Britain: Lowest-Paid Labor in EC

For Europeans, integration will mean sharp curbs on domestic policy: Part 2 of a 4-part series.

THE timing couldn't have been much more poignant: Only days after Britain's insistence that it be exempt from the European Community's newly negotiated social policy - a policy it argued was merely a euphemism for Europe-wide labor regulations - a study published this week showed Britain with the highest proportion of low-wage workers in the Community.For its 11 EC partners, Britain's distinction is undoubtedly a dubious one, and vindication of the rest of the Community's push ahead on employment issues. The survey results reflect Britain's traditionally very different approach to employer-employee negotiations from those practiced on the continent. And it was those "differences" that Prime Minister John Major could not afford to be seen giving up at the EC summit in Maastricht, Netherlands, before an election. The survey, conducted by a French economic research organization, found Britain's high proportion of low-paid workers to be a result of its absence of a minimum wage, and its tradition of negotiating wages at the individual company level. On the continent, contract bargaining is generally carried out industry-wide, and minimum wages are set by government. Even though the debate over the new treaty's social chapter nearly brought the Maastricht negotiations to a halt, most observers find the policy as it was adopted so vague and drained of force that it would make little difference even in Britain. The policy forbids any Community-wide action regarding pay and wages, and calls for respect of "diverse national practices" in contractual relations. Community leaders have no intention of forging new rights, most observers say, but want to reassure workers when worry about unemployment is high. The text's very vagueness, however, is one reason British officials say Mr. Major held out. "We've had the experience before of the EC using vague texts to come through the back door," one senior official said. If most EC leaders needed the chapter as a symbol they could take home that European integration is not just for corporations and employers, Major needed to stay out as a symbol that a decade of Thatcherite economics and a new British business climate would not be sacrificed on the altar of EC unity. Judgments are mixed on the fears expressed by some EC officials and "continental" government officials that Britain's opting out will give it a competitive edge in attracting jobs and investment. "There are potentially some costs that industries would be able to avoid in Britain" if it remains exempt from the EC work regulations, "and that might make it attractive to some investors," says David Foden, a research officer at the European Trade Union Institute in Brussels. But Mr. Foden says any advantage will be offset by uncertainty over Britain's participation in an eventual single currency. "They also run the risk of attracting low-wage, low-skill work," he adds, "which is not what most European countries are focusing on."

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