"The theme of this year's Benchmarking Working Europe is ‘Quality jobs for sustainable competitiveness'. In reviewing recent developments in areas of strategic interest to the labour movement and of ETUI expertise, it examines whether the emerging policy agenda and the existing EU policy frameworks within which it will be implemented are likely to balance the different dimensions of sustainability, while highlighting the economic and political risks involved.

The introductory chapter focuses on industrial policy. It argues that the Covid-19 pandemic, the energy crisis, the geopolitical tensions and now the escalation of trade tensions have revealed some of the weaknesses of Europe's market-driven industrial strategy. Decades of industrial laissez-faire have trapped the EU into deep dependencies for strategic technologies and raw materials while exposing it to energy prices volatility. Recent restructuring announcements indicate that the risk of deindustrialization is real. The EU has undertaken significant policy shifts to make its industrial policy more interventionist and better aligned with its environmental and strategic objectives. The February 2023 Green Deal Industrial Plan and its twin regulations – Net Zero Industry Act and Critical Raw Materials Act – aim to support European manufacturing and reduce its dependence on imported products that are vital for achieving EU climate objectives. However, these policy shifts remain limited by a fragmented multi-level governance rooted in national reluctances to deepen political integration, as well as by the EU macroeconomic rules and competition law that impede the emergence of an ‘Entrepreneurial Europe'. Moreover, the recent resetting of the EU political agenda around deregulation and simplification makes the future of these policy shifts uncertain, even though the global context ought to incentivise the EU to enhance efforts towards building a genuine European industrial strategy.

Chapter 1 reviews developments in the macroeconomy and macroeconomic policies in Europe in 2024 and early 2025. It highlights the long-standing relatively weak investment in Europe and the over-reliance on external as opposed to domestic demand, a pattern supported by relatively weak real wage growth over the years. These developments have been linked to slow productivity growth. By reviewing developments in macroeconomic policies, the chapter illustrates how nationally financed public investment has grown only modestly in the light of the challenges faced by the EU under the new fiscal rules. It also reviews the ongoing debate on the size and nature of the post-2027 long-term EU budget and urges caution regarding reform proposals that would be at the expense of cohesion policy funding. It argues that a competitiveness agenda focusing on technological innovation in a few sectors should be matched with conditions that will encourage the wide spread of productivity gains across workers and regions, lest public discontent results in ever more anti-system voting patterns.

Chapter 2 argues that, for competitiveness to be sustainable, it must also be socially sustainable. It starts by monitoring major developments and trends in key labour market indicators, ranging from employment and unemployment rates and sectoral job shifts to patterns in non-standard employment or long-term unemployment. Increasing employment and declining unemployment rates overall are good signs for the post-pandemic recovery of the labour markets in the EU, but gender employment gaps persist, as well as worryingly high shares of long-term or youth unemployment in some Member States, representing both a social equity issue and economic inefficiency, hampering sustainable competitiveness. The chapter describes skills development and employment patterns in specific sectors, such as high-tech, knowledge-intensive or circular economy sectors, in view of their relevance for the innovation potential as well as sustainable growth, also at regional level, highlighting stark disparities across the EU. It concludes that, despite potential tension between competitiveness and social sustainability, it is possible to create a synergy between the two. Some Member States have managed to achieve high levels of knowledge-intensive employment or production capacity, while also scoring relatively well in some of the key indicators of job quality. However, this complementarity is not to be taken for granted, and disparities within and between countries persist, requiring targeted responses for which the European Pillar of Social Rights (EPSR) should serve as the social compass.

Chapter 3 illustrates that, despite volatile political and economic conditions, the negative development of real wages observed over the three preceding years was reversed in 2024, enabling workers in the EU to regain some of the purchasing power they had. Overall, however, real wages in 2024 were still below pre-pandemic levels. Substantial minimum wage increases helped not only to mitigate real wage losses for employees at the lower end of the wage scale, but also to reduce overall income inequality. An important factor contributing to the substantial minimum wage increases was the 2022 EU Directive on adequate minimum wages. In particular, the reference values laid down in this Directive guided the adjustment of minimum wages in various ways, and this contributed to structural minimum wage increases that went beyond regular adjustments. The positive impact of the Minimum Wage Directive could also be seen in the field of collective bargaining by prompting actual reforms or discussions about measures to increase collective bargaining coverage. This important supporting role of the Directive in promoting social cohesion and combating in-work poverty – two of the central pillars of the EU as a social market economy – is now under threat as a result of the above-mentioned case pending before the Court of Justice of the EU. This would have far-reaching implications for the legitimacy of the EU and for the further development of ‘Social Europe'. Nevertheless, just over two years ago, 24 governments voted in favour of the Directive and, in so doing, made a political commitment to strive for adequate minimum wages and effective collective bargaining. Irrespective of the decision of the CJEU, they have the option of incorporating the most important provisions of the Directive into national legislation, as many EU Member States have already done.

