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Social fairness and solidarity vital to European recovery

The annual Employment and Social Developments in Europe review provides up-to-date economic analysis of employment and social trends in Europe and discusses related policy options. It is the European Commission’s analytical flagship report in the area of employment and social affairs,

The ESDE report shows that strengthening social fairness is key to overcoming the crisis. This requires putting people front and centre. To ensure resilience, solidarity and cohesion, the EU's response has to prioritise employment, reduce inequalities and ensure equal opportunities. The effective implementation of the European Pillar of Social Rights will serve as our guide.”

The review notes that the COVID-19 pandemic is having profound health, economic, employment and social effects, threatening much of the progress that the EU had achieved previously. All Member States are experiencing a greater economic shock than in 2008-2009. Economic output has contracted sharply and unemployment is on the rise. The most vulnerable persons, including Europe's youth, are hit particularly hard.

Below are the main findings from the report:

  • Adequate minimum wages and minimum income can have a beneficial effect on the social mobility of Europeans.
  • Strengthening social fairness, including through investments in people, pays off. Closing gender-related gaps brings particularly high returns, while extending working lives, and raising educational attainment also have positive effects.
  • Structural change, such as the green transition, has to be accompanied by social measures to be successful. Notably, this transition requires social investment in the form of re-skilling programmes and/or unemployment benefits. According to ESDE, this social investment could amount to €20 billion or more until 2030.
  • Short-time work schemes are protecting jobs effectively. The EU is helping Member States to provide such support through solidarity mechanisms like the instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE).
  • Social dialogue and collective bargaining influence fairness and its perception at the workplace by promoting more equitable wages, better working conditions and more inclusive labour markets.
  • More generally, to repair the damage done by COVID-19 and prepare an economy and society for a future of faster structural changes, the EU and Member States need to embrace fully the opportunities offered by the transition to a greener, digitalised economy and build inclusiveness, solidarity and resilience into the design of all policies. Ensuring a broad-based recovery is a key policy objective of our policy action, which will help strengthen social resilience in the longer run.

These findings echo the findings of our 2020 European Research Series Report ‘A Rising Tide Failing to lift all Boats’ which found that over ten years on from the financial crash, and after six years of economic growth, before the onset of Covid-19, across the European Union there were 16.8 million people unemployed, 6.65 million people long-term unemployed, and 86 million people living in poverty of whom 19 million were children. 

The report recommended a strong response based on the European Social Model to meet present challenges.  This must be focussed on protecting people across the lifecycle, young and old, men and women, those with an income and those with no incomes.

Our European Research Series has consistently shown that a more integrated social dimension across the European Union is required to ensure the European Social Model can meet the challenges of new realities.  Our 2020 report points to the need to examine alternatives and to develop a social welfare and support system that can adapt to changing realities and withstand future shocks in a post-COVID world.  At a European level this means exploring Minimum income schemes, the Living Wage, Basic Income schemes, the changing nature of work, adequate investment, access to quality services, representation and sustainability.

The findings of the latest Employment and Social Developments in Europe Report echo many of those in our most recent European Research Series Report.  These recommendations must be incorporated into the future action plan on the European Pillar of Social Rights and the European Social Model must be strengthened and enhanced to ensure the European Union can meet present and future challenges.