PES: Company profits should be better shared with employees
Europe urgently needs political action to reverse widening inequality between wealthy shareholders and the workers and producers who generate value but see only a tiny proportion of corporate profits.
A recent report by Oxfam identified that more than two thirds of the profits of leading French and European companies went to the pockets of shareholders -- more than double the rate in 2000 -- with employees receiving only 5%.
Oxfam's report is yet more evidence of the increasingly unjust distribution of profits in Europe, which the Party of European Socialists recognises as a direct cause of wider social and economic inequality and must be tackled as an urgent priority.
PES president Sergei Stanishev said:
"The focus on maximising short-term profits and price competition has not only led to downward pressure on workers' and producers' pay, but also encourages companies to avoid social and environmental obligations.
"It also incentivises aggressive avoidance of tax. Socialists and social democrats believe in a fair, progressive tax system in which everyone contributes his or her fair share."
The PES believes that high levels of inequality are far from inevitable. Rather, they are the result of a political agenda which we believe must change. To read our detailed policy proposals on reversing the trend towards inequality and creating a fairer society, download our discussion paper from the PES Social Europe Network.
In a related move, earlier this month over 400 academics, trade unions and politicians from across the political spectrum published a Europe-wide call for a new balance in the relationship between companies and their employees, to reinforce workers' participation, establish greater subcontracting chain responsibility and prevent so-called ‘letterbox companies’, which deliberately locate their virtual headquarters in countries where they have no tangible economic activity as a tax avoidance measure.