Debate: Reducing inequalities with a special focus on in-work poverty
Date: MONDAY, 8 FEBRUARY 2021
Speaker: Nicolas Schmit
Language: EN

Ihnen meinen Dank auszusprechen, liebe Berichterstatterin, für Ihren Bericht und auch dem EMPL-Ausschuss und allen Schattenberichterstattern. Even before the crisis while unemployment was declining, income inequality did not follow the same trends. In the EU, the income of the richest 20% was five times higher than that of the poorest. This afternoon, Ms Lagarde was here to address this Parliament and when she was at the IMF she put inequality as a major challenge for our societies. Recently she said, and I quote: ‘The bittersweet reality is that despite economic growth, there are still far too many people who are left out.’ Yes, the income share of the lower 40% earners has stagnated for many years, even in periods of economic growth. Equal access to opportunities remains a challenge, especially for children from disadvantaged backgrounds, and as President von der Leyen has put it in her political guidelines, we need equality for all and equality in all of its senses. The main social fallout of the COVID-19 crisis is still ahead of us. Unemployment can be expected to further increase and poverty and inequality are likely to follow the same path and therefore the crisis response needs to tackle inequality and poverty both in terms of policy and funding, and this has to happen now. In this regard, adequate, sustainable, fair and inclusive social protection systems play a crucial role. They help cushion the impact of a crisis and contribute decisively to the resilience of our societies. Reinforced support is needed to address youth unemployment, as the crisis has led to an increase in the rates of young people not in employment, education and training. The crisis has plunged a great number of young people into a really dramatic situation. They are experiencing real poverty and exclusion with a detrimental psychological impact – students who have lost their jobs to pay for their studies, the young who worked in the most impacted sectors like tourism or hospitality. Those with precarious jobs were the first to be unemployed. But there are also all the young performers in creative activities – the artists, the musicians, actors – they suffer enormously having no income and often no possibility to pursue their creative activity. We have to show solidarity with these young people if we do not want again a lost generation, or worse, a desperate generation. Gender gaps in employment and pay were stagnating before the crisis and are now at risk of widening. Yes, women’s over-representation in lower-paid sectors and occupations, the front-line workers, made them particularly vulnerable. Closed schools and reduced services did not help balance carrying the responsibility between men and women. As rightly pointed out in the report, in-work poverty strips work of the basic purpose of providing a decent life. In-work poverty was already high on our agenda before the outbreak of the COVID-19 crisis. We saw the last recovery did not reach all workers to the same extent. And we are committed to Principle 6 of the Pillar of Social Rights, I quote: ‘In-work poverty shall be prevented.’ And this means also that we have to combat precarious work forms. Providing jobs that pay an adequate wage is essential to guarantee adequate working and living conditions for workers and their families, reduce wage inequalities and build fair and resilient economies. Minimum wages play an important role in this context – adequate minimum wages. Still too many workers are not protected by adequate minimum wages in the EU. This also contributes to higher gender pay gaps. Our proposal for a directive on adequate minimum wages is now in the hands of the co-legislators and we hope for a speedy adoption. Inspired by the principles of the European Pillar of Social Rights, our proposal is ambitious and balanced and fully respects the specificities of national systems. We need adequate minimum wages and better coverage by collective agreements. These are the best ways to combat in-work poverty and poverty at large. The fight against inequality and poverty will be an essential part of the Action Plan to implement the European Pillar of Social Rights. In December, this House adopted a comprehensive resolution on a strong social Europe for Just Transitions. This is an important contribution to the action plan and a successful Porto Summit. The Commission has already presented important initiatives in this context: adequate minimum wages and collective bargaining; the SURE instrument; the Youth Employment Support package to prevent another lost generation; skills we just debated; guidelines on seasonal workers – they are not only very much exposed to the pandemic, but they suffer also from bad working and living conditions. The fight against poverty and inequality will take centre stage. The action plan will include proposals which the European Parliament has been calling for for years, such as the Child Guarantee. The Council conclusions of 9 September 2020 invited the Commission to make a proposal on minimum income, given the number of people without income due to the crisis and it is indeed time to review the Council recommendation from 1992. We need common criteria concerning the fight against inequality, because equality cannot be won by action at EU level alone. It requires Member States, regions, local authorities, social partners and civil society to actively work on the implementation of the Pillar principles including by looking more at the distributional impacts of policies. The next Multiannual Financial Framework and the Next Generation EU can support the right policies. In the MFF, the European Social Fund+ will be entirely dedicated to employment, education and social measures. The preparation of the national Recovery and Resilience Plans provides Member States with ample opportunities to support economic and social upward convergence. It is absolutely true that rising income inequality is the defining challenge of our time, as former President Obama put it some years ago. As this crisis has even amplified this challenge, it is urgent to act. Talking of competitiveness and growth does not make much sense, as Ms Lagarde said, for people whose work does not pay, as they do not actually enjoy that prosperity to which they finally contribute. Prosperity for all has been a major promise of Europe. Let’s be up to this promise.