November, 2017. International press conference on wage union in Brussels. It could be a solution for Hungary and the whole Eastern-Europe.

Meeting in a conference called “Equal Pay for Equal Work”, economists, professors, experts, Members of the European Parliament and trade union leaders discussed such issues as the income gap in the EU, the problems of competitiveness, the benefits and drawbacks of labour mobility as well as how the demographic crisis affects the labour market.

The Wage Union is a common European interest

Organized in the European Parliament, the 3-panel conference was hosted by MEP Zoltán Balczó, who stated in his opening remarks that

“the elimination of wage inequalities is a common European interest”.

Noting that the single market had already levelled the prices in the EU, he said the “price union has been implemented” but the wage gap between the western and the eastern countries was still enormous. As he put it, this is what drives the westward migration of workers, which causes a “demographic loss” for the “sending countries”, leading to labour shortage, social security risks and a loss of income for the national budgets while families are torn apart and the recipient countries suffer from the consequent social tensions, too. The MEP said the only way for eliminating the wage inequalities was to improve the economic performance of the CEE countries so that their increasingly competitive enterprises could pay higher wages. He stated that the EU’s policies must promote this agenda.

Economist Péter Róna noted how strange it was that the EU did not even attempt to create the conditions for a micro-economic integration. In his view, the EU’s current institutions are unable to truly address convergence issues. In order to remedy this problem, he suggested to appoint a European Commissioner for the area. He also talked about how the EU had limited the Member States’ options of fiscal policy to address the inequalities. Referring to the Eurozone, he pointed out how unfit the common monetary policy was, considering the fact that the Eurozone countries were hardly at the same level. He criticized the EU for having convinced CEE countries that their due place was in the bottom third in terms of added value and their only competitive asset was their cheap labour. Another issue he addressed was the elimination of offshore transactions which, in his opinion, could be stopped within weeks if there was a real will to do so.

The taxation of offshore incomes could lay the financial foundations for a true integration policy.

French MP Frédéric Petit suggested that the principle of “Equal pay for equal work” could be complemented with “same living standards at the same place”. Explaining his suggestion, he said that there were big differences within each Member State and not just in the EU as a whole. He stated that labour mobility was vital for the European Union. He suggested that the EU’s promotion of labour mobility should not be aiming for a low-paid Eastern European labour force. He also emphasized it was important to talk about fairer wages rather than equal ones. He added however, that Western and Eastern Europe have converged a lot in the past 30 years.

MP Márton Gyöngyösi, the representative of the Citizens’ Committee for a European Wage Union noted that the EU had been able to create peace and prosperity among nations that used to wage wars on each other. The Union also promised stability and prosperity for CEE countries, but this promise was not kept, he said.

The CEE region’s national governments keep offering a flexible labour code and cheap labour force to attract foreign capital in their countries.

Mr Gyöngyösi informed the participants that PM Viktor Orbán, in his meetings abroad, typically suggested Hungary’s skilled and cheap labour force as the country’s key attraction for foreign corporations. Explaining that CEE countries kept trying to undercut each other in terms of cheap labour, he said it was a downward spiral that blocked the economic development of the region. As a result, many people go to work abroad.

In addition to the immigration wave into the EU, the community has to cope with an internal migration which always goes in one direction, he asserted. In Mr Gyöngyösi’s view, there would be no problem with internal migration if it was a two-way process, for example, if the highly-skilled German labour force appeared in the East, too. He noted that low wages had grave consequences: lower real incomes, lower capitalization and savings and, on the other hand, increasing dependency. The MP suggested that the EU should reform its cohesion policy. The EU’s cohesion funds should be spent on education, innovation, research & development and healthcare. He added that the EU must implement a wage union otherwise it was going to fall apart. “You can’t have a supposedly solidaristic Union as long as such social inequalities are allowed,” he concluded.

The panel discussions featured such presenters as Monika Ladmanova, the adviser of the Commissioner for Justice, Consumers and Gender, Przemyslaw Worek, the vice president of Poland’s Solidarity80 trade union, Paulo Marcos, the president of Portugal’s Union of Independent Trade Unions (USI), Zbigniew Krysiak, associate professor of the Warsaw School of Economics (SGH), Liene Dobele, Ernst and Young’s regional director of public policy in Europe, the Middle East, Africa and India, and Member of the European Parliament Tamás Meszerics.

Conference raises public awareness of social inequalities

In the press conference wrapping up the event, MEP Zoltán Balczó expressed his satisfaction that such important and current problems could be discussed in the European Parliament. Márton Gyöngyösi noted that the discussion of the wage union initiative was brought to the very place where it belongs.

Márton Gyöngyösi, Zoltán Balczó and Paulo Marcos

Talking about the lessons of the conference, the MP said

the wage union project had revealed a much more complex problem since, in addition to the East-West wage gap, the participants of the event addressed wage tensions between the North and the South as well as between men and women or countries within particular regions.

In Mr Gyöngyösi’s view however, the EU cannot be expected to determine wages. Instead, what the EU can do is to adopt measures that allow for the elimination of wage tensions, he said. He once again pointed out that the EU needed a new cohesion/integration policy. On a positive note, he mentioned European Commission President Jean-Claude Juncker’s and French President Emmanuel Macron’s raising the wage equalization issue and the fact that the Gothenburg Declaration reflected on fair wages. On the other hand, these attempts “do not address the root of the problem” because they fail to discuss the geographical differences within the EU, he asserted. Talking about the European Citizens’ Initiative for a Wage Union, he said it could trigger a substantial dialogue aiming for the successful future of the European Union as a whole.

Paulo Marcos also talked about the Wage Union Initiative and said it was in line with the spirit of the EU’s founders. “We have a common destiny, Southern Europeans face the same problems as Eastern Europeans. The brain and hand drain very much affects the southern Member States, too” he explained. Discussing the goals of the conference in Brussels, he said the public must be informed of these inequalities, and he assured the Citizens’ Initiative of his support.

Point of reference for the future

Summarizing the conclusions of the conference, economic historian, sociologist, university lecturer and moderator of the panel discussions István Teplán said the Wage Union Initiative aimed to help re-evaluate human capital because it had been devalued as a result of the economic crisis in 2008. “The current system is much more pro-capital than pro-labour,” he stated. In Mr Teplán’s opinion, the EU has realized that wages are lagging very far behind but, apart from the Wage Union Initiative, nobody has addressed the geographical differences. “We must understand that the growth based on a cheap labour model has reached its limits,” he asserted. The professor added that the education system and the infrastructure must be improved and corruption had to be eliminated. He noted that the EU should focus its efforts to accomplish these goals. Talking about the most important achievement of the conference, he said it called attention to the EU’s problems and expressed his satisfaction that “the event is going to be a point of reference for the future”.

Source: – Press release

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