The Social Summit—and beyond

Concrete commitments must follow today’s Social Summit in Porto if the promise of a social Europe is to be realised.

There could be no better place for a European social summit than Portugal. Over the last decade, Portugal has experienced the worst of a Europe with weak social commitments and yet is now in the vanguard of building a Europe with a stronger social agenda.

Austerity measures pursued in the wake of the financial crisis doubled unemployment and devastated living standards. Portugal is one of six countries where real wages still haven’t recovered: a worker in Porto, where leaders gather today, could afford to buy less with their pay in 2019 than they could in 2010.

The number of people living in poverty despite being in work has increased over the last decade and working people now receive a smaller share of Portugal’s total wealth than they did ten years ago. By any measure, austerity increased inequality.

The painful experience of Portugal has been shared by working people across Europe. But the contrast in the Europe Union’s response to the financial crisis and, now, to Covid-19 could not be greater.

Under pressure from trade unions and other progressive forces, the EU and national governments have poured resources into emergency employment and income-support measures. The EU’s restrictive fiscal rules have also been paused, to allow member states to invest in fighting the health and employment impacts of Covid-19 and in economic recovery.

Permanent shift

Now we need to turn these temporary measures into a permanent shift to a social Europe and Portugal, under the leadership of António Costa, is taking a leading role in that process.

The summit that Portugal’s prime minister has convened today will discuss the steps needed to realise the promise of the European Pillar of Social Rights, which has the potential steadily to raise economic and social standards across the continent. The summit must engender a real commitment by all EU member states to implement the social pillar’s 20 principles, including fair wages, secure employment and gender equality.

Yet it cannot undo the damage of a decade of austerity alone. The European Commission has proposed a directive on adequate minimum wages but this needs to be made significantly stronger, by introducing a threshold of decency to ensure workers can never be paid less than 60 per cent of the median wage and 50 per cent of the average wage of their country. That would result in 24 million people receiving a long-awaited pay rise in Europe, including half a million of the poorest workers in Portugal.

Another way to ensure workers finally get a fair share is to support collective bargaining over wages and working conditions. More than three million workers across the EU have lost the benefits of union-negotiated wages over the past 20 years. To reverse this trend, unions must be given the right of access to workplaces to organise workers, and companies which refuse to negotiate should have no recourse to EU funds.

Precarious work

As well as lower wages, another of the consequences of the decline of collective bargaining has been to make work more precarious. Millions of workers, most of them young people, are being denied basic rights such as the minimum wage, paid holidays, sick leave and social-security contributions.

It is a problem across Europe and requires a European solution. Delivery riders and drivers for platforms such as Deliveroo and Uber are among those who need social protection the most. Welfare systems have not kept up with changes in the economy and the most precarious workers have been left without a safety net during the Covid-19 crisis, forcing many to work while sick and raising the risk of spreading the virus. We need a European social-protection system that is fit for the future.

While the summit is going on EU member states are also drawing up their national plans to use the unprecedented €672 billion EU Recovery and Resilience Facility, to bounce back after the coronavirus crisis. The plans must invest massively in quality employment and decent social protection for all workers. To ensure recovery the EU should also reform its damaging deficit and debt rules, to avert austerity in future.

Climate change

But there’s little point discussing the future without action on climate change. Trade unions recognise there are no jobs on a dead planet and support moving as quickly as possible to decarbonise the economy in a way that is fair to the workers, industries and regions which will have to make the biggest changes. No one should be left behind without a good job and/or (re)training opportunities and without a social dialogue to manage the change.

We have learned over the last decade of austerity that the consequence of leaving people behind has been a rise in support for populists offering false hope. So it’s time for Europe’s leaders to deliver real solutions for working people in Portugal and across Europe, through a decade of solidarity. As the slogan of the Porto summit says, ‘time to deliver’.