Further implementation of the European Pillar of Social Rights: minimum wage and reinforced Youth Guarantee

An international conference “Further implementation of the European Pillar of Social Rights: minimum wage and reinforced Youth Guarantee”, which took place on October 14-16, 2021, Vilnius, was organised by LPS „Solidarumas“ (Lietuvos Profesinė Sąjunga „Solidarumas“), with the support of EZA and of the European Union.

The participants welcomed the fact that the European Pillar of Social Rights (EPSR) was signed by the EU leaders in November of 2017 in Gothenburg. The EPSR is a political commitment by EU leaders and the EU institutions to meet the basic needs of the people and to ensure better consolidation and implementation of social rights. The EPSR consists of 20 principles, which are divided into three categories: equal opportunities and access to the labour market; dynamic labor markets and fair working conditions; social protection and inclusion. The principles of the EPSR include employment, social protection, education, upskilling, health, human capital, ensuring adequate funding, public procurement, energy poverty, and the like. In March of 2021, the European Commission presented an action plan for the European Pillar of Social Rights. The Action Plan identifies 67 key actions to be undertaken by the European Commission for 2021–2025. The Action Plan sets out three key targets to be achieved by 2030, i.e. increasing employment opportunities – at least 78% of the population aged 20 to 64 should be in employment by 2030; providing more people with an opportunity to study continuously – at least 60% of all adults should be participating in training every year by 2030; reducing poverty – a reduction of at least15 million in the number of people at risk of poverty or social exclusion.

Audrius Bitinas, Deputy Minister of Social Security and Labor of the Republic of Lithuania, acquainted the conference participants with the EPSR Action Plan and Lithuania's national goals (please see the attached presentation). Lithuania has committed that by 2030, at least 80.7% of the population aged 20–64 should have a job. The number of youth not in education, employment, or training (NEET) aged 15–29 should decrease from 13 to 9%. By 2030, the number of persons at risk of poverty or social exclusion should decrease by at least 142 thousand. In 2019, the number of persons at risk of poverty or social exclusion in Lithuania was 734 thousand. people, of which 120 thousand were children under the age of 16. Thus, Lithuania will have to make special efforts to reduce poverty and achieve the goals of lifelong learning.

The implementation of the European Pillar of Social Rights requires the involvement of EU countries, joint action by national governments and social partners. 76% of the Europeans who were interviewed support such ambitions, as confirmed by a special Eurobarometer survey presented to the conference participants by Aurimas Andrulis, Deputy Head of the Unit in charge of Finland, Latvia, Estonia, and Lithuania; European Commission‘s Directorate-General for Employment, Social Affairs and Inclusion.

In the presentation delivered by Mindaugas Lingė, Chairman of the Committee on Social Affairs and Labour of the Seimas (Parliament) of the Republic of Lithuania, the emphasis was made on the importance of safeguarding appropriate working conditions (please find the attached presentation). Financial (adequate remuneration, wage transparency, and proper accountability), physical (strategic program for health and safety at work, control of accidents at work), and social (promotion of collective agreements, in the case of Lithuania, ensuring decent conditions and guarantees for transport workers) human security is the key to appropriate working conditions. The speaker mentioned the Proposal for a Directive on a Decent Minimum Wage in the European Union. The Committee on Social Affairs and Labour of the Seimas of the Republic of Lithuania approved the proposal for this directive. According to the Chairman of the Committee, Lithuania is among the countries in which MMW (the monthly minimum wage) growth is one of the highest, this year – from 642 to 730 EUR. One of the main reasons for wage growth is the shortage of employees. Lithuania's biggest problem is the non-transparent and unfair remuneration of employees and workers. According to the data of the SLI (State Labour Inspectorate), in 2020, via the mechanism of labor disputes, over 9 million euros were recovered in favor of employees. From 2022, an amendment to Article 139 of the Labour Code will enter into force, stipulating that salaries, employment-related monetary amounts, daily allowances, posting expenses shall be paid into a bank account specified by the employees/workers.

