however, it must be noted that an above-average compliance rate is reported among companies which have an active CSR strategy with regard to Council Directive 94/45/EC of 22 September 1994 on the establishment of European Works Councils or procedures in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees. The suspicion arises ‘that CSR can sometimes be instrumentalised primarily as a tool of public relations rather than as an expression of true concern about social responsibility’ (p. 80).
European social dialogue
The trade union report gives a short overview of recent developments in the EU social dialogue and in the forms it takes – from consultation of the social partners under Article 138 of the EC treaty to autonomous interprofessional and European sectoral social dialogue. The study highlights that, basically, the European social dialogue works and produces good results. Nonetheless, it finds that ‘European social dialogue is under great pressure’ (p. 103), mainly due to weaknesses in the legal status of many agreements reached between the social partners, the challenges of EU enlargement, and the reluctance of the European Commission to launch new initiatives on social issues.
Despite the fact that most of the figures in the benchmarking report are already in the public domain as they rely on previously published statistics, the compilation of data and the analysis provide a useful and comprehensive picture of ‘working Europe’ from the trade union perspective.
Rainer Trinczek, Technical University Munich