Decent wages, decent work?

On the evening on 8th November, while Americans were going to the polls to elect Donald Trump, the British Academy held a debate at the Académie royale des Sciences, des Lettres et des Beaux-Arts in Belgium about the danger of economic polarisation between low and high-skilled workers. Bea Cantillon, Chair of the Debate and Professor of Social Policy at the University of Antwerp, said that there “is a lot of evidence that Trump and Brexit voters are low-skilled and without work.” In that case inequality of job prospects is having a profound effect on western democracy.

The first speaker, Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said that “we are giving meaning to social fairness as a political priority of this commission.” Youth unemployment across Europe is at 20 per cent. Even those who do have a job sometimes struggle on low wages. “We need to be open to new forms of work,” she said, “but also to be sure that these jobs are good jobs with decent protection.”

The reality of this is more difficult to manage than ever. “Today,” she said, “more Europeans work in casual jobs under atypical contracts. New technologies transform the way we work.” Under these changed circumstances, “how can we ensure that everyone in work will benefit?”

Duncan Gaille, Professor of Sociology at Oxford University, said the problem concerning the low-skilled was “not that they’re in poor jobs, in terms of work and conditions, but that they’re trapped: they’re locked into this kind of work.” Looking at recent EU-wide figures, he said, 57 per cent of people in managerial positions had received training in the previous 12 months; the figure for low-skilled workers was 12 per cent. In the UK, men in low-skilled jobs have a seven year shorter life expectancy than those in managerial jobs. “When people face high work pressure—which is rising for all skill levels—where people have low control over their work, they have higher risks of depression and heart disease.”

All this has a wider psychological impact as well. “Job insecurity is destructive of self-confidence and motivation needed for the low-skilled to improve their occupational position.” We shouldn’t despair though: policies can make a difference. The Nordic countries are good examples of what can be done in terns of better learning, health conditions and job security.”

Bruno Van der Linden, Director of the National Fund for Scientific Research, said that although the low-skilled have not and will not disappear, machines are rapidly replacing jobs. People often don’t like the work that they are doing, but will continue to do it because it gives them access to certain social benefits. “Life in the labour market for the low-skilled is full of shocks. So insurance is important.”

This can’t all be left to the free market. “You can’t neglect incentives on the supply side, but they are not sufficient to guarantee good jobs for the low-skilled.” He finished with two specific suggestions for dealing with the labour demand. First, the development of non-profit firms should be encouraged. Second, he said, in order to reduce unemployment, “we still need permanent reduction in employers’ social contributions that are targeted at the low end of distribution, and that needs to be complemented with careful reform to be sure that we keep a budget that is balanced with social security.”

Thiébaut Weber, Confederal Secretary, European Trade Union Confederation, started his contribution by reiterating that “inequality is very important.” The fear of being excluded, he continued, “has created a crisis of mistrust in Europe and the US. It’s a driver of populism and xenophobia.” He said he supported Thyssen in her work on employee directives. But more “concrete action” needed to be taken. Europe cannot only be seen as a “bad cop” imposing austerity, which has led to “long-term unemployment and precariousness.”

Second, we need sustainable growth, and “more investment” at the European level, particularly in “social investment.” Instead of being the “bad cop,” we “need Europe to play the role of the good cop, who says ‘OK, in the long term we will not only set the minimum wage in different EU countries, but we will also ensure wage convergence as a European project.' That should come back to the EU agenda. We also need new protections for atypical workers—for these new forms of employment where digitalisation plays a strong role.”