Europe’s social scorecard
The coronavirus has injected a new uncertainty into EU plans for a more social union.
A summit in the Portuguese city of Porto is intended to boost an EU drive to tackle social problems — but the coronavirus has cast a shadow over those efforts and threatens to undo years of progress.
The true social cost of the pandemic can’t yet be calculated. Traditional measures of economic welfare like unemployment don’t fully capture the extent of the crisis, largely because governments stepped in to protect jobs through furlough schemes and other support. When these measures are rolled back, the cost of the pandemic to the socially vulnerable will become clearer.
Here’s where the EU stands on three key measures of social progress outlined in a plan to implement the European Pillar of Social Rights, proclaimed at a summit in Gothenburg in 2017.
While jobless statistics don’t tell the full story, there are other ways to measure the pandemic’s impact on the labor market. The International Labour Organization estimates the number of working hours lost in 2020 due to unemployment, inactivity and reduced time at work translates into 255 million full-time jobs lost worldwide.
Even under the most optimistic scenario of a strong employment rebound, net job losses are forecast to continue in 2021. This is because companies are less likely to be hiring new workers, and existing furlough schemes will eventually be wound down.
In Europe, the onset of the pandemic interrupted a six-year trend of job growth. The EU’s employment rate in 2020 fell by nearly 1 percentage point from the previous year. The loss in working hours, however, was much more pronounced. In the second quarter of 2020, the number of hours worked fell sharply, and despite a substantial rebound in the second half of the year, it’s still nowhere near pre-crisis levels.
The job market’s instability has also eroded families’ savings and financial security. In the summer of 2020, one in four EU households said they couldn’t rely on savings to maintain their current standard of living if they lost their income.
As the crisis grew, EU institutions stepped into policy areas that used to be the preserve of member countries. In May 2020, the European Commission proposed SURE, a temporary mechanism to reduce the pandemic’s impact on employment. Around €94 billion has been made available to 19 countries through low-interest loans, and over €75 billion has already been disbursed to 17 of those countries.
The EU also approved its landmark €750 billion recovery package, which aims to re-engineer the European economy as it emerges from the pandemic, with a focus on green and digital transformation. EU officials insist social rights will play a key role, as they seek to ensure the transition doesn’t leave workers behind.
As Europe recovers from the pandemic, a major challenge for policymakers will be to take account of the myriad measures taken by governments, employers and trade unions to cope with the effects of the crisis — some of which are only temporary in nature and others whose long-term fate is uncertain.
Both the recovery fund and this patchwork of measures will have a big impact on whether the EU can meet its targets to become a more social union by 2030.
Arnau Busquets Guàrdia and Cornelius Hirsch contributed reporting.