A job in a sunny Mediterranean place like Portugal, would be the ultimate dream for many people working in cold wet Member States. However, they are often unaware that working in another Member State could lead to different salaries for the same job. 

Economic inequality in Europe is high and rising, resulting in the fact that Europe’s distribution of wealth is unfair. This opinion piece will explain the current unfair situation in Europe.

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Inequality in Europe is increasing due to the fact that 20% of Europeans make five times more than the bottom 20%. This unfair redistribution of wealth is the result of faster income growth in western European countries and slower than average in the east. The slow growth in wages is the most significant problem facing Europe since the financial crisis. These effects are most noticeable in low-income countries such as Romania and Portugal, but also felt in Italy and even in Germany.

Minimum wages vary throughout Europe. In order to earn more, people are moving to other Member States that offer higher salaries. Most people in Europe work in the services sector making high-end wages.For the same job in the services sector, an Estonian person makes €500 per month, while in Belgium this person could earn €1500 per month. (Seetharaman, 2018)

The hourly rate for students is yet another black page in the story of the unfair division in Europe. In Lithuania, the average hourly salary lays at 4 euros per hour, which is three times lower than the average rate across the EU. The biggest difference is the one between Luxembourg and Romania, ranging from €1.57 in Bulgaria to €11.55 per hour in Luxemburg. (Wixforth, 2018)

An emergence of economic disparities can also be seen between regions. The capital of Latvia, Riga, holds the same GDP per capita as the UK. However, four hours away from Riga, the GDP is the same as that of South Africa. 
Therefore, especially young people feel the need to leave their country. They are looking for job opportunities, including higher wages, elsewhere. When young people start to leave their country of origin, Europe will very soon become a fragmented continent.

When we compare Europe with other countries and their statistics, we tend to conclude that things are not too bad. Eurostat figures for the EU as a whole are calculated on the basis of the average of the national tariff rates, weighted by population size. This method of calculation is inaccurate and greatly undervalues the real scale of poverty and inequality, since it ignores the large differences in income between the Member States. (Dauderstädt, 2019)

Inequality, whether social or economic, is and will affect growth in countries. The unequal distribution of wealth in Europe is the result of the current political situation in Europe. In France, feelings of anxiety and insecurity sparked the yellow jackets movement and the rise of populism.

It reduces productivity and the level of competitiveness and, moreover, it does not make the labour market more efficient. Those who are unable to support their families due to low wages require public support. This withdraws available resources from the EU budget that could have been devoted to economic investments. Ultimately, it is a continuous spiral that destroys economic progress and increases the gap between rich and poor.

We can conclude that wealth in Europe is highly fragmented. The difference between wages in different Member States makes the freedom of workers a living paradox.  

Economic inequality has led to the political rise of populism in Europe. It is a serious problem, that is often underestimated in official figures. In my opinion, the European Union’s motto “Unity in diversity”, is rather contradictory. It is true that the difference in wages create diversity, but is this really the kind of diversity we want to reach? 

References

Commission, E. (2018). Income and living conditions. Opgehaald van Eurostat: https://ec.europa.eu/eurostat/web/income-and-living-conditions/overview

Dauderstädt, M. (2019, January 15). Addressing poverty and inequality in Europe. Opgehaald van Social Europe: https://www.socialeurope.eu/poverty-and-inequality-in-europe

Seetharaman, M. (2018, September 24). Europe’s Ticking Time Bomb: Wage Inequality. Opgehaald van Euronews: https://www.euronews.com/2018/06/12/europe-s-ticking-time-bomb-wage-inequality

Wixforth, S. (2018, November 20). The European Hydra: Wages And Social Dumping – Competition Law As A Way Out. Opgehaald van Social Europe: https://www.socialeurope.eu/the-european-hydra-wages-and-social-dumping-competition-law-as-a-way-out