Is Europe on its way to becoming Triple A on Social Issues?
by Ive Marx (University of Antwerp)
While poverty has gained prominence on the political agenda in many EU countries and also at the EU level, it remains as pervasive in Europe as ever. Even in the good years before the financial crisis of 2008 poverty rates hardly declined in most countries. In some countries they went up. And yet, as long ago as the early months of 2000, leaders of the European Union had proclaimed that "steps must be taken to make a decisive impact on the eradication of poverty by setting adequate targets to be agreed by the Council by the end of the year." Later that year, at the French seaside resort of Nice, they backtracked from the promise to set clear goals. But they re-iterated the need for decisive action and they agreed on the need for a social monitoring instrument to track progress. Yet, while countries started tracking progress, not much actually happened. The social inclusion indicators they had agreed on remaining as unmovable as rock. In 2010 then, all EU leaders signed an Agenda that included a clear target. Europe's leaders have set themselves the target of “lifting at least 20 million people out of the risk of poverty or social exclusion” by 2020 compared to the year 2008.
That target is not in reach. Of course, the crisis intervened. But had the crisis not happened the result would probably not have been much different. Also, one might think that the crisis created a new sense of urgency on this issue. In a way it did. Responding to criticism that the EU was too much of an economic project, EU Commission President Juncker declared in 2016 that the EU needs to be ‘Triple A’ on social issues. 2017 saw the launch of the European Pillar of Social Rights, a declaration of principles. Meanwhile it is said that the European Semester Process is being socialized. Will this be enough to make Europe Triple A on social issues?
But let us first ask: why has so little progress been made?
Why no progress?
There is a reason why it took European leaders so long to set poverty reduction targets. For a long time the assumption was that jobs would do the job. That more people in work would automatically bring down the number of people in poverty. The idea that – to use a ubiquitous political slogan - "the best protection against poverty is a job" remains the mantra in power halls right across Europe and indeed in Brussels. Unfortunately, it is more a tenet of faith than a statement of fact. There is understandable intuitive appeal to the notion that job growth reduces poverty. People with jobs are far less likely to live in poverty than people who do not have jobs. If there are more and poor people take up these jobs then surely poverty must goes down?
Unfortunately things are not as simple. Employment growth never yielded the hopes for reductions in poverty in the past. There is no reason to expect that things will turn out different this time. Remember that prior to the Great Recession job growth was strong everywhere in the EU. Few countries saw dramatic drops in poverty. In more than one instance poverty went up.
Why was that? There are two big reasons. First, many of the poor live households where no adult has a job. Such ‘jobless households’ often face severe financial hardship, including their children if there are any. In the past, employment growth never produced anywhere near commensurate drops in household jobless rates. Instead it tended to boost the number of double or multi-earner households. As a consequence, job growth has tended to result in rising living standards around and above the middle, but not in the lower segments of distribution, increasing the gap between the poor and the rest.
A second reason why more people in work do not automatically bring less poverty, is that getting a job may not be enough for a household to escape poverty. Long considered a typically American phenomenon, there is now ample evidence that the ‘working poor’ are to be found in significant numbers in every European country. There is an important overlap with child poverty. In some European countries, about half of the children growing up in poverty have at least one working parent.
What does all this mean? It means that there is no room for complacency. There are no excuses for non-action, if the goal of reducing poverty is to be taken for real. Of course, jobs remain important. People do have better chances of progressing in life when they have jobs, even if they see little immediate improvement in living standards.
That being said, while efforts to move people into jobs are crucial, the reality is also that many of them will not. That is my core message. The past has taught us that it is not the poor who benefit most from economic expansions and buoyant job markets, it is the already well-off. For that reason, mending and lifting social safety nets ought to be a bigger priority throughout Europe. Minimum income protections for people at working age have become increasingly inadequate. A small number of countries have taken extra steps to increase protection levels, but guaranteed minimum incomes still fall well short of decent levels just about everywhere. What is important: they need more encouragement from Europe. The European Semester can help.
Socializing the semester
The European Semester (ES) is an important policy process at the EU level. It is argued that it is being ‘socialized’. That is to say: whereas the focus remains on macro-economic outcomes, the monitoring now systematically includes social indicators as well.
Surveys (e.g. Zeitlin and Vanhercke, 2018; Bekker, 2016) note increased attention to social issues in Country Specific Recommendations (CSRs). They also see more impact of ‘social’ EU actors. Clearly, there have been recommendations dealing specifically with issues like minimum wages or social safety nets. But so far social considerations have not featured systematically in Country Specific Recommendations. Recommendations also remain relatively vague, mostly calling attention to issues, rather than providing detailed policy prescriptions or goals.
As I noted, social safety nets, as provided through social security and social assistance, need mending and lifting. Minimum income protection has regained prominence in Commission documents. Social Pillar Principles 11-15 state need for adequate child benefits, unemployment benefits, minimum benefits and pensions. Principle 14 states: “Everyone lacking sufficient resources has the right to adequate minimum income benefits ensuring a life in dignity at all stages of life, and effective access to enabling goods and services.”
It is positive and encouraging that EU social objectives have been integrated into the Union’s post-crisis governance architecture, notably the European Semester. But it is insufficient to monitor outcomes and aggregate ‘inputs’ (social spending), as in the Social Scoreboard today. There can only be real ‘bite’ if indicators that capture actual policy intent are fully and systematically integrated in progress monitoring, if recommendations refer to these and if there are consequences in case of non-compliance.
A strong case can be made to expand input indicators in the monitoring process, thereby allowing for a first step forward from non-binding output governance towards input governance. Adding policy indicators pertaining to minimum incomes to the Social Scoreboard will be helpful to link outcome indicators (i.e. the reduction of at-risk-of-poverty and joblessness) to policies. This stills leaves room for subsidiarity, monitoring and mutual learning but it will also make it harder for countries to circumvent or not take seriously their responsibilities in bringing about real social progress.