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Inequality In The European Union (Eu)

1927 words - 8 pages

Cumulative European Union (EU) enlargements to include relatively less developed countries such as Bulgaria and Romania, along with the possibility of future EU status being granted to Turkey and Albania (EC, 2011), raises further questions about inequality in the European Union. The global recession has bought the issue of labour market models and resulting inequities back into the forefront political discourse, as government cutbacks necessitate the reappraisal of welfare states and labour market policy. This essay will analyse both differing labour market models and the EU labour market as a whole to explain why EU countries have heterogeneous inequities. Overall, within countries, differing interplay of welfare states, varieties of capitalism and employment structures has a profound effect on levels of inequality within labour markets; particularly post EU-crisis when rapid change exacerbated many inequalities. Additionally, the macro EU labour market would appear to create inequality, particularly because of the free movement of labour. It seems despite having a labour market branded as homogenous (Siničáková, 2011), Europe’s interacting varieties of capitalism and employment legislation have created a heterogeneous continent; with equally diverse inequalities.

Gosta Esping-Andersen’s 1990 book The Three Worlds of Welfare Capitalism remains a convenient starting point for examining the capacity different labour models have to create inequality. Despite criticism for being out-dated and of limited relevance given the homogenous nature of Andersen’s typologies, their intuitive coherence means they go some way in explaining patterns of inequality in the EU (Goodin, 1999).

The liberal model of welfare capitalism puts market dominance and private provision at the core of its ideology, creating inequality as unfettered markets distribute unfairly (Bator, 1958). Inequality and social stratification is high, there is a low level of de-commodification and welfare is provided on a largely means tasted basis. Whilst the UK is not conclusively a liberal regime - the US is the archetypal liberal model - it is the closet aligned in the EU area. Inequality and the resulting social problems are prevalent, with higher than average levels of unemployment, poverty and income inequity (Esping-Anderesen, 1990). In a UK context income inequality in the UK has reached its worst levels since the Second World War, two years before the Beveridge report was published (Resolution Foundation, 2012).. The liberal model is a key driver of inequality in the UK, for example the richest 1% take 10 pence of every £1 earned whereas the bottom 50% of earners take just 18p between them (Resolution Foundation, 2012). Research shows that middle-income earners in the UK have seen wages stagnate in the face of high inflation whilst the richest have increased their wealth for the last thirty years (Resolution Foundation, 2012). The residual nature of the UK’s welfare system...

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