Labor shortage in the European Union due to low wages

Record labor shortages in the European Union (EU) are due to low wages and working conditions, not a lack of skills, according to a study released by the European Trade Union Institute on Thursday.

The study highlights that labor shortages have clearly increased more among jobs with relatively lower wages, and that they are greater in sectors and profiles that do not necessarily require higher skills.

“Educating more workers with the necessary skills to work in the industries of the future is a critical part of a socially just transition to a green economy,” but according to a study published this Wednesday, “industries in which labor shortages increased from 2019 to 2022 as a rule, worse working conditions were offered.

The results demonstrate the need to expand collective bargaining and improve wages and working conditions, as well as skills, if Europe is to end the labor shortage, the European Trade Union Confederation (ETUC) said in a statement.

Representatives of European trade unions also drew attention to the fact that in half of the EU member states real wages have declined over the past year, despite the growth of real profits.

The ETUC therefore called on the EU to make industry funding contingent on providing training and improving wages and working conditions for its workers through collective bargaining.

“Employers can’t find enough workers because they don’t offer good enough wages or working conditions,” CES Secretary General Esther Lynch said, paraphrasing US President Joe Biden as “the answer is simple: pay them more.”

Lynch said the EU “should follow the US lead in making public funding for companies conditional on a commitment to pay decent wages, fair conditions and skills to workers, and clear commitments to collective bargaining.”

“Europe must stop trying to compete on the basis of low wages and conditions and instead increase productivity by investing in highly skilled, high-tech and high-quality jobs,” he concluded.