Labour Markets: fixing Europe's most pressing competitiveness challenge
18 February 2025 - By Janez Potočnik, Sandrine Dixson-Declève and Milan Petit
A well-functioning labour market is one of the pillars of Europe's competitiveness and prosperity, and underpins its social contract. When this breaks down, the costs of failed businesses, lost years, and dreams unrealised is immense, and a potent driver of voter dissatisfaction. The gravity of this social dimension cannot be overstated — Earth4All, an international economic research initiative, finds that with business as usual, social tipping points will be breached before environmental ones. This makes addressing labour market dysfunction all the more urgent. As Draghi and Letta both state in their reports: if Europe is to successfully navigate the ongoing digital and green transitions, it needs a labour market that works.
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