Chapter 4 focuses on preventing and eliminating work-related psychosocial risks (PSRs), not only as a means of protecting workers, but also as a strategic foundation for strengthening the EU's economic resilience. This aligns with the European Commission's political vision for 2024-2029, which emphasises that sustainable competitiveness cannot be achieved without prioritising worker wellbeing. Using survey data, the chapter identifies key PSRs – such as high workloads, job insecurity, long hours and poor workplace relationships – and reveals how they are unequally distributed across countries, sectors and groups; they particularly affect women, older workers and those in precarious or low-skilled employment. Furthermore, the chapter critically examines how digitalisation, while often framed as a pathway to efficiency, can worsen PSRs through increased surveillance, loss of autonomy and constant connectivity – especially for gig and platform workers. The chapter underscores the staggering economic toll of PSRs – costing the EU billions each year in stress-related illnesses such as depression and cardiovascular disease – making it clear that proactive measures are not only a social issue, but also an economic imperative. As a roadmap for the new European Commission, the chapter calls for the adoption of a dedicated European directive on PSRs and urges collaboration between governments, employers, unions and health services in order to design and implement preventive strategies. Key actions include mandatory psychosocial risk assessments and limits on exploitative digital practices.

Chapter 5 reflects on concerns that decarbonisation policies could jeopardise industrial jobs and further entrench deindustrialisation. It shows that this is not necessarily the case, although the dynamics of employment growth in key clean energy sectors are still subdued and, in qualitative terms, emerging green jobs are often precarious. As regards the deployment of clean energy capacities, the EU is lagging behind its own 2030 REPowerEU targets owing to a lack of investment and vertical integration of its manufacturing value chains. Serious vulnerabilities have also been identified in the automotive sector that is now under mounting competitive pressure, in particular in electric vehicle and battery manufacturing. The chapter also looks at the electricity price for both industry and households, revealing a number of trade-offs between industrial competitiveness and social justice. The substantial concern raised by the chapter is that, although EU policymakers recognise that there is a huge gap to match the investment needs defined by EU climate policy objectives, there is not much hope that more fiscal space might be granted in an attempt to close it. Under these circumstances, a strengthened focus on competitiveness and industrial policy might turn into a labour market flexibilisation and deregulation agenda. This would not only jeopardise the prospect of strengthening the social dimension of the European Green Deal, but also further aggravate existing inequalities and undermine labour standards. The chapter stresses the importance of setting up a Just Transition Framework Directive that imposes obligations on Member States and employers to plan proactively for a just transition and anticipate and manage change. Another much-needed step is a revision of the 2022 Guidelines on State aid for climate, environmental protection and energy (CEEAG) and public procurement rules to ensure that these include social/labour and environmental conditionalities.

Chapter 6 analyses recent developments in social dialogue, corporate sustainability reporting, board-level employee representation and trade union involvement in the context of the EU's competitiveness and industrial policy agenda. It highlights significant challenges to social dialogue, noting that expectations set during the first von der Leyen European Commission have led to disappointment, as neither tripartite nor autonomous discussions have yielded fruitful results. An analysis from 1995 to December 2024 shows a decline in reciprocal commitments and how employers increasingly prefer non-binding declarations over binding agreements. In terms of sustainability reporting, a textual analysis of the national transpositions of the Corporate Sustainability Reporting Directive (CSRD) shows a lack of clarity on how information and consultation with worker representatives should be implemented at the company level. The CSRD amendments proposed by the European Commission in February 2025, in line with regulatory simplification attempts, may further weaken worker participation rights in this and other corporate law directives. An overview of board-level employee representation is also concerning, as recent CJEU case law has questioned the effectiveness of the protections and safeguards of the European Companies (SE) Directive on pre-existing national participation rights, while country-level efforts to sustain worker participation in public agendas or social policy face numerous obstacles. The chapter argues that a stronger and well-articulated framework for democracy at work could enhance job quality and foster a fairer society.

Research is a vital foundation for building effective trade union action. The Benchmarking Working Europe report plays a vital role in strengthening European social dialogue by providing the facts, data and analysis on which trade unions, employers and policymakers can engage constructively. It helps us understand the lived experiences of workers, particularly those in vulnerable and precarious positions, and informs negotiations that deliver real improvements in working conditions.

It also gives voice to those too often unheard and allows us to challenge narratives that ignore the social costs of deregulation, austerity and exploitation. Importantly, it equips us with the data and insight needed to negotiate and advocate effectively – whether at the workplace, national or EU level. Each year, the ETUI Benchmarking report puts knowledge at the service of justice, solidarity and democracy in the world of work. "

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ISBN (PDF) : 978-2-87452-766-1

Legal deposit : D/2025/10.574/19