Reversing inequalities

On Monday 10 October I attended an interesting conference on ‘Work, Welfare and Inequalities in Europe’, organised by the Directorate-General for Research and Innovation of the European Commission.

One of the most inspiring sessions was on reversing inequalities, which featured representatives of the Organisation for Economic Co-operation and Development (OECD) and academics in the discussion.

Increasing inequality is a trend that has characterised our societies over the past 30 years; we have seen inequalities spreading both in countries that were traditionally more unequal, such as the United Kingdom and the United States, and in historically more equal ones, such as Germany and Sweden.

These trends pre-date the financial and economic crisis and are largely the result of policy decisions made in recent decades. Quality jobs, fair and progressive taxation and welfare systems are key to promote equal societies, demonstrated by the fact that countries with similar levels of market inequalities but more generous redistribution policies manage to achieve lower levels of inequalities in the end.

However, labour market deregulation and the spread of non-standard forms of employment, the constant tightening of benefits and cash transfer generosity and coverage and the loss of progressivity of our tax systems have undermined the effectiveness of redistribution policies, playing a major role in fueling inequalities.

The crisis further worsened this trend, but what is even more worrying is the fact that the situation has not improved since the economy started to slowly recuperate in 2010. On the contrary, data shows that we are experiencing an uneven recovery, which has allowed the highest income earners to almost entirely recover from their losses – with top wages, such as CEO pay and bankers’ bonuses quickly going back to pre-crisis levels – while the middle class and the poorest segments of our societies are still suffering the consequences of the crisis.

At a time when the political, ethical and economic negative consequences of inequalities are increasingly acknowledged, there need to be urgent and decisive actions to reverse current trends.

Fighting precariousness and promoting adequate minimum wages, investing in social services and benefits – including adequate minimum income schemes – and improving the design of tax systems to prevent tax avoidance and evasion and ensure fair and progressive taxation are effective redistribution policies.

They are also all examples of areas on which Social Platform has been advocating for a radical change of policies in recent years, with policy proposals on EU social standards, quality employment, minimum wages, minimum income and investing in services.

And we will continue to do that in the future. There is a tremendous need for fresh ideas and change in Europe, and we are committed to make this a reality.