Responses to the pandemic have overturned the idea that “there is no alternative” to macroeconomic policies leading to deepening inequalities.
As the European Trade Union Confederation and the European Trade Union Institute join forces to launch the 21st issue of their annual publication, Comparative analysis of Working Europe– with the evocative title “An Unequal Europe” – it is opportune to reflect on the nature of inequalities and on what the European Union in particular should do to tackle it.
The chapters of this year’s report are a powerful reminder that inequalities are not just a one-off historical incident linked to a particular crisis. There is little doubt that the pandemic has generated new forms of inequality while exacerbating others or that Covid-19 has thrived on the vulnerabilities that affect our societies. But it is also clear, and demonstrated, that inequalities are fundamentally the product of an economic model which, over the past three decades, has gradually redistributed less and less income and wealth to the lower percentiles of society while sequestering more and more at the top. In other words, inequality is a structural problem. And structural problems require structural solutions.
Over the past two years we have seen new political responses to the challenges posed by the pandemic, straying sharply from the neoclassical economic formulas that plagued the well of European integration during the decade of austerity. These include the SURE employment support program and dozens of job maintenance and income support programs that have proliferated in the EU since spring 2020. The budgetary constraints of the Stability Pact and growth policies have been temporarily suspended and certain rules on state aid and competition law relaxed. And of course, there has been an unprecedented injection of liquidity into the real economy under Next Generation EU and its domestic counterparts.
Our work suggests that, without this change of direction, the social and economic impact of the pandemic would have been catastrophic and the European project could have been fatally derailed. These national and European political responses to the Covid-19 crisis should, however, no longer be considered temporary and contingent – with an expiration date already written in pencil in the 2023 calendar – but reinterpreted as structural responses to long-standing deficiencies. of the neoliberal governance model.
Paradoxically, unequal societies are less able change management, including the change needed to address the deepest, often existential, challenges we face. While Covid-19 has disproportionately affected the most vulnerable, reluctance to vaccinate – let alone vaccine availability globally – is also deeply correlated with social and economic inequalities, hampering efforts to vaccinate the most large number possible. Likewise, our research shows that those least responsible for climate change (in Europe and beyond) are and will continue to be the most affected by it.
Our work also points to another paradox: the growing social and economic disadvantage of our time risks delaying a decisive reorientation of our production and consumption system towards a carbon neutral future. To simplify a much more sophisticated message, as climate change mitigation policies affect energy and food prices, they are likely to slow progress in energy access and disproportionately affect the poorest, who spend a higher share of their income on these goods, generating resistance and discontent.
Ten years ago it was common to justify austerity policies by suggesting – as former British Prime Minister Margaret Thatcher put it – that “there is no alternative”. But the redistributive and counter-cyclical responses to the pandemic have made it clear that an alternative exists and can be implemented successfully, when there is widespread political will to do so.
More than that, as noted in the foreword to our report and the guest editorial written by Professor Kate Pickett, there is a large and growing and cohesive body of ideas, theories and policy proposals that anticipate a stronger future. sustainable, resilient and equitable for all. A future that will require political decision-makers today to make important – and sometimes difficult – choices to ensure the well-being of our societies of tomorrow.
A new era of prosperity, shaped by a fair and sustainable distribution of economic and natural resources, decent incomes and a fair sharing of all the fruits of progress is finally within the reach of our generation.
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