[Translate to English:] Interview

“The Upswing isn’t Reaching Everyone”

We spoke with the authors of the Bertelsmann Stiftung’s 2016 Social Justice Index about growing opportunities for social participation in Europe and why many people are in danger of poverty despite successes on the labor market.

Mr. Schraad-Tischler and Mr. Schiller, the Bertelsmann Stiftung’s new Social Justice Index shows a slight increase in social justice in the European Union overall. Is Europe becoming more just?

Daniel Schraad-Tischler: Yes, in some areas it is. This year’s Social Justice Index shows that the level of social justice in the European Union did not continue to decline over two consecutive years. Instead, we have seen slight improvements. The negative trend of recent years really does appear to have stopped. That by itself is excellent news. However, at the same time, we also see several very problematic developments.

Which ones?

Daniel Schraad-Tischler: Social participation has returned to the levels seen before the 2008 financial crisis in just five of the 28 countries in the EU – Germany, the UK, Luxembourg, Poland and the Czech Republic. In addition, there is still a huge gap between northern Europe and southern Europe. Granted, some countries in southern Europe that were hit so hard by the crisis, such as Spain, are starting to show promising signs that they are regaining their economic footing. But when you look at the social situation, it’s still disastrous for many people, especially young people. It’s the same in Greece. In Italy, the labor market has at least gotten a little better. But overall, the difference between northern Europe and southern Europe is still huge.

Christof Schiller: There is also a big gap between the generations. Young people still tend to have poorer opportunities for participation compared to older people. Older Europeans are now at a lower risk of poverty then they were a couple of years ago, whereas young Europeans are now at a greater risk of poverty. That is very alarming. Youth unemployment has become a structural problem, especially in southern Europe. But there are also places, such as the Baltic states, that have escaped this general trend. Seniors there were at an above-average risk of poverty, and that risk has jumped again during the past year, while the youth there were at a much lower risk of poverty, and their risk has declined. We also saw another modest rise in the risk of poverty among seniors in Germany.

Daniel Schraad-Tischler: In addition, we have been seeing a rise in the risk of poverty in recent years among full-time employees in most European countries. Job creation is strong but people with full-time jobs are now at a greater risk of poverty. Growth simply isn’t reaching everyone. It shouldn’t be that way. It’s a sign that labor markets are split and that more people in the low-wage sector have been left behind in recent years. We are unable to say at this point whether this is a long-term trend because in Germany, for example, we still can’t predict the full impact of the new minimum wage. However, the movement we have observed in recent years is very alarming on its own.

Is the overall increase in opportunities for participation among EU citizens a cyclical phenomenon?

Daniel Schraad-Tischler: It’s difficult to say at this point to what extent the development we are seeing in social justice in Europe is a genuine, stable reversal in the trend or just a flash in the pan that will eventually fade as soon as the economy weakens. We are seeing modest improvements overall on European labor markets. Even if this trend were to stall, there are several reasons to believe that the level of social justice will still continue to rise. But ultimately, the economic upswing is very weak in many European countries, and it could quickly break down as a result of external shocks such as a new banking crisis.

Which European countries have the biggest problems in terms of social participation right now?

Christof Schiller: Spain is one of the biggest losers in this year’s comparison, especially because it still has not addressed the big problem of intergenerational equity. Romania and Bulgaria, on the other hand, have been doing poorly for years now. Their performance has not shown a marked declined in this year’s index; they just aren’t taking enough steps to improve.

Daniel Schraad-Tischler: The group at the top also has countries that have been in steady decline, especially on the labor market. Finland is still in second place but the situation there has gotten worse in relative terms. The country has high youth unemployment and problems with its integration policy. In particular, it has often failed at integrating refugees in the labor market. Sweden is still one of the most successful countries in the international comparison, but immigrants have significantly poorer opportunities for participation there too.

Which countries score the best in terms of opportunities for social participation?

Christof Schiller: The Nordic model is still the most successful model in Europe even though it has been shown to have some flaws recently. However, it is still far ahead of the Czech Republic, the Netherlands, Austria and Germany, which appear next in the index. It remains to be seen whether the Nordic model will continue to set the standard in Europe in the years ahead. The Nordic countries have already begun to look to Germany, especially when it comes to the labor market. Yet Germany is not taking full advantage of its potential overall. As measured by its economic strength, it should be able to better distribute gains in prosperity across German society. We should also be seeing even more progress in terms of social mobility.

How is the refugee crisis affecting the development of social justice in Europe?

Christof Schiller: There is no doubt that the subject of refugee integration has contributed to political polarization. More and more populist politicians and parties are using conflicts around distribution to their advantage. We cannot entirely predict at this point what impact the flow of refugees will have on the state of social justice in Europe. One thing is certain, though: the issue of social cohesion will become the key question affecting Europe’s future in the coming years.

What do you think the future holds for opportunities for social participation in Europe?

Daniel Schraad-Tischler: I’m more optimistic about the future than I was three years ago. Things are still dramatic in many countries, but there are justifiable signs for hope. Ireland, the Czech Republic and Poland are some of the success stories. Italy also seems to be on the right path. Matteo Renzi’s administration has introduced reforms in recent years to address the outdated labor market structures there. But that also highlights a general problem with social justice: You often have to wait 10 to 15 years to see whether specific structural reforms have a positive effect in the end. If you look at Germany, many of the most recent economic and employment successes are the result of structural reforms that began in the early 2000s. Opinions differ on Agenda 2010, but it changed structures in Germany, and it had positive effects in many areas. I would venture to say that the reforms that have been implemented in Italy will lead, especially for the younger generation, to better opportunities on that country’s labor market, which is in a terrible state right now.

Translated from the German by Douglas Fox

Daniel Schraad-Tischler is Senior Expert at Bertelsmann Stiftung, where he heads the Sustainable Governance Indicators project. He is co-author of the Bertelsmann Stiftung’s Social Justice Index 2016.

Christof Schiller works as Project Manager for the Bertelsmann Stiftung's Sustainable Governance Indicatorsproject.He is co-author of the Bertelsmann Stiftung’s Social Justice Index 2016.