Low Wage Work in Europe

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Tuesday, 22 April 2008 12:59

Last week, senior economist John Schmitt traveled to Amsterdam where he participated in a conference on low-wage work in Europe. The conference attracted some of the world's leading labor market economists and European policy makers who debated the meaning of the employment and wage differences between Europe and the United States.

The conference was organized to present the  findings of  research conducted over a four year period by teams in research institutions spanning five countries: the National Institute for Economic and Social Research, and the ESRC Centre on Skills, Knowledge and Organisational Performance, Oxford/Cardiff, (UK); Arhus School of Business, (Denmark); Institut for Arbeit und Qualifikation, Universitat Duisburg, (Germany); Universite de Paris-I Sorbonne-Pantheon and Paris X/Ecole Normale Superieure, (France); and the Amsterdam Institute for Advanced Labour Studies (AIAS) at the University of Amsterdam and STZ Consultancy (Netherlands).

The analysis of 200 firm-level case studies showed stable rates of low pay employment of about 10 percent in Denmark and France, the rate in the Netherlands has stabilized at over 15 percent and in the United Kingdom at over 20 percent, with rapidly growing rates in Germany, which had low-wage employment rates almost as high as the 25 percent rate in the United States. However, researchers also found that low-wage workers in the European Union are generally significantly better off than their counterparts in the United States, primarily due to the social insurance provisions in the EU, including health care. The study was carried out with generous support from the Russell Sage Foundation as part of its Future of Work research program. John will be one of the editors of a volume summarizing the cross-country results of the multi-year project.