Written by Marketa Pape.
|The European Youth Event will bring together thousands of young people in the European Parliament in Strasbourg, on 9 and 10 June 2023, to share ideas about the future of Europe. This introduction to one of the major topics to be discussed during the EYE event is one of 11 prepared by the Parliament’s Research Service (EPRS). It offers an overview of the main lines of EU action and policy in the area concerned, and aims to act as a starting point for discussions during the event. You can find them all on this link.|
Inequality, broadly understood as a difference in social status, wealth, or opportunity between people or groups, has always been present in our societies to some extent. However, over the past 30 years, income and wealth inequalities have increased dramatically worldwide. Tackling inequality and redistributing wealth is mainly the responsibility of national governments. The European Union is helping them to narrow the gap.
A widening gap
The benefits of economic growth have not been shared fairly, and the gap between rich and poor has widened. The causes of this growing inequality are multiple, including globalisation, technological change, taxation policy and economic crises. Inequality can take many forms: between people with different social and cultural backgrounds, or gender and generations, as well as between regions and countries. Inequalities affect our access to life opportunities, such as education, employment, a career and financial resources. When such inequalities accumulate, they can lead to social exclusion (meaning people cannot afford to take part in society). As one of the principles underpinning the EU is to provide opportunities for all without discrimination, EU policy covering education, employment and financial resources seeks to reduce inequalities by ensuring equal access to high-quality education, public goods and services, finance and entrepreneurship.
Wealth, in particular, is very unequally distributed. Even before the COVID‑19 pandemic, income inequalities were at their highest levels in 30 years in many countries – with the top 10 % of the population earning ten times more than the bottom 10 %. In the EU, every fifth person was at risk of poverty or social exclusion in 2021. The risk was higher for women, young people under 18, people with dependent children and those with disabilities. As the pandemic further increased this gap, particularly affecting young people, the need to tackle inequalities is evident.
Principles to build on
The EU has a duty to combat social exclusion and discrimination; to promote social justice, equality between women and men, and solidarity between generations; and to protect children’s rights. Based on EU-wide objectives, the EU supports and complements national policies on social inclusion and protection, to ensure everyone has decent living and working conditions. However, national governments decide social policies, education and taxation. The EU can only define minimum standards and provide guidance, coordination and funding.
The United Nations’ sustainable development goals for 2030 (especially those related to ending poverty and reducing inequalities) and the EU’s 2000 Charter of Fundamental Rights (given a status equivalent to the EU Treaties in 2009), oblige EU governments and institutions to uphold a number of social and welfare rights when implementing EU law.
The European Pillar of Social Rights has guided EU policies aiming at enhancing social justice since 2017. It sets 20 principles that include education, training and learning throughout life. They also set standards on providing equal opportunities, active support when seeking employment, social protection, wages and the right to adequate minimum income. Importantly, they set out guidance for national governments to ensure the rights of the 87 million people in the EU with a disability. All EU countries agreed to implement the guidance, with the responsibility to ensure compliance shared between EU institutions, national, regional and local authorities, social partners and civil society. An action plan sets targets to achieve by 2030. Some 78 % of 20‑64 year‑olds should be in employment, and 60% of adults participating in training. A third aim is to lift 15 million people – including 5 million children – out of poverty or social exclusion.
Changing the game
The EU helps prevent or reduce inequalities in many ways. To ensure equal opportunities from the start, it promotes access to high quality and inclusive education, including early childhood education and care, as well as to training and lifelong learning. In parallel, it seeks to return the teaching professions to their place at the heart of our education systems.
EU rules make it easier for us to work in another EU country and protect your social security rights when you move within Europe. For instance, you can work in another EU country without needing a permit and be treated the same as a national in terms of access to employment, working conditions, taxes and social advantages. EU rules coordinate national social security systems. If you fall ill or are injured anywhere in Europe and carry the European health insurance card, you are entitled to the necessary treatment.
All EU countries also have to follow agreed minimum EU standards covering health and safety at work. These ensure protection against discrimination and set rules for employing young people, part-time work and working hours. Men and women have the right to equal treatment at work, which includes maternity, paternity and parental leave. Recent rules seek to ensure that, where EU countries have established minimum wages, regular reviews reflect the rising cost of living, and that women are fairly represented on company boards. New rules are being discussed to ensure that men and women receive equal pay for equal work and that those working for digital platforms, for instance in food delivery, are treated correctly.
Recent EU developments
With the European Green Deal strategy, the EU wants to decarbonise the economy and make it more digital and inclusive. While this is expected to improve our health and wellbeing and create jobs, the transition to a greener economy also poses risks. Among these, jobs will be lost in carbon-intensive industries such as coal-burning power plants, energy will cost more and living standards could be affected. New EU funding seeks to address these concerns, but greater effort is necessary for a just transition to a less polluting economy, such as adapting school curricula to new skills and helping workers train for environmentally and economically sustainable jobs.
During the COVID-19 pandemic, many people expected the EU to act, while in fact it had little power to do so. As the crisis unfolded, EU countries agreed to EU-wide measures led by the European Commission. While not explicitly targeting inequality, the steps taken – such as the joint procurement of vaccines and the adoption of the SURE programme to protect jobs and incomes affected by the pandemic – helped lessen or prevent further inequalities between EU citizens and countries. Thanks to measures like SURE, unemployment grew less than during the 2008 economic and financial crisis, despite a much larger fall in gross domestic product (GDP). However, the pandemic increased inequalities in terms of access to quality health services and due to whether or not people could work from home.
To help national economies recover from the pandemic, the EU set up a vast recovery programme – Next Generation EU. Governments had each to prepare their national recovery and resilience plans based on a set of criteria and get EU approval. Among other things, the European Commission advised them to prioritise support for young people who wanted to study science and technology, or pursue further education and apprenticeships, as well as to offer loans and grants to young entrepreneurs. Recommended measures included offering employment to those with disabilities, or living in rural, remote or disadvantaged areas, as well as ensuring all children have access to education. To receive the funding, governments have to carry out the reforms promised and the investment outlined in their national plan.
In an EU-wide 2022 survey on fairness, inequality and inter-generational mobility, more EU citizens agreed rather than disagreed that, overall, most of the things that happen in their lives are fair and that they have equal opportunities like everyone else in their country.
Nevertheless, while much EU policy seeks to tackle income inequality, it does not address wealth inequality and wealth concentrated among a small group of people. However, the EU has made efforts to ensure greater tax transparency regarding multinational companies and to prevent tax avoidance.
Simple solutions cannot resolve inequality overnight. There is potential for the EU to do more in several areas. As we look beyond growth as the lead measure of our economies, a more equal distribution of wealth is key.
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