The health and safety of workers have an important role to play in improving working conditions. In this context, the EU Commission announced a communication (COM(2021) 323 final) defining its strategic framework on health and safety at work 2021–2027 and focusing on "improving workers’ health and safety over the coming years in the context of the post-pandemic world, marked with green and digital transitions, economic and demographic challenges and the changing notion of a traditional workplace environment." The objectives of the Communication are as follows: to anticipate and manage the changes in the new world of work brought about by digital, digital and demographic change; to improve the prevention of accidents and occupational diseases; to improve preparedness for possible future health crises. Another important aspect of decent work is social dialogue and collective agreements. In 2020, the membership of Lithuanian trade unions was 99.3 thousand, which accounts for only 7.7 percent of all Lithuanian workers/employees. 327 collective agreements were concluded (1 national; 4 territorial, 12 branch-level, and 310 employer-level collective agreements). According to these data, collective agreements in Lithuania cover 20 percent of employees. 

Esther Lynch, Deputy Secretary-General of the European Trade Union Confederation, presented the prospects for setting the minimum wage in the EU. The speaker mentioned that in Lithuania, only 8 percent of workers are covered by collective agreements, this being one of the worst indicators. In Estonia, the coverage of collective bargaining agreements is even lower, embracing merely 6 percent of employees. A Directive on Adequate Minimum Wages would not only set out the principles for setting the amount of the MMW but would also require collective agreements to cover at least 70 percent of the employees.

Even if the coverage of collective agreements is 20 percent, it is still significantly behind the EU target, which aims at 70 percent coverage. There is a clear need to develop a culture of social dialogue in labor relations, strengthen the capacities and competencies of the social partners by creating a narrative of the social dialogue ecosystem.

The perspective of strengthening social dialogue was emphasized by Irena Segalovičienė, Chief Adviser to the President of the Republic of Lithuania. She said that "social dialogue is the basis of the welfare state" and that "there is room for strengthening social dialogue on the President's political agenda." Social dialogue is important at the national level, especially in the face of the challenges humanity has been facing in recent times, such as the pandemic. The role of the trade union as an important actor in promoting the social dialogue was influential in discussing and making decisions on mitigating the consequences of the pandemic, including downtime benefits, subsidies, additional unemployment insurance solutions, and additional health insurance guarantees. The President‘s Chief Adviser claimed that "the voice of the employees has been and is heard and respected." She also stated that it is especially important when negotiating the National Collective Agreement. The contribution of trade unions is also indicated by the budget estimate for 2022. Still, more funds should be allocated from the budget for worker/employee salaries.

The President's Chief Adviser thanked the LTU "Solidarumas" for its active role undertaken in summer, raising the issue of increasing energy prices, which was an important boost in identifying the problem. It had a ripple effect and produced a result. This shows that "trade unions think broadly and can represent a wide range of areas, this is sufficient proof that the role of trade unions is important". I. Segalovičienė pointed out that there is still room for consolidating and promoting social dialogue. The tripartite format needs to be strengthened not only at the national level but also at the municipal and sectoral levels.

One of the directions of strengthening social dialogue is to increase the role of social dialogue in political discourse.

Components of strengthening social dialogue should be integrated into national policy agendas, strategic documents, draft legislation.

In this context, the package of amendments to the Public Procurement Law signed by the President, which stipulates that at least one criterion of the employment relationship, an element related to the welfare of employees, should be applied in public procurement, is important. The government should strengthen this position by exercising its discretion.

Mandatory criteria related to social dialogue should be established for the public sector.

Sustainable financial mechanisms are needed to ensure continued support for strengthening social dialogue. So far, only European financial mechanisms are used in practice, specifically the European Social Fund. The opportunity to allocate 0.6 percent of the personal income tax to trade unions has not yet been fully exploited. Not all union members or union supporters fill out an application that can only be completed and submitted electronically.

The powers and competencies of trade unions need to be strengthened through discussions at the political level because there is a lack of understanding and knowledge in the public sector of what social dialogue is.

Another aspect is to increase the visibility of social dialogue activities and results. The public is not sufficiently informed about the work of trade unions and the ‘defended‘ positions during the negotiations.

Meetings of the Tripartite Council of the Republic of Lithuania could be broadcast publicly.

