EUROPEAN CONSCIENCE – The cost of discrimination


When laws fail to provide equal opportunities, society pays the price. The road towards equality in the Union is still a long one.

Helsinki, Stockholm, Rotterdam, Bristol and Zurich. They may not be the most beautiful or the richest cities in Europe, but they are the ones that can boast the highest level of equality. This is apparently the view of Spotahome, a site that provides medium to long-term home rentals.

Their “equality index” is based on a series of social indicators such as women’s participation in the work force and politics, their career prospects, gender wage discrimination levels, acceptance of homosexuality, disabled access, immigrant welcome and the differentials in terms of wages and political and civil rights.

Of the 33 cities in the rankings, the two Italian ones – Milan and Rome – drag their heels in 29th and 30th position, well below Madrid and Barcelona (19th and 25th) yet ahead of London (32nd).

“If you talk to people about what they want from a country or a city, most people put equality at the top of their list”, according to the site personnel. “We work with people who are moving to new places. They ask us about the level of equality in the new city or the new country. They want to know what they can expect.”

In theory, equality is one of the values promoted by the European Union. It’s included in the Treaties and the EU’s Charter of Fundamental rights specifically mentions “the principles of non-discrimination, equality between men and women, cultural, religious and linguistic diversity”, as well as the rights of children, the aged and the differently able. Many of these principles have been translated into laws thanks to European directives, such as those on racial equality, gender equality in jobs, a fair treatment of men and women in independent employment, the social inclusion of the differently able and so forth.

But in actual fact inequalities are rife and in certain cases risk moving in the wrong direction, as is reported by the European Women’s Lobby (an organisation in Brussels that supports women’s rights). The data unearthed by a study promoted by the European Parliament on equality and the fight against racism and xenophobia provides disconcerting reading. According to a 2015 survey quoted in the report, 21% of the persons interviewed (47% if gay), had suffered discrimination in the previous 12 months. A third of women in the EU have suffered physical or sexual violence during the course of their life. As many as 75% have had to endure harassment at their place of work. Then again, given an equivalent job level, wage differences compared to men are still significant. Even people with different abilities are often discriminated against. Not to mention racial or ethnic hatred, which according to the European Agency for fundamental rights last year affected 24% of the people involved. In total, according to the European parliament assessment, approximately two third (65%) of the European population is at risk of discrimination.

The authors of the report have also quantified the cost of these instances of discrimination. The study is part of a series that take into account the “Cecchinireport”, named after the Italian economist who was among the first to calculate the cost of non-integration of the single market. The calculation considers the impact on state budgets in terms of the lack of economic growth and tax revenue. To this one has to add the price paid on an individual level, in terms of lost job and education opportunities and additional expenditure for protection and health.

Based on these assumptions, the experts have drawn up a long list of direct and indirect consequences, that are not always that obvious, linked to inequalities.

The figures in detail. Where gender discrimination is concerned, the revenue lost by women as a result of a reluctance to enter the job market, limits in career advancements and the loss caused due to lower wages for equivalent jobs compared to men, amount to a sum of between 241 and 379 billion euro a year. These discrepancies also favour economic dependence and exposure to violence by partners. Besides the physical and moral damage, the cost of the violence (for example ensuing legal and moving costs) are estimated to amount to 7 billion euro while the resulting physical and emotional traumas have been calculated as amounting to 134 billion. As for racial discrimination, the loss in terms of lack of personal income are estimated to be between 1.8 and 8 billion euro. These figures do not include indirect damage resulting from social exclusion or being forced to live in unhealthy living conditions. For homosexuals, loss of income amounts to between 19 and 53 million, but those related to pension income range between 1.5 and 3.1 billion. In certain European countries homophobia is even not considered a hate crime. Even for people with disabilities the lack of income represents a significant amount, between 15 and 41 billion euro. And similar impacts have been recorded in relation to age discrimination.

Besides the costs for the individual, repercussions are also felt by the whole of society. According the report, the lost opportunities due to the wage gap between man and women will translate into a loss of GDP of 540 billion euro in 2030. While another 30 billion are lost due to gender violence and between 2.4 and 10.7 billion as a result of racial hatred. To these figures one has to add the millions in lost tax revenue, lower productivity and the additional burden on the health and justice systems.

There is no overall figure that can measure this economic damage, partly because at times the same people are victims of discrimination on a number of fronts (for example women belonging to ethnic minorities). But it’s clear enough that the personal and social loss is huge.

The difficulties, according to the research, are linked to fragmentary and incomplete laws, the fact that in European legislation people are mainly protected against discrimination at the work place. There a also major differences at a national level in the interpretation of the directives, in the opportunities offered to victims to secure justice and in the sanctions for those who don’t follow the rules.

The report calls for an EU mechanism that was capable of monitoring democracy, the rule of law and the fundamental rights in the member states. A request that is becoming even more pressing given the institutional reforms that are whittling away at civil rights in countries like Poland and Hungary. On this point, the French Minister for Foreign Affairs, Nathalie Loiseau, has suggested a mechanism by which one could monitor compliance with fundamental rights similar to the one used to verify compliance with economic parameters: a European country that does not respect the Union’s fundamental rights would have to appear before the institutions in Brussels on a half-yearly basis to provide explanations. The problem is finding an agreement on such a proposal and managing to address the many reasons for the inequalities. In the meantime, the countries and the regions with the highest levels of discrimination will continue to pay a price that is not just cultural and social, but also financial.

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