Parliament supports far-reaching measures to combat inequality. With the EU failing to meet its 2020 target to lift 20 million citizens out of poverty, the European Parliament voted to approve MEP Özlem Demirel’s report on ‘Reducing inequalities with a special focus on in-work poverty’, sending a strong message to the Commission that the issue can no longer be put on the back burner.

The Covid-19 pandemic has plunged the EU into a social crisis, already brewing before the pandemic, due to the prevalence of precarious work, in-work poverty and weak social nets.

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The proposals developed by MEP Özlem Demirel (DIE LINKE, Germany), now supported by a majority of MEPs, call for a more central role to be given to trade unions, the strengthening of collective bargaining, adequate statutory minimum wage and recognition for platform workers.

Demirel has also called for an end to the practice of zero-hour contracts and for companies registered in tax havens to be barred from access to the Recovery Fund, among other measures to strengthen the European Pillar of Social Rights.

“The EU is one of the wealthiest regions in the world. There’s an unbelievable wealth accumulation here. Yet, one in five Europeans, some 95 million people, are threatened with poverty. Almost six percent of EU citizens endure extreme material deprivation,” Demirel said, highlighting that the pandemic has made things much worse.

“My report, now approved by the European Parliament, calls attention to the staggering levels of inequality, with a focus on in-work poverty, the fact that many workers cannot live off their salaries alone. We need Europe-wide minimum standards, strong social security systems, we need pensions and wages that guarantee dignified living.

“Big businesses are being bailed out with public funds while laying off their workers. This is unacceptable. Employees are being made redundant while shareholders are paid dividends. This practice must end.

“We need to provide job security to workers, minimum income initiatives, a child guarantee, an ambitious minimum wage initiative, recognition for platform workers and end the subordination of social rights to the whims of the market.

“I call on Commissioner Schmitt to take on board the approved proposals so that we can combat poverty and social exclusion, and build a life of dignity for all workers and people in Europe,” Demirel concluded.

Nicolas Schmit, European Commissioner for Jobs and Social Rights

Even before the crisis while unemployment was declining, income inequality did not follow the same trends. In the EU, the income of the richest 20% was five times higher than that of the poorest. This afternoon, Ms Lagarde was here to address this Parliament and when she was at the IMF she put inequality as a major challenge for our societies. Recently she said, and I quote: ‘The bittersweet reality is that despite economic growth, there are still far too many people who are left out.’ Yes, the income share of the lower 40% earners has stagnated for many years, even in periods of economic growth. Equal access to opportunities remains a challenge, especially for children from disadvantaged backgrounds, and as President von der Leyen has put it in her political guidelines, we need equality for all and equality in all of its senses.

The main social fallout of the COVID-19 crisis is still ahead of us. Unemployment can be expected to further increase and poverty and inequality are likely to follow the same path and therefore the crisis response needs to tackle inequality and poverty both in terms of policy and funding, and this has to happen now.

In this regard, adequate, sustainable, fair and inclusive social protection systems play a crucial role. They help cushion the impact of a crisis and contribute decisively to the resilience of our societies. Reinforced support is needed to address youth unemployment, as the crisis has led to an increase in the rates of young people not in employment, education and training. The crisis has plunged a great number of young people into a really dramatic situation. They are experiencing real poverty and exclusion with a detrimental psychological impact – students who have lost their jobs to pay for their studies, the young who worked in the most impacted sectors like tourism or hospitality. Those with precarious jobs were the first to be unemployed. But there are also all the young performers in creative activities – the artists, the musicians, actors – they suffer enormously having no income and often no possibility to pursue their creative activity. We have to show solidarity with these young people if we do not want again a lost generation, or worse, a desperate generation.

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