Polarisation and division  among people will not contribute to achieving the common goal

Priest Algirdas Toliatas, who took part in the round table discussion, spoke about core values, people-to-people contacts, trust, and the spirit of togetherness. We live in a world where a person is expected to be as productive as possible, to bring the best “payback” possible, to have no roots, no family. It is convenient to "have" such an employee, he may be productive, flexible, but preferably a person without roots, family, or basic values. In the end, such a person loses what is most precious to him. In the end, if only plain individualism and the pursuit of benefit remain, the common interest will also suffer, the spirit of togetherness and communion itself will suffer because we will have lost respect and trust, which are the essential pillars of humanity. In an individualized and confrontational society, where everyone thinks of themselves, we can put the word 'solidarity' aside. Without trust, solidarity is impossible. Without human solidarity, a trade union is not possible, because the goal of a trade union is to unite and organize people, to promote the spirit of togetherness and communion. Confronted and divided people will not achieve the common goal. We can talk symbolically about the Commandment " Remember the sabbath day (celebrate Sunday)" and look at Sunday, as a day of rest, from the human point of view. A Sunday symbolizes our connections, our togetherness, our ability to hear and accept each other because we are very different. Either our differences become a force and enrich us, or they polarise us. A Sunday is a time to stop and take a break. It is time to see our neighbors, our family members, God, and finally – ourselves, to calm down and find peace – this is what a celebration of Sunday should look like.

What is "not right" with the development of Lithuania's economic and social policy?

Prof. Romas Lazutka drew attention to the following principles of the European Pillar of Social Rights: equal opportunities, pay; child care and child support; social security, unemployment benefits; minimum income; old-age income and pensions; health care. Based on the figures, he emphasized the imbalance between Lithuania's economic growth and social development.

Although the monthly minimum wage (MMW) is increasing, it is still below the at-risk-of-poverty threshold per person after taxes (net). In 2019, the MMW (net) was 396 EUR, the at-risk-of-poverty threshold per person was 430 EUR. MMW (net) rose to EUR 447, at-risk-of-poverty threshold of 485 EUR, in 2021, MMW (net) rose to EUR 468 and failed to reach the at-risk-of-poverty threshold.

In terms of GDP per capita, Lithuania is approaching the average of the EU member states, but in terms of social security expenditures, Lithuania is lagging far behind the EU average and is at the bottom of EU member states, “surpassed” only by Romania and Latvia. Lithuania allocates slightly more than 12 percent to social security, which equals the amount allocated by Denmark to social security back in 1960. “The economy is growing, GDP per capita is growing, we have reached the level of economic growth achieved in Western European countries in 1990.” Unfortunately, as the economy grew, income inequality grew even at a faster pace. “Income inequality in Lithuania from 1980 to 2016 kept increasing, ”said the professor. In the last twenty years, GDP has been growing rapidly, by an average of 5.2 percent, and household income has almost doubled, which can be called the “golden age of Lithuania”. However, when a fast creation of wealth and growth was taking place, “the net income of the 10 percent of the richest members of society has been growing steadily, while the net income of the 50 percent of the population receiving the lowest income has been steadily declining”. In Lithuania, income redistribution and more generous financing of social security are still avoided.

The European Pillar of Social Rights does not address income inequality, and equal opportunities must be measured not only based on gender but also economic, social, and cultural grounds. Although there is often talk of recipients of benefits who are unwilling to work, statistics show that the coverage of social benefits is very limited and modest. Only one in ten poor people receive social benefits, and its amount is only one-fifth of the poverty threshold.

The situation of the unemployed and pensioners in Lithuania is also one of the worst in the EU. Recently, there has been talk of limiting the provision not only of social benefits but also unemployment benefits. Prof.R.Lazutka said that “limiting unemployment benefits will not solve the problem of unemployment: simply the number of vacancies is limited. At the end of the year 2020, according to Employment Service, 33 unemployed had to apply for 8 vacancies; According to Statistics Lithuania, the situation is even more complicated: 55 unemployed had to apply for 13 job vacancies. People's health and life expectancy also depend on their economic status and earned income. However, there are no data in Lithuania on how these indicators correlate. The opportunity to study for free is also more often used by the youth coming from higher economic status families. "Research shows that 5 times more persons having the highest socioeconomic status use state-funded places".

In other words, to achieve the goals of the EPSR, Lithuania should pursue a more balanced economic growth and development of social policy. The tax system should be reformed so that higher taxes are paid by those who can pay. Social support for those living in extreme poverty should be increased. The increase of MMW and old-age pensions should be accelerated.

Sister Jolita Matulaitytė,  heading the Caritas of Vilnius Archdiocese, spoke about the practical challenges facing our society during the Covid-19 pandemic. Jūratė Mekšėnienė, Deputy Chairperson of the Lithuanian Social Workers' Trade Union “Solidarumas”, provided additional information about the challenges social workers are exposed to.

A survey of the Lithuanian population conducted in March of 2021 (Spinter, source: National Network of Poverty Reduction Organizations) showed that during the pandemic, 11 percent of the respondents lacked money for food, 14.2 percent had insufficient money for housing rent, and/or utility fees, 28.8 percent suffered from a significant reduction in income during the quarantine.

