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Soon one in four of those working will be low paid

Soon one in four of those working in the most developed economies of the western hemisphere may be low paid and find themselves at increased risk of poverty.

EU-countries, especially Germany and the UK – the Netherlands in their wake –, seem to follow in the footsteps of the US. Here the proportion working at low wages already for quite some time is stable at around 25 percent of the working population. These low-wage jobs appear to be virtually identical across countries.

They all show higher risks for part-timers, women, immigrants, youths and are concentrated in hotels, catering and retail industries. Moreover, with some exceptions, these jobs are found to be persistently of poor quality in all the 6 countries studied.

Extensive new research on low-wage jobs was conducted in 5 EU countries and the US over the recent period. Based on 200 case studies in firms and hospitals and economic analysis of the labour market, it shows stable rates of low pay among employees in Denmark and France at around 10 percent, a UK rate recently stabilised close to 25 percent and rapidly growing rates in both Germany and the Netherlands, surpassing 20 percent already. The EU’s leading economy Germany is even at risk of exceeding the notoriously high rate of the US, especially taking into account the (growing) number of German self-employed with low earnings.

Researchers found that the low-wage workers in the EU are significantly better off than in the US, however, thanks to their social embedding through social insurance, including health care.

The research was conducted for four years by national teams from the EU-countries studied at the request of and with the generous financial support of the US-based Russell Sage Foundation as part of its Future of Work Research Program. The Foundation published their findings in a series of 5 books, one for each country. They will be officially presented at a press conference and discussed during an expert workshop on April 18 at the ARTIS Zalencentrum in Amsterdam. Nobel Laureate Robert M. Solow (Economics 1987) will highlight the importance of the studies.

The workshop will be followed by a conference where the world’s leading labour market economists and policy makers will debate the explanation of the unemployment differences between Europe and the US.

Josje Spinhoven | alfa
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