Blog AnalysisSocial Policy

A social reversal of the Commission: really? some doubts

(BRUXELLES2) The communication published by the European Commission on April 18 for "a job-creating recovery" (download here) has often been celebrated as a turning point in what the European executive has hitherto seen as liberal policy on social matters. Something to whet my curiosity... Unfortunately I have to say, I don't have the same interpretation at all.

Can we talk about a turnaround?

The answer must be nuanced. In short, we can say that there is indeed an evolution of the European executive on employment policy, an obvious change of language as well as on certain substantive points. On the other hand, on labor law, the European executive remains quite faithful to its usual antiphon: flexibility, competitiveness, adaptation (and reduction) of wages. We cannot, here, speak of a social evolution. And those who say so are either wrong or simply haven't read the entire communication (and settled for a press release). One could even say, by detailing each of the paragraphs of this communication, that the Commission is part of a perfectly liberal line, even deepens it, by considering that it is necessary to deregulate, to make social regulations more flexible.

A few contextual elements. We must not forget that this is still only a matter of communication. That is to say, a political act. And no legislative proposals. So don't get the timing wrong; we are currently at the political discussion stage, with a few small follow-up proposals: often quicker when it comes to flexibilizing than securing. This is why this document must be looked at as a whole. Because everything is important. We must also not forget that for several years, and even more so since the start of the economic crisis, the European Commission and its Commissioner responsible for social issues, Laszlo Andor, have remained silent and inert, the proposals in the social field of the Commission being very light and few in number compared to the whole panoply of measures deployed to impose austerity and rigour. It's not because, suddenly, a document comes out (finally), sprinkled with a few scraps of social elements, that you have to shout Hosanna!

Employment policy: some ideas

It is on this point that the Commission's proposals are undoubtedly more faithful to the progressive image that has been given of them.

Hiring aid. Sometimes reticent about this kind of aid, the Commission is riding on this hobbyhorse, advocating "target hiring aid on vulnerable categories (young or long-term unemployed)".

Social contributions. Similarly, the Commission suggests avenues for a social "tax" by "redirecting levies (on labor) towards environmental taxes, taxes on consumption or property taxes". She warns, however, about "a poorly targeted reduction in the tax burden (which) could lead to a net loss". A slight inflection since the Commission, if it has always come out in favor of reducing the "charges" on work, was often evasive on the solutions to replace it. We note, however, that it does not go so far as to propose a general social contribution on all kinds of income, including capital income. It therefore only advocates environmental, consumption (VAT) or land (building, rental) taxation without affecting stock market income... it's stupid 🙂

Training, to be developed. The "security throughout working life, including from one type of status to another (transition from studies to working life, return after maternity leave, transition to self-employment or creation of one's own business , etc.), is essential if we want to provide workers with the necessary means to preserve their employability and enable successful transitions" points out the report. The Commission places particular emphasis on a few categories - young people, women, older workers - and advocates "a comprehensive package of measures, including tax incentives, access to lifelong learning through vocational guidance and training, flexible working arrangements for those who need it and safe and healthy workplaces". She also considers "capital that employers undertake to train their staff, especially their low-skilled workers and their older workers". But it does not propose any concrete solution to ensure the implementation of this recommendation as a complete financing system. One of the main snags of lifelong learning (pardon me "lifelong")...

Increase in remuneration, but no automatic index. The Communication also underlines the interest of additional remuneration schemes making it possible to "increase the net remuneration" of "low-income households". It also decides on the increase of certain remunerations - in particular for the health-social sector - without however endorsing the mechanisms of indexation which it still considers counterproductive. "Remuneration should evolve according to the competitiveness of the Member States" (and not growth or inflation, we are thus on different ratios. "We can envisage targeted increases, which help to maintain global demand , when the evolution of wages has lagged far behind the evolution of productivity.

Labor law: flexibility....

The anthem on the need for labor market flexibility continues to be repeated over and over. " The crisis has shown that internal flexibility can be a very effective way, in times of economic contraction, to preserve employment and reduce adjustment costs. says the Commission. She pays lip service to the partial unemployment measures which, if they have "often somewhat diminished productivity, (...) have retained skills, preserved jobs and maintained confidence, and their costs are generally lower than those of unemployment benefits". But she believes that the remedy has an end and advocates ... flexibility. " As the budgetary margin for financing such measures is currently less than it was two years ago, social dialogue in companies and at higher decision-making levels plays a more important role in the search for optimal solutions for internal flexibility. »

The only concession: the fight against bogus self-employed contracts" and the supervision of internship contracts.

  • "Moderate and balanced reforms of employment protection legislation are needed to address segmentation or end the abuse of atypical contracts and bogus self-employment. In general, all types of contract should open up a set of rights to workers (including pension rights) from the moment of signing the contract, in particular in terms of access to lifelong learning life and social and financial protection in the event of termination not attributable to the worker."

Minimum wage: implicit regression

The most emblematic paragraph is that on minimum wages. It can particularly sow confusion because it first describes the existing situation before going on to the recommendations (cf. underlined in the full §). And these are not very precise.

The description is quite realistic. This is not the first time they have appeared in a Commission document. We can already find it in reports already published on social inclusion, which have often gone unnoticed, in particular on the existence of the working poor. .

  • Full text (statement) “Ensuring decent and viable wages and avoiding the traps of low wages: even before the crisis, employment has not always saved people from poverty, and the rate of working poor in the Union remains above 8%. Poverty is a particular threat to temporary workers, households with low work intensity and single-parent families in which the head of the household works, especially in countries where the wage gap is large and minimum wages are low. to prevent an increase in the number of working poor and is important for ensuring the quality of decent jobs Most Member States now apply statutory, legally binding or generally enforceable minimum wages The impact of the minimum wage on supply and demand may vary significantly from one Member State to another, depending on the level set, but also from one employment policy and organization to another."

But when the Commission decides for a minimum income, it is not by presenting options. In his mind, this is a "differentiated" minimum wage. Not unique and legal. But suitable for every branch. In other words, the German solution and not the French solution (which is the one practiced in a good part of European countries). And rather a social regression. And again, she believes that the amount of minimum wage must be adjusted not to the situation of each country but "reflect changes in general economic conditions". At first glance, the sentence seems innocuous and justifiable. But nothing is mentioned about an increase. In fact, if we take the current economic situation, the adjustment may occur rather downwards, especially in countries that are undergoing a recession. It is moreover in this spirit that the sentence was phrased - after a debate which pitted Commissioners Andor and Rehn (the Commissioner for the Economy) against each other - like the Commission as a whole - did not want to be repudiated for having asked Greece to lower its minimum wage). This sentence also appears as an implicit criticism of the automatic indexation formulas. The Commission has already criticized these mechanisms on several occasions. This time, the criticism is no longer express but underlying.

    • Full text (recommendations): "Wage minimums must be able to be adjusted sufficiently, in consultation with the social partners, to reflect changes in the general economic situation. In this context, differentiated minimum wages, already applied in several Member States, can be an effective means of preserve the demand for labour."

Mutation of public employment services. The Commission advocates a change in the role of public employment agencies, advocating the development of certain functions.

  • They " must transform themselves into “transition management agencies” and henceforth assume “active” and “passive” functions in favor of sustainable transitions throughout the professional life of workers. Their task should consist, essentially, of collecting the latest data on the labor markets, of taking active and preventive measures relating to these markets and of helping with employability from the start, of providing personalized services, exploit online services and build strong partnerships, in particular with other employment services, including in other Member States. »

Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).