According to a study by the European Trade Union Confederation (ETUC), “Labour shortages – turning away from bad jobs” the labour shortages affecting the European economy are not due so much to the famous “skills mismatch” as to the mismatch between wages and the needs of workers. As it turns out, companies that have the greatest difficulty in finding staff pay on average 9% less than companies that find workers more easily. The ETUC is once again citing the pan-European study, making an urgent appeal to the Commission on the issue of creating quality jobs. The data for Greece are revealing, as our country displays one of the largest wage “gaps” between the sectors with the greatest labour shortages and the sectors with relative staff adequacy.
The Budapest Conference
On the occasion of the new “European Competitiveness Pact”, agreed by European leaders at the recent Budapest Summit, the ETUC states that there is no way to strengthen competitiveness without strengthening the position of workers.
The “Budapest Declaration”, which is based on the Draghi Competitiveness Report, calls on the Commission “to present a comprehensive industrial strategy for competitive businesses and quality jobs”.
However, beneath the general pro-worker language in the same declaration, there are measures to deregulate labour, such as the arbitrary 25% cut in mandatory reporting requirements for employers.
Labour deregulation
Businesses are required by the EU to submit reports proving that they comply with European regulations, including on labor rights. Employers want to circumvent several of these rights, arguing that they burden them with administrative costs. Business representatives cited the directive on pay transparency between men and women as an example of an “excessive burden.”
The ETUC warns that regulations supposedly to improve the competitiveness of businesses must not lead to restrictions on labor rights and claims.
This is a particularly worrying phenomenon, which is directly linked to labor shortages, which have been a major blow to Europe’s competitiveness in recent times, the Confederation adds.
As it emphasizes, research shows that companies offering lower-quality jobs have the greatest difficulty finding staff.
Right to disconnect
For example, the lack of regulations to ensure respect for the right to disconnect costs European workers millions of euros in unpaid work. The right to disconnect concerns the freedom of workers to “turn off” their phones, computers and digital applications when they are not working and not be forced to be a “handyman” for their boss.
The ETUC calls on the European Commission to support increased investment in industries, provided that such investment is accompanied by strong social conditions to protect and create quality jobs. Public funding of enterprises should be conditional on respect for collective bargaining and the reinvestment of a fairer share of profits to increase productivity, it underlines.
What does ETUC research show about labour shortages?
To stop Europe’s damaging labour shortages, employers need to offer better-paid jobs, according to new research presented by the ETUC.
An analysis of vacancy rates and wages in 22 EU countries reveals that sectors with the worst labour shortages pay on average 9% less than sectors where it is easier to recruit.
The report was published in 2023, following a period when job vacancy rates reached record levels, causing production problems for a quarter of European businesses.
This trend has been attributed to a skills shortage, but analysis of EU data shows that low pay is one of the main factors driving labour shortages.
The comparison carried out by the ETUC research institute (ETUI) shows a clear link between low wages and high job vacancy rates.
Across the EU, sectors struggling most to find workers paid on average 9% less than those least affected by labour shortages.
In 13 of the 22 EU Member States for which data is available, the sectors where labour shortages increased the most between 2019 and 2022 also offered the lowest wages.
The largest wage gaps between sectors with the highest and lowest increase in labour shortages were found in Italy (€4.17 per hour), Luxembourg (€4.16), Germany (€3.26), the Netherlands and Greece (€2.49).
