Labour market reforms implemented by Charles Michel’s outgoing federal government only created 30,000 private sector jobs in the period from 2015 to 2018, according to a new study by the Institute for Economic and Social Research (IRES) at UCLouvain.
This figure is at odds with the number officially claimed by the Belgian government, which has stated that the majority of the 160,000 private sector jobs created in this period were due to its labour cost-cutting reforms.
European Commission’s strategy called into question
IRES’s analysis calls into question the economic strategy of the European Commission, which imposes a policy of ‘wage moderation’ (i.e. suppression) on its member states which, it claims, boosts competitiveness. This new study, however, suggests that the impact of such moderation on job creation is low, and moreover that such a strategy can encourage an unhealthy ‘race to the bottom’ of member states’ social security systems.