Declining or stagnant wages, the attitude of the European Commission and beneficial tax systems for capital lead on several levels to a weakening position not only of middle and lower class interests but also their institutionalized representatives, i.e. trade unions and progressive parties. This is why we need not only an accurate diagnosis on what is actually creating this weakened position of labour in the post- crisis era but also pan-European policy proposals which go beyond the special interests of certain countries or industrial sectors.
This paper approaches these processes from three different perspectives in order to create a better understanding of the drivers of this weakening of the middle and lower classes in Europe. It provides policy proposals for each one of the three perspectives which are aimed at increasing the position of low and middle income earners. The changing relationship between capital and labour can of course be analysed at various levels of abstraction and can focus on different concrete articulations of this relationship in different policy spheres. With this in mind, this volume does not seek to offer a comprehensive analysis of the changing nature of capital-labour relations in Europe. Rather, it seeks to advance a conceptual framework for analysis as well as new empirical material which together draw attention to three distinct areas through which capital-labour relations in Europe in the post-crisis period can be understood, analysed and critiqued. These three distinct areas are identified in the title of this paper, with its focus on distributional, institutional and political dimensions of the capital-labour relation in Europe.
The first section of the paper places the question of capital-labour relations in its structural context and provides an analysis of changes to the ‘wage share’ in Europe. It outlines how since the 1980s the wage share has declined in Europe and argues that this process is associated with distributional asymmetry and crisis. Empirically, it provides a ‘snapshot’ of the wage share across select European countries in the ‘core’ and the ‘periphery’ between 2008 and 2015. It is argued that on this measure, uneven development has intensified across Europe as a result of crisis management measures.
The second section of the paper looks at the policy responses of the European Commission in this context. It is argued that the Commission’s attitude is most fundamentally geared towards the position and perspective of capital within the economy, rather than the European economy or society as a whole. While the Commission’s position has developed somewhat over the course of the crisis, its adaptability is hindered by these fundamental assumptions.
The final section of the paper focuses on the responses of European trade unions to the contemporary conjuncture. The section advances in two steps. First it outlines the present literature on practices of European trade unions. Second, it illustrates one area – the area of financial regulation – where European trade unions can make a difference for labour relations across the European Union. The section concludes with three organisational policy proposals – in short this is common representation, policy expertise, translationary capacities – in order to improve the position of Labour in the EU.
In a final concluding section we synthesise the above arguments and outline some implications of the preceding analysis.
The three chapters – although speaking to distinct aspects of capital-labour relations in the contemporary conjuncture – can nevertheless be understood to be linked as they all contribute to answering the following two research questions:
How have capital-labour relations been reconstituted in the post-crisis period in Europe and which actors have served to institute, organise and regulate this process?
What alternative strategies might progressive political parties adopt in response to these trends?
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