A good job for everyone: This is the goal of the European trade unions. However, unemployment and temporary or low-paid jobs are widespread. Trade union-economists has therefore developed a concept whereby large corporations would have to create new jobs and keep doing so until real full employment is achieved across Europe.

Unemployment in Europe has increased massively as a result of the financial and economic crisis of 2008. In some countries, the unemployment rate reached over 15 percent and youth unemployment even went up to 50 percent. Although these numbers have since fallen, the problems of the labour market have hardly been resolved. Nowadays, many jobs are temporary and low-paid. It doesn’t have to be this way! Unia economists have developed a new concept: The European Employment Guideline (EEG).

What is the European Employment Guideline (EEG)?

The EEG is a new political instrument that will put the onus on corporations to take action. The idea: Instead of diverting their high profits into the pockets of managers and shareholders, corporations will first have to re-invest and create jobs.

• The EU Commission would set a specific target for full employment: Unemployment would not be allowed to exceed 2 percent and everybody would have to have a good quality job.
• The Commission would set a requirement for companies with over 250 employees, defining the percentage increase in the number of jobs and personnel spending that they would have to achieve. For example, it would specify that over the next four years companies throughout Europe would have to increase the number of jobs and personnel spending by 20 percent.
• After four years, the Commission would check whether the target of max. 2 percent unemployment had already been reached. If not, the requirement would be reapplied until the target was met.
• There would be sanctions for failure to comply with the requirements.

Reduce working hours to createmore jobs

In order to fulfil the requirements of the EU Commission, large companies could, for example:

• Reduce working hours while keeping wages the same and thus share out the work across more employees (e.g. a 35-hour week instead of a 40-hour week).
• They could also invest in expansion or choose a combination of both approaches.
• Investment in (further) training also creates jobs and would contribute to compliance with the employment guideline.

The exact specifics of how corporations would implement the EEG would be defined as part of negotiations between the executive boards of the corporations and the European Works Councils.

Employment before profit

Companies would still be allowed to make a profit, but would have to play their part in achieving full employment. A third of all workers work in the large corporations of the EU. We would need around 11 million new jobs to reduce the unemployment rate to 2 percent. If these jobs were to be created solely at large companies, they would have to increase their headcounts by around 30 percent.

Switzerland would also benefit

An employment guideline only makes sense at the EU level because of the threat of companies relocating elsewhere. Switzerland is very closely integrated with Europe in terms of politics, society and the economy and has a major interest in an economically prosperous and socially harmonious European Union. If an EEG were introduced, Switzerland would quickly join of its own accord in order to prevent jobs from moving to the EU. Every tenth job in Switzerland comes from a multinational corporation with headquarters abroad. Swiss workers would therefore also benefit from an EEG.

Next steps

The idea of an employment guideline should be introduced to the European trade unions and associated organisations and parties. The aim is for this instrument to be discussed in the individual trade unions of Europe and made popular among the rank and file.