European Workers Struggle as Pay Fails to Keep Pace with Rising Prices: Insights from Benchmarking Working Europe 2024

April 2, 2024

The living standards of European workers have still not recovered from the cost-of-living crisis, a major new trade union report on the state of the European economy has found.

The real compensation of workers in the EU, which represents pay after inflation is taken into account, fell by 0.7% in 2023, according to Benchmarking Working Europe 2024, the European Trade Union Institute’s flagship annual report.

Workers in Hungary (-3.8%), Czechia (-3.8%), and Italy (-2.6%) faced the biggest falls in purchasing power last year. Germany (-0.9%) and France (-0.6%) were also among the 10 member states where wages failed to catch up with prices.

It represents a double dip in living standards following the historic collapse (-4.3%) in real compensation in 2022.

By contrast, companies have increased their profits in real terms over the last two years. Corporate profits were the primary driver of inflation, according to the European Central Bank.

Table 1: The ten member states where real compensation declined most in 2023

The data shows Europe needs a pay rise. That would benefit the economy as well as individual workers, with the European Commission saying last month that “growth was held back by the erosion of household purchasing power.”

The ETUC’s manifesto for the European election calls on parties to deliver a fair deal for workers by:

–  Giving more workers the benefit of collective bargaining by banning companies who refuse to negotiate wages with trade unions from receiving public contracts;

– Ending precarious work by guaranteeing legal rights to permanent contracts and banning unpaid internships;

– Redistributing wealth through fair and progressive taxation, including taxes on the excess profits which caused the cost-of-living crisis.

Commenting on the report’s findings, ETUC General Secretary Esther Lynch said:

“Trade unions have won much needed wage increases that have shielded our members from the worst of the cost-of-living crisis caused by corporate profiteering.

“But there are too many loopholes that allow companies to dodge collective bargaining with their workers. This report exposes the result of this policy failure: two years after the crisis began, workers’ purchasing power still hasn’t properly recovered.

“That is not only causing misery for millions of hardworking people and their families, but also depressing the economy and pushing us towards another recession.

“We desperately need to put more money in the pockets of ordinary people who put back into the local economy instead of letting the ultra-rich pile it up in their offshore accounts.

“Ahead of the forthcoming European elections, we will be urging our 45 million members to vote for parties who will workers have the power to demand fair pay rises.”

Source: ETUC
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