Cash, credits and crisis: life in the new European 'precariat'

Guardian Web |

One of the big criticisms of the EU is that it has shifted the focus over the past 30 years from social protection and solidarity towards growth and globalisation.

The upshot has been rising inequality and mounting precariousness for a tier of people who find that work can be insecure, sporadic and so low paid that it doesn’t even cover the bills.

A survey published this week by the European Council on Foreign Relations found that only a third of Germans and a quarter of Italians and French typically had money left over at month-end for discretionary spending.

Recent work by French economists meanwhile found that the average income of the richest 1% of Europeans has grown twice as fast as that of the bottom 50%. The poverty rate remains 21%, the same as it was in the mid-2000s.

“This rise in inequality, visible in almost all the countries in Europe, has taken place in a context of growing fiscal competition between European states which has undermined the progressiveness of taxation,” according to the study published last month by Lucas Chancel, Thomas Blanchet and Amory Gethin.

As a result, a new “precariat” is forming across Europe: millions of people who have jobs but still can’t quite make ends meet.

France

“You have to have 360-degree vision and three arms,” says Christelle N as she supervises a whirlwind lunch for six children in her tiny Lyon kitchen. A baby in a high chair spits out his mash, while a teenager complains of not having enough rosti. “Take mine,” Christelle says. Often she forgets to eat herself.

Two of the children are hers; the other four are her childminding business, a hand-to-mouth affair that needs to be supplemented by some neighbourhood ironing, to make ends meet.

Like a quarter of French families, Christelle and her daughters form a single-parent home. In 30 years, their number has increased by 87%. They have been prominent in the gilets jaunes movement, not that Christelle has time for that.

“How I would find time to demonstrate when going to the bathroom is already a luxury?” she says.

Christelle has never been short of work, but she has never made enough money to feel comfortable. Her résumé is a long litany of those underpaid jobs, mostly female, which take their toll: housekeeper, carer, waitress, telephone operator. Long-term contracts are scarce.

Working days are long to adapt to the unpredictable vagaries of parents and their employers. Children come and go, parents can be slow to pay, income varies. “Being a solo mum means never having the right to make mistakes,” she says. Despite two court appearances, her former spouse does not pay her child support.

So Christelle watches what she spends, using discount stories and secondhand sites. She shares the monthly rental (€800 euros per head) with another single mother, but she is moving soon as the owner wants his house back.

“When we call a real estate agency saying we are single mothers, they hang up,” she says.

Three months ago, her nerves gave out. She had to stop working for a week. “I fight to live with dignity, but it is tough always being insecure”. Friends offer to babysit, but going out is costly, and what would she do anyway?

“You forget how to be with other people,” she says. “In an adult conversation, I can’t find the right words. I live next to the world without really being in it.”
Charlotte Chabas of Le Monde, in Lyon

Italy

At , the sun is still low and Stefano Vanzini is already in the office, while the children are still asleep.

“We are full of work, all the fault of the bureaucracy. Ten years ago we thought of buying buildings and warehouses, now we are thinking of selling them,” he says.

His paint company used to be a small empire, founded by his father Franco in 1945. The 1960s were the hard graft years but, by the 1990s, they were turning over more than one billion lire (£50m). “I can say we never fired anyone then,” says Vanzini.

But decades of sluggish growth in Italy have taken their toll. The financial crisis wiped out some cheap competitors, but the rot really started to set in by 2012. Revenues fell by half.

Every day is a struggle for survival against fierce competition, says Vanzini. “The taxes that have increased, bureaucracy and certifications that overwhelm us with work.” In order to survive, “we have also accepted zero-profit orders, in order to run the money and not leave the workers at home.”

Vanzini is 57 and is not about to give up, though he knows his sons will not carry on the business. “I am willing to help them economically, as my father did with me,” he says. “For them, children of a crisis, Italy is no longer the country of easy opportunities.”
Letizia Tortello, for La Stampa, in Turin

UK

Clare Eckerman is a far from unusual case study of the way universal credit, the UK government’s flagship welfare reform, can transform individuals’ lives – and not in a good way. The 62-year old school administrator from County Durham is £400 a month worse off since she moved on to the new benefit last autumn. Life, she says, is now harder, more stressful and uncertain.

Eckerman, who is also registered disabled because of a degenerative health condition, was advised – wrongly, she insists – to move on to universal credit from her existing suite of benefits by the Department for Work and Pensions (DWP). No one told her the move would cut her income overnight or that it was impossible to move back.

“It increases your worry and anxiety,” she says. “Making ends meet is very difficult to do. Universal credit cuts you down to the bone. We can’t afford clothes from the shops at the moment; we can’t afford to enjoy ourselves – can’t go to the theatre or go out for a meal. There are no luxuries”.

Eckerman’s case has been taken up by her MP Laura Pidcock, who has demanded that the DWP pay compensation for misadvising her. So far the DWP has suggested there is no solid evidence that this was the case. Eckerman, a mathematics graduate, says no one would knowingly agree to sign up to a £5,000-a-year income cut.

“It’s infuriating when you have paid in [taxes and national insurance contributions] all your life,” she says. “We are managing but, in practical terms, we have lost a lot. We need new flooring for the living room. Our fridge is on its last legs. There are a lot of things where we say ‘we could have done that’ with the £400 a month.”