The impact of digitization on employment and workers' income

Dr. Ramunė Guobaitė, a lawyer representing the Lithuanian Social Research Centre,

shared her experiences and insights on the legal framework for teleworking and provided practical examples.

Linda Romele, a representative of the Latvian Independent Trade Unions LBAS, made a presentation on the latest Eurofound survey on teleworking. The Polish experience was presented by a representative of the Polish trade union NSZZ “Solidarnosc” Tadeusz Kucharski.

Jose Antonio Moreno Diaz, a member of the European Economic and Social Committee (EESC), Workers‘ Group, presented the opinions adopted by the Committee on the European Pillar of Social Rights. The Committee has always supported the inclusion of a stronger social dimension on the European political agenda. The European Semester is designed to ensure good monitoring of the implementation of the EPSR. Strong national policies can ensure the implementation of the action plan. The pandemic did not improve the system, on the contrary, it has impacted significantly on the vulnerable groups of the population, in particular, low-income workers, migrants, and women have suffered the most. If we do not reconcile social progress with economic measures, there will be no equality. Sustainable economic growth has become imperative. Furthermore, we must put special effort into fighting poverty and social exclusion, as well as reducing disparities between countries. Among the top priorities is reducing the number of children at risk of social exclusion and poverty. Both children and adults must have access to education. Occupational safety and health is a priority. The key principle of implementing the Pillar of Social Rights is to ensure no one is left behind. Economic progress must be sustainable and compatible with social progress.  

Prof. Boguslav Gruževskis spoke about the role of social dialogue while introducing the so-called workfare model, which is a scheme under which the government of a country requires unemployed people to do community work or undergo job training in return for social-security payments, or a model of active inclusion. We are living in a time of great challenges. The world is facing crises of inequality, demography, climate, anthropogenesis. The basis of these crises is the crisis of community spirit, the so-called communitarianism. Artificial intelligence will have a fundamental impact on the labour market, possibly displacing humans shortly. As the influence of European countries in the global world diminishes, a strategy of regional globalization should be chosen, i.e. shortening production chains, developing European industry and services as well as increasing investment in human capital. In this context, Lithuania should invest more actively in production, develop local industry and agriculture, and make more efficient use of local labour resources. Economic development must be harmonious (socially responsible, both in terms of redistribution of profit and in terms of workers and nature); human capital should be used efficiently; social dialogue should be promoted;

Socially oriented use of IT and other innovations (the situation of platform workers). Back in 2008, all EU Member States adopted the European Commission's (EC) Recommendation on Active Inclusion (AI), committing themselves to implement active inclusion strategies in their countries. In 2013, the EC assessed that very little progress had been made; Workfare, or the concept of active inclusion, is the main and most appropriate alternative to the EU's welfare model. For the workfare model to work, active and effective social dialogue is essential.

Sergejus Glovackas, a representative of the International Labor Organization, and Eglė Radišauskienė, representing the Lithuanian Business Confederation, shared their insights on the changing world of work and the importance of social dialogue.

The conference participants were congratulated by Kristina Krupavičienė, President of the LTU “Solidarumas”. In her presentation, the focus was placed on the role and efforts of the European Commission to achieve a more common social policy in the European Union. She also praised the Lithuanian authorities' commitment to the European Pillar of Social Rights and the willingness to implement the Action Plan. Even though political will does exist, in practical life we are faced with a reality that does not always reflect our expectations. Trade unions should receive real political support to gain strength, improve their competencies and promote social dialogue. Workers' rights should be better protected. Wage growth should be faster because we have been facing extremely rapid growth in prices recently. Employers keep complaining about a shortage of workers, but some people cannot find a job year after year because of their age, profession in low demand, or family circumstances. Sometimes easy, short-term solutions are sought. It is believed that the labor market problems of the Lithuanian labor market will be solved by labor migrants from third countries, i.e. people who come to Lithuania and are completely dependent on the employer. As soon as their employment contract is terminated, they become illegal. Another trend is the relocation of businesses to other countries. This does not promote a long-term culture of social dialogue, collective bargaining, and agreements as well as social responsibility.

On the last day of the conference, October 16, Kristina Krupavičienė, Chairwoman of LPS “Solidarumas”, presented a report on the situation in the organization, the work done during the year, the positions represented, and the trade union activity trends.