The multiple faces of the wolf called Social Dumping (I)

“Despite an increase in usage of the expression, there is still no clear, universally accepted definition of ‘social dumping’. Social dumping is a hotly debated issue in European circles, the term itself having negative connotations, hinting at the exploitation of workers.

On 14 August 2015, Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, gave a written answer to a European Parliament question on definitions, in which she stated: ‘There is no definition of the concept of „social dumping” in EC law. The term is generally used to point to unfair competition due to the application of different wages and social protection rules to different categories of workers’ (Parliamentary questions, 27 May 2015, E-008441-15).

The use of the term in public discourse primarily refers to international, cross-border situations. Nevertheless, some key features of social dumping practices can also be found in domestic markets.”[1]

The lack of a general acceptance or definition, leads not only too confusion but also to tricky and sometimes unjust political and legislative decisions, splitting or dividing even the socialists themselves, scrapping the roots of trade unionism and collective wellbeing values.

It is for this heroic reason that I write this article, as I think I have my own theory.

One aspect , the most visible and commonly known is when you read in the press about a bunch of poor Romanian, Polish or Czech workers, partially in the construction or transport sector who worked for quite a while without being payed, exploited, and found in the street in despair. And if the end of the true story is not that tragic, you have at least the following conditions of social abuse and exploitation:

1) no papers, letter box companies and similar -that is not social dumping it is a criminal, fraudulent act and should be punished accordingly;

2) salaries and working conditions below the arrangements foreseen in their contracts (if at least concluded in the virtue of the directives and the collective labour agreements)-that is again, not social dumping but an act of exploitation and abuse which could be punished by the administrative or civil law;

3) salaries and working conditions  which are in full respect of the directives and collective bargaining agreements, but which are not at the same level as the local workers benefit from-now that is social dumping.

Unfortunately, the mix of the three situations, which as you can see are totally different, contribute to a chaotic perception of the mobile workers, sometimes triggering the sympathy or empathy of the reader public and for other and many times hated and reiterated in the populist speeches of the Tories or Le Pen. Not to forget that some EU countries are “fed-up” to see migrants and mobile workers everywhere while their living conditions get worse and the public speech is used in order to persuade one man against another, as “divide et impera” is quite easy to do, rather than unite people.

The problem of the latter situation from my third example stems in the organization of the single market and the particularities of every Member State regarding the labour market, social partners and economic interests. So, indeed, the debate is European and the solution is to be found at the EU level.

Morality, a word I would put under political discussion for the sake of channeling decisions as close as possible to the citizens interests, on the single market would mean that for the same work every workers should get the same payment and the same working conditions, no matter where they are active. All trade unions agree upon. But this is pure theory and ideatic approach for now, as the European minimum wage failed the mathematics.

If we look at the competitive advantages gained by the foreign investment companies in Southern-Eastern Europe, in the main countries of origin of the mobile workers, you can easily see that the minimum wages ranged at 300 euros are of an interesting argument in the question of equality and morality as mentioned above. But you would say that this is fine, as it is paid according to the law and local realities. So is social dumping. Therefore, I would argue that this could also be interpreted as a form of social dumping. Furthermore, there is no interest to discourage the practice as it would mean outsourcing or delocalization of the foreign companies, which would mean an economic disaster for the regions of my country. This situation reminds me, perhaps extrapolated, of the debate in economics regarding what is best or worse for a child, to be sexually abused or survive the labour exploitation.

Following the same logic of the competitive advantage on the single market, the posted workers and the companies benefiting from the process of mobility in full recognition of the law, could also be accepted as the ones mentioned above, even if the wording of social dumping would intervene again. So, there should be no division, one could say. So, where is the problem?

In the constructions sector, one posted worker can earn and does earn (and please do not mix this argument with the cases of exploitation and abuses which are not about social dumping, but criminal acts) more than a local worker. The minimum wage in Belgium for a person in the sector is 1. 200 euros net.  One Romanian posted worker that is treated in respect of the rules in place earns 1. 800 net. He has his 300 euros plus the daily allowance, which is calculated as salary. The daily allowance is not to be taxed neither in Belgium, neither in Romania. This could be a discussion, but not in the context of social dumping, rather in the context of taxation of income. An employer has to ensure also the food, the housing and the transport of the posted workers.

Currently, there is a new proposal on the table to change the posted workers directive in order to secure the fair wages and working conditions. I would argue that none of the parties concerned should be worried if their final purpose is to secure the fair wages and working conditions. The problem is that the picture as a whole is far from being fair. Because you can’t speak so bluntly [2]about equality of wages or any other conditions, until you reached cohesion within North and South, between East and West. It is for that reason that I would argue that we fight on the wrong battle filed. And as long as we feed the wrong wolf, we will increase the power of Eurosceptics. There is no way possible to explain to Eastern Europe that “she” should accept and be happy with less, as the foreign companies pay the 300 minimum wage salary, while “her” own companies can’t send workers abroad in full respect of the legislation which, by the way,  is about to change.  “She” will never understand why the competitive advantage of her inner market can’t be exploited outside too. Cause, I repeat, unless there are clear cases of slavery, exploitation and abuses, unless there is a proven distortion of the market under the competition law, I tend to argue that we do nothing else but to divide even more Europe under the wrong approach, while we need to be busy fighingt against further division in Europe, under a new, representative slogan which can unite people across the Member States.

And I, among few, fought and fight abuses against the workers since many years. [1]

For as long as there will be poverty, little information and a certain education, people will accept to be exploited.

It is for this reason, that the title of social dumping, its multiple faces, and several connected directives will not be sufficient, and even worse, it risks to divide us even more. Simply beacuse they are all used under the wrong umbrella of gapping the EU.