The experience has not just caused financial difficulties, says Eckerman, but has eroded her faith that the state could be trusted to protect her: “My faith in the welfare state was total. We were lucky, I thought, living in the best country in the world. They [the government] were looking after us. All that faith has been swept away. It’s crushing.”

Universal credit was meant to haul the UK’s social security system into the 21st century. Millions of benefit claimants – those without jobs and low-paid workers – would claim the new digital benefit. Six separate working-age benefits would be rolled into one single monthly payment. It would be more efficient and its design would incentivise claimants to move off benefits into work or work more hours.

But from its tentative emergence at the start of the decade under the coalition government (with a degree of cross-party support for the principle) universal credit has struggled. Technical problems mean it will not be operationally complete until 2023 – six years behind schedule. Deep austerity cuts have made made the new benefit – the last line of defence against destitution for millions – less generous, undermining its standout promise to make claimants better off in work.

Pidcock says Eckerman’s case demonstrates universal credit’s “callous disregard” for the poorest families. “Just like other welfare reforms such as the bedroom tax, their purpose is ideological: to reduce entitlements without a care for the impact on real people’s lives. The language of fairness and simplicity has been used as a cloak to hide the piece-by-piece dismantling of the social security safety net.”

Although the government once liked to suggest no one would be worse off under universal credit, billions of pounds of welfare cuts – including a four-year freeze in benefit levels – has changed that. A recent study by the respected Institute for Fiscal Studies thinktank calculated that 1.6m people would be better off under universal credit, but nearly 2m would lose more than £1,000 a year, with disabled claimants worst affected.

Politically, all this is proving hugely problematic. Millions will move on to universal credit over the next few years. Its notoriety, meanwhile, grows: as a feared emblem of austerity, the distant out-of-touch state and the precariousness of life at the lower end of the income scale. As Eckerman says: “If I were about to go on to universal credit, [knowing what I do] I would be petrified now.”
Patrick Butler, for the Guardian

Germany

In the hills of Bavaria, once a rolling landscape of farms, fields and forests, the car industry has insulated places such as Marklkofen for decades.

But now change is in the air. And it is not all good. Driverless vehicles are coming – and electric vehicles are already here. Germany is in danger of falling behind. Marklkofen, home to the automotive parts supplier Mann+Hummel, is worried that it will fall behind, too.

“The operation dominates the area,” says Michael Nussbaumer. His mother, father and brother all work for the firm, as do half of his friends.

“The order situation is good,” says Nussbaumer, “but we feel the change.” Slowly, but from two angles. “In products and in digitisation.”

Mann+Hummel produces filters for oil, fuel and air. All depend on the internal combustion engine. The electric revolution could obviate the need for these products, so Nussbaumer has no idea if the plant in Marklkofen has a place in the future of the automotive industry. “We need more exchange about the upheavals and the consequences,” he says.

The mayor, Peter Eisgruber-Rauscher, says everyone is facing uncertainty over whether the good times are about to end. “I know very well that everyone is nervous,” says Eisgruber-Rauscher. “We have reached a zenith at the moment. I do not know what’s coming.”

In the meantime, Nussbaumer is organising a large nationwide demonstration, which will take aim at politics and business in Berlin at the end of June. “Fair work” is the union motto.

“We will not stop it all, so at least we ought to be at one with it,” he says. Big questions are who keeps the profits from automation and whether Germany should join in with the demonisation of the internal combustion engine.

Otherwise, it will be back to the farms, fields and forests of the mid-20th century.
Max Hägler, for Suddeutsche Zeitung, in Marklkofen

Spain

Not so long ago, Joan had a good job with a textile multinational, a family, a smart car, annual holidays to Ibiza or the Costa Brava.

But financial crisis, divorce and redundancy all took their toll. Now the 47-year-old lives in the warehouse of a bar he owns in Barcelona, with his new partner and young child.

Bar takings are not really enough – barely €100 some days - and the place is likely to close this summer. Clients do not pay bills on time; expenses mount.

“Now I only open from six in the afternoon and, of the four employees that we were, only I remain,” he says.

Joan is part of a group of working, middle class people who used to be able to cope with their gas, water and electricity bills and who never thought they would need to seek help from community groups.

“I never thought I’d find myself here - my other half is trying to get help from the local social services and I’ve turned to the Partnership against Energy Poverty (APE), who are advising me on getting the bills reduced so that I don’t get my electricity cut off.”

The APE was formed with the aim of putting pressure on companies and local authorities to stop interrupting utility supplies to the most vulnerable people in society. More than 37% of the families in the Barcelona metropolitan area spend more than 40% of their income on rent and associated housing costs. That is way above the European average of 25%, according to a study by the Barcelona’s Institute of Regional and Metropolitan Studies.

“My generation is having a worse time of it than the previous one,” says Joan. “Our parents were able to buy second homes and everybody at least had a flat. But now half my friends are stuck at their parents’ homes, unemployed or working intermittently and, if they’re over 40, they’ll never get a job again. The only reason there hasn’t been a revolution is because our parents have flats and pensions.” Rosa M Bosch, for La Vanguardia, in Barcelona

This article is part of a six-newspaper collaboration called Europa in which work is reported by one or more newspaper and shared for publication with all. The six papers are The Guardian, Le Monde, Sueddeutsche Zeitung, La Vanguardia, La Stampa and Gazeta Wyborcza

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