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, Study: Upturn on EU's labor markets does not benefit everyone

Three years after the economic and financial crisis reached its peak in Europe, the employment rate has increased. Yet major challenges remain: 4.6 million young Europeans are without jobs, many people cannot live on what they earn despite working full time, and the risk of poverty is acute for parts of the population in several EU member states.

Things are looking up on Europe's labor markets. Considerably more people are gainfully employed compared to 2013, when the economic and financial crisis was at its worst. Yet unemployment is still higher than it was before the crisis and many young people in particular are jobless, at risk of poverty and socially excluded. The situation in Southern Europe remains especially precarious. Those are some of the findings from the 2016 Social Justice Index, which examines various aspects of social participation in the 28 EU member states.  

In 2015, almost two-thirds of EU citizens were employed (65.6 percent) – a slight improvement over the preceding two years (2014: 64.8 percent; 2013: 64.1 percent). At the same time, the unemployment rate fell to 9.6 percent (2014: 10.4 percent; 2013: 11 percent). However, considerably more Europeans are now without work than before the crisis in 2008, when unemployment stood at 7.1 percent. The same is true for the jobless rate among the young: 20.4 percent of young people in Europe are without work; in 2008, the figure was 15.6 percent.

Working, but still at risk of poverty

In addition to the high unemployment rates still found throughout the EU, our study reveals another worrying trend: More and more Europeans are at risk of poverty despite having a permanent job. In 2015, that was true of 7.8 percent of all EU citizens employed full time – compared to 7.2 percent in 2013. A number of factors are responsible for this development, including an increase in low-wage jobs and the labor market's division into regular and atypical employment. The latter includes part-time and temporary work, as well as employment opportunities that offer only marginal compensation or fixed-term work contracts.

"A full-time job must not only provide an income, it must also ensure an adequate standard of living. When more and more people cannot earn a living from the work they do, it undermines the legitimacy of our economic and social order."
Aart De Geus, Chairman and CEO of the Bertelsmann Stiftung

One EU citizen in four facing poverty

A total of 118 million people in the EU between Athens and Helsinki are still at risk of poverty and social exclusion – one out of four. Southern and Southeastern Europe have been particularly hard hit. Some 36 percent of Greeks are living near the poverty line, something that also applies to 37 percent of Romanians and 41 percent of Bulgarians.

Moreover, approximately 25 million children and young people under the age of 18 are threatened with a life of poverty and social exclusion. In Greece, Italy, Spain and Portugal, this is true of one young person in three – almost a million more than in 2008.

Many young people in Southern Europe left behind with limited prospects

Although they are their countries' future, many young adults in Southern Europe between the ages of 20 and 24 are being left behind because they are not enrolled in a vocational training program or because they have no job. In Italy, this applies to one-third of young adults. In Greece and Spain, the figures are approximately 26 percent and 22 percent, respectively – also significantly above the EU average of 17.3 percent.

Our study also reveals a growing gap between young and old: Throughout the EU, significantly more young people are affected by poverty or social exclusion than older adults (26.9 percent versus 17.4 percent). Almost one child in ten in the EU suffers from severe material deprivation, something that is true for only some 6 percent of those over 65.

"The future is becoming bleaker for many young people, which plays into the hands of burgeoning populist movements. We cannot risk having our young people withdraw from society and reject the EU out of disappointment and frustration."
Aart De Geus, Chairman and CEO of the Bertelsmann Stiftung

Germany: Top results and challenges

Thanks largely to its robust job market, Germany is doing relatively well, ranking seventh in the Social Justice Index. At 7.2 percent, its youth unemployment rate is the lowest in Europe. Yet the threat of poverty is also growing for Germans, even for the country's young. As is true of other Europeans, people in Germany lead increasingly precarious lives: The share of Germans who are at risk of poverty despite having full-time jobs rose from 5.1 percent to 7.5 percent between 2009 and 2014.

Please find the complete study and additional data on all 28 EU member states here and at www.sgi-network.org

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