The European labour market remained resilient in 2024, with a low unemployment rate, despite slower employment growth, summarised the Commission in a new employment report published on Monday 13 October.
However, despite positive progress made over the last decade, with some sectors benefiting from significant pay rises, one in five workers is still in a low-paid job.
In 2024, salaries rose by 2.7%; they are expected to exceed pre-pandemic levels in most Member States by the end of the year. The report points out that measures such as increasing the minimum wage can help low-wage earners cope with the cost of living.
Having previously outpaced economic growth, employment growth began to align more closely with economic trends in the second half of 2024, writes the Commission.
“Aggregate figures hide cross-country differences - with countries more specialised in manufacturing experiencing a stagnation or job losses. Unlike in the past, these losses no longer bring productivity gains in manufacturing, highlighting the need for improvements in services as well”.
135,000 to 450,000 jobs potentially threatened by US tariffs. US tariffs could also have a negative impact on employment.
The overall impact of a 15% tariff increase on employment is estimated at between 135,000 and 450,000 jobs, unevenly distributed across sectors and countries.
The decline in low-wage, high-productivity jobs certainly reflects improvements in education and productivity, the report notes, but “many high- and medium-skill workers are employed in low-productivity sectors and low-wage occupations pointing to a utilisation of human capital that falls short”.
The share of low-wage earners, reflecting the proportion of employees earning two-thirds or less of a country’s median gross hourly wage, has in fact fallen in the EU, from 15.2% in 2018 to 14.7% in 2022.
But this share has increased in Belgium, Bulgaria, Greece, Luxembourg, Hungary and Romania.
Real wages in the EU, meanwhile, have generally returned to their pre-pandemic levels, “but their growth is constrained by structurally weak productivity developments”. Here again, the situation varies.
In a third of member countries, real wages are now well above pre-pandemic levels. However, in the Czech Republic, Germany, France, Italy and Finland, they have not yet recovered.
Finally, while the number of low-wage earners and people experiencing in-work poverty has fallen since the pandemic, some middle-wage earners are finding it increasingly difficult to afford certain basic goods and services. They have generally not benefited from recent increases in the minimum wage or government support measures. The situation of middle-class workers has deteriorated in most high-income Member States.
Further information: https://aeur.eu/f/ix8 (Original version in French by Solenn Paulic)