On February 1, the European Union Employment Com­mittee held a three way meeting where national social partners met the European Commission and member State representatives for the first time.

National social partners still oppose regulating wages at a European level- David Casa

The idea for this ‘tripartite’ meeting was first put forward in April 2011 but was met with reluctance from national trade unions and business representatives. Their reluctance was due to the fact that they feel no government institution, in any level, should intervene in setting wages.

In addition, they based their argument on articles contained in the Treaty on the Functioning of the European Union, which limits the EU’s role regarding remuneration. In addition, it states that the EU will respect the various national systems of work, including the calculation of wages, which differ from member State to member State.

The purpose of the meeting was to hold a debate on the development of wages in the context of productivity. It also assessed the impact wage developments have on both the domestic demands and the employment situation of individual member States and its effects on the EU as a whole.

Finally, the inequality of the distribution of wages across the different income levels was discussed. The European Commission’s employment package and its survey on how wage developments have been affected by the economic crisis formed the basis of this debate.

The employment package was presented in April 2012 in response to calls by member States and Heads of State in January and March 2012 to find a solution to the ever-increasing rate of unemployment.

Unemployment across the EU reached its highest at 10.2 per cent in February 2012. The employment package sets out medium-term strategies to reach the Europe 2020 goals of smart, sustainable and inclusive jobs.

Unemployment in the eurozone area is the highest it has been since the introduction of the single currency.

To reach its 2020 target, the eurozone area needs to reach its target of increasing employment by 75 per cent.

The package identifies a number of priority areas. One such priority is the introduction of measures designed to improve job quality through decent wages, making transition pay and fighting undeclared work. It is believed that flexibility coupled with controlled wages will protect the competitiveness of companies and, thus, avoid further job losses.

The European Commission’s review of the employment and social developments outlined the important role wages play with regard to the competitiveness of firms and how this affects job creation.

It was concluded that, despite the fact that cutting wages may protect competitiveness, it does, however, reduce the domestic demand of companies. As a result, there is a real danger this would lead to job losses. Thus, in an attempt to save the competitiveness of companies, further jobs would be lost.

In addition, the gap between high and low incomes has grown. The gender pay gap has also increased. Figures from 2010 show a gap of 16.4 per cent between the income of men and women.

The data also show that where there is a high minimum wage there are also higher levels of employment for low-skilled workers. On this basis, the European Commission put forward its employment package, which aims to set a minimum wage thereby avoiding the low minimum wage trap that leads to job losses.

This debate provided national social partners with an important opportunity to have their views and reservations heard at an EU level.

Great weight was placed on the role social dialogue plays in the social elements of the Economic and Monetary Union, which has been described as one of its founding stones. Despite this, national social partners still oppose regulating wages at a European level.

They feel wages should be decided autonomously without any intervention from any government institutions, no matter at what level.

However, national social partners are not against using meetings, such as the tripartite one, as a tool for monitoring wages and gathering information on the wage developments from all EU member states.

David Casa is a Nationalist MEP.

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