EU countries split into high and low wages

EU cashAll EU countries already started reporting economic growth, which is accompanied by a sustained improvement in the labor market and the social situation, and employment has reached a record level of 235.4 million people. This is one of the conclusions of the autumn forecasts for the development of the EU economy, drafted by the European Commission.

Although there is improvement everywhere, the differences between countries are serious – between 3.1% unemployment rate in the Czech Republic and 3.8% in Germany, to 21.6% in Greece and 17.3% in Spain. The wage growth has risen – in the period between 2000 and 2016 the productivity of EU workers is growing by 14.3% and real wages by 10.2%.

The pay gap is also significant – from 4.60 EUR per hour in Bulgaria to 43.30 EUR per hour in Luxembourg. In fact, Brussels’s observation is that community countries are divided into two – those with high salaries and those with low wages. Only salaries in Cyprus, Slovenia, Italy and Spain are approaching the EU average.

Employment in the EU in the first half of 2017 is 72.2%, which means that there is still work to achieve the goal of 75%. The growth is observed in 27 countries, with only a slight decline in employment in Luxembourg.

The improving of the labor market situation also affects household incomes and this reduces the number of Europeans at risk of poverty and social exclusion. The number of people experiencing material difficulties is also a record low – 37.8 million people.

However, in many countries in the community, disposable income can not reach pre-crisis levels, with the most serious problem in Cyprus and Greece, where disposable income in 2015 is 23% and 32% lower than in 2008. In Bulgaria, Romania and Poland, income is growing at a pace above the average European level, which is somewhat related to the lower limit that these countries are starting from the rest of the EU.

According to the EC’s analysis in 2016, 9.6% of people of working age in the EU are affected by this problem. The lowest level was in 2010, when 8.3% or 32 million working Europeans were at risk of poverty. The Commission points out that employment alone is not a sufficient condition to reduce this risk and recommends non-standard forms of work.

Brussels also draws attention to equal access to the labor market for vulnerable groups – single parents, ethnic minorities, people with disabilities and others. Flexible working hours, especially for women, lead to lower pensions in the future, and this means that a more flexible work-life balance needs to be sought, the Commission notes in its analysis.