The 'equality economy': tackling labour-market insecurity in Europe

While since '9/11' a militarised conception of security has dominated the world, the global economic crisis has seen insecurity in the labour market mushroom. Marking international workers' day, could Europe lead the way to a more secure 'equality economy'?

Michaël Privot
30 April 2014
Workers marching on May Day in Zurich

'Work, wages and pensions, not profit and greed': a May Day march in Zurich. Flickr / Michal Jaskolski. Some rights reserved.Equality and non-discrimination tend to be perceived as a pinnacle of civilisation—yet thus also as the utmost luxury which only well-off economies, which can over-fulfil the basic needs of their customer-citizens, could afford. No wonder the post-'9/11'security agenda and the unending crisis plaguing western economies have given a severe blow to all attempts to reduce inequalities in European societies: equality would be antipathetic to economic recovery, it is said. Nor does it come as a surprise that the decline of the equality agenda in Europe since 2001 has seen collateral damage in a massive dismantlement of social services and the welfare state.

Those who would soft-pedal on addressing inequality recurrently invoke two main arguments:

a) cost:

• Measuring (in)equality generates too much red tape for employers, diverting resources from investment in research and production while inflating costs, to the detriment of European companies’ competitiveness on global markets.

• Implementing equality measures—ensuring accessibility for disabled persons, for instance—itself imposes a heavy cost on companies, reducing their profit margins and so impeding their capacities for investment and resilience.

b) ideology:

• Equality and anti-discrimination contradict the ‘freedom’ of the enterprise, as executives would not be free to hire and do business with whomsoever they wish, as best fits their company profile. This would threaten to bring the economy to a standstill, as entrepreneurs and holders of capital left Europe for other regions.

• Inequality is not systemic but is anyway the result of the failure of individuals to be resilient, to succeed and to make their dreams come true in a Brave New World of opportunity for all. In this equality-blind, social Darwinist race, may the best white, middle-aged man win!

Although the supporters of such arguments are still very powerful and vocal—to the extent of blocking since 2008 any improvement to equality legislation at European and national levels—a few voices, within and without the business community, have been raising interesting alternative perspectives:

1)      Diversity (as a prelude to equality) is good for business: a diverse company is more resilient and amenable to change than a homogenous one. Studies from Europe, north America and Australia demonstrate that companies committed to diversity produce happier, more productive and more loyal workers. Diversity stimulates attraction and retention of staff. When employees feel they are working in a diverse and inclusive environment, their work attendance and innovativeness improve. Moreover, diversity enhances company reputation and customer satisfaction.

2)      Excluding able individuals signifies a huge loss of talent and skill when the economy needs to harness all potential creativity to get out of the rut. A 2012 talent shortage survey found that around one in three employers around the world found it difficult to fill vacancies. Talent is all over the place yet is often wasted due to discrimination on grounds of ethnicity, migration background and nationality, and associated non-recognition of qualifications.

Despite these voices, major business federations and most companies persist in using the ‘red tape’ argument to press governments not to take any measure that might impede their capacity to discriminate, more or less smartly. Even in the very few discrimination cases that manage to make their way to the courtrooms, penalties remain ridiculously low, without any deterrent effect on (potential) perpetrators.

The implicit underpinning of this argument is that the engine of the neo-liberal system that has imposed itself over the last quarter of a century is precisely widespread discrimination and generalised inequality—inequalities of class and geographical location, of education and status, of gender and ethnicity, inequalities of power… Very recently, some entrepreneurs have been cynical enough not only to admit but proudly to claim that discrimination makes perfect business sense and should be acknowledged as such. From this perspective, removing or at least substantially reducing inequalities would bring this very profitable system (for a few) to collapse. Hence the all-out battle waged for the easement or repudiation of equality measures, including through the use of such biased arguments as ‘adversity makes people stronger’ to disqualify the majority who simply can’t bear the heavy burden placed on their shoulders.

Diversity clearly benefits companies in the long run: while difficult to measure, a few companies have demonstrated returns of up to hundreds of per cent on investment in diversity policies at the workplace, as in the famous Nextel case. Yet this argument fails to embrace the full potential of equality as a catalyst for employment and wealth at the core of the smart, inclusive and sustainable growth project envisaged in the Europe 2020 strategy.

Arguably, the 'equality economy'—a sector focused on making equality of outcomes a reality for all members of society—has the potential to generate even more wealth and well-being than the green economy lauded from all sides, given the evidence of the huge damage inequality wreaks in terms of a range of social pathologies. While egalitarian measures increasing the well-being of the majority inevitably imply expenditures, these should be seen as investments rather than costs. They increase output and specialisation, develop at large scale new types of jobs and expertise, meet new needs for high-quality training and learning, level up work conditions and salary scales and, overall, they contribute to economic regeneration. In that regard, the experience of Nordic countries in recognising the added value of strong social policies as an intrinsic productive factor offers precious insight on how 'big state' social models can generate high competitiveness and development profitable to the whole society.

This sector is already out there but at an embryonic stage, not properly articulated and under-explored. It will require strong political commitment to grow and produce added value. It will also require investments, public and private, in:

• Implementation and monitoring of equality legislation and standards from local to national level, in all organisations (public as well as private) employing more than 50 persons (to start with).

• Development, implementation and monitoring of 'equality certificates' which would accredit not only equality processes within organisations but also their specific implementation of equality principles across the board.

• Development and implementation of university curricula, training and lifelong learning in equality legislation, monitoring, assessment and management, with a view to ensconcing highly-qualified cosmopolitan teams in tertiary-economy jobs which cannot then be delocalised in some remote place.

• Inclusion of equality management in all business schools and provision for awareness-raising further down the employment hierarchy.

• Extra-territorialisation of European equality legislation and standards to be complied with by all foreign companies exporting towards the EU or seeking to do business within it. Standards should be as legally binding and enforced as food and health-and-safety regulation to avoid distortion of competitiveness. This would create further job opportunities abroad for EU and non-EU citizens, while extending the benefits of an equality economy to non-EU countries, levelling up standards for all in the world.

Such measures—which should be partly subsidised by public money, at least to the level of the well-known major European projects in transport and communications infrastructures—would give a great push to the development of training and reinsertion centres, certification and auditing consultancies, research poles of excellence and so on. Indeed, the “equality economy” does not restrict itself to the employment arena but extends to all walks of life. It encompasses the reduction of social exclusion by providing adequate, tailored and relevant training, based on non-discriminatory and non-paternalistic approaches, to all those more or less remote from employment or socialisation.

It also encompasses the contribution to growth of organisations, public or private, delivering social services—not only in alleviating the devastating effects of neo-liberal policies on the most vulnerable groups and communities within our societies, as they are too often perceived, but as catalysts or even producers of equality for all, as active transformers of the fabric of our societies. Reinforcing their capacities will have a positive impact on the well-being of all and on atrophied redistribution systems.

Much more could fit under the label of 'equality economy': high-quality and high-value-added activities producing wealth, development and, more importantly, well-being in high-technology and human-rights-based post-industrial societies, as already to an extent in northern Europe. The awareness of decision-makers needs to be raised about the huge potential for growth of an under-valued and under-resourced economic sector, at a time where progressive ideas to step out of depression fail to be heard.

The European Commission and the European Council condone—or even encourage—cuts in social expenses and services, as well as in anti-discrimination and equality measures, even presenting them as preconditions of recovery. Yet they thus further squander the innumerable talents, resources and commitment that would give Europe the push forward it needs in this gloomy period. They should instead recognise and value the countless benefits and huge potential return on investment of the 'equality economy'. Its roots have already been laid down and its flowers are ready to blossom.

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