“This year, for the first time, Luxembourg is among the countries placed under surveillance.” With these words, the Luxembourg Chamber of Employees introduces its latest publication. Here she evokes the inventory drawn up by the European Union in terms of social and economic issues.
An inventory which, according to the Chamber of Employees, demonstrated a risk for “upward social convergence”, that is to say “a dynamic in which the performance of EU Member States improves in an area or in a set of given areas, while the gaps between Member States narrow”, for Luxembourg, as well as for nine other countries (Bulgaria, Estonia, Spain, Italy, Croatia, Hungary, Romania, Greece and Lithuania).
The Chamber of Employees highlights four subjects on which there is a need to act in order to improve the situation.
Increased risks of poverty
The organization initially estimates that “the social situation in Luxembourg has deteriorated significantly in 2023, particularly in the areas of housing costs and poverty”, based on a proposal from the Joint Report on employment (RCE).
According to the Chamber of Employees, “the share of people exposed to the risk of poverty or social exclusion reached 21.4%, a level slightly higher than the European average (21.3%). This trend is even more marked for children, with a rate of 26.1% compared to 24.8% in the EU, reflecting a particularly difficult situation for many children and adolescents.
In addition, the Chamber of Employees ensures that “the effectiveness of social transfers (community or state aid which does not include pensions, editor's note) in reducing poverty has collapsed in Luxembourg, passing from 40.4% in 2018 to only 27.4% in 2023.
Too much surcharge linked to the cost of housing
Another point to watch carefully, according to the professional chamber: the surcharge linked to the cost of accommodation. “The cost of housing remains a major structural problem, weighing heavily on household budgets,” she writes.
Thus, “in 2023, 11.5% of Luxembourg residents suffered a housing-related surcharge, compared to 8.8% for the European average. In Luxembourg, this rate reaches 29.3% for single people with children compared to 16.6% for the EU as a whole. The rate of excess costs linked to housing also concerns more than one in four single adults under 65 (27.6%) and 23.4% of single people of all ages, which clearly shows the extent of the issue”.
An unemployment rate “to watch”
The unemployment rate in the Grand Duchy is also an indicator to monitor, according to the Chamber of Employees. “The employment rate remained at 74.8%, slightly below the European average, while the unemployment rate reached 5.2%, after two consecutive years of moderate decline,” says her, arguing that this unemployment rate is now considered “to be monitored”.
Especially since forecasts tend towards an increase in unemployment: in its latest economic note, Statec reported an increase in November 2024 compared to the previous month, with a rate rising from 5.8% to 5.9 %.
A smaller share of the population with digital skills
Finally, the possession of digital skills, perceived as a “growing challenge”, is declining in the country. “In 2021, 63.8% of adults had basic or advanced digital skills, a percentage which fell to 60.1% in 2023, a marked deterioration while most EU member states are making progress” , continues the Chamber of Employees.
Therefore, “although this figure remains higher than the European average (55.6%), this negative trend must also be taken seriously and be the subject of in-depth analysis,” according to the institution.
A summary table
In order to highlight its analyses, the Chamber of Employees has attached a summary table of the 17 indicators analyzed for each country, with an assessment assigned for each of them.
17 indicators were analyzed. © PHOTO: Chamber of Employees
Luxembourg has the “best results” in one of them, three “better than average”, one “good but to watch”, four “in average”, seven “to watch” and one result in ” critical situation.
