The Junker plan isn’t doing enough to combat negative effects of austerity policies on Europeans’ wages, according to new research from the European Trade Union Institute (ETUI).
The Junker plan aimed to increase investment, economic growth and create jobs, but the research underscores that these goals haven’t been reached.
The number of employed people in the EU has decreased since the 2008 financial crisis, with 180,000 fewer people in the job market in 2016 compared to eight years earlier, the institute found.
Job growth is stabilising at around 1.5% and unemployment is declining, with the number of jobless citizens currently standing at 20 million.
Young people make up the majority of the unemployed, as those with a lower level of education tend to have a tougher time breaking into the labor force. An added challenge is now integrating refugees into the mix, ETUI said.
Despite high unemployment, wages across Europe increased throughout 2016. Belgium is the only country where wages decreased–they sank there by 0.9%. Low inflation rates were the cause of rising wages.
“The European Union is emerging from the crisis that hit almost nine years ago, but only slowly, with only a little help from minor policy changes and leaving deep cleavages within and between countries,” said ETUI senior researcher Martin Myant.
“A new policy approach is urgently needed that will allow increased investment and expansionary policies in the countries that need them the most,” he added.
ETUI called for a new approach in dealing with these issues. The European Commission’s approach “of driving down wages, decentralising collective bargaining systems and restricting trade union and workers’ rights to tackle the economic and financial crisis” has failed, the institute said.
But the European Commission rejected that charge.
Commission Spokesperson Annika Breidthardt said, “The Juncker Plan is working to help boost investment, bridging the investment gap that was left in the wake of the financial crisis. The plan is a key pillar of the Commission’s economic policy, alongside the promotion of sustainable fiscal policies and structural reforms.”
Breidthardt pointed out that two years after the Commission launched the Juncker plan, the European Investment Bank (EIB) has mobilised around €178 billion in investment funds. The Commission’s goal was to mobilise a total of €315 billion by 2018 through the programme.
The Commission plans to expand the investment fund with a new cash injection, which Breidthardt said will make transactions more transparent.
But ETUI called for a more drastic overhaul of wage policy based on “appropriate minimum wages,” all-encompassing collective bargaining and strong trade unions.
“It’s time for a real recovery. Workers across Europe need a pay rise. Wages are beginning to pick up but there is a lot of catching up to do,” said Esther Lynch of the European Trade Union Confederation.
The Commission predicted in November that GDP growth will slow to 1.5% in 2017 across the EU, with employment increasing by 0.9%.