Understanding the Impact of Tariffs on Europe’s Labour Market
The ongoing tension between the United States and Europe over import tariffs has sparked widespread concern about its effects on industries and major corporations. However, one critical aspect that has received less attention is the potential impact on workers across the European Union. As the transatlantic trade relationship faces significant challenges, the economic stability of the region could be affected, leading to a reduction in job opportunities and weakened employment security.
Job Vacancy Rates: A Barometer for Labour Market Health
One key indicator of the health of the labour market is the job vacancy rate. This metric reflects how many positions are available within a given period, offering insights into the confidence of businesses. When there are numerous job openings, it typically signals that companies are optimistic and willing to hire more people. Conversely, when vacancies start to decline, it often indicates a more cautious approach from employers.
Recent data from the European Commission shows a slight decrease in the job vacancy rate in the first quarter of 2025, with the rate standing at 2.4% in the eurozone, down from 2.5% in the final quarter of 2024. The year-on-year comparison reveals a more significant drop, as the rate was 2.9% in the first quarter of 2024. This trend suggests that employers are becoming more hesitant to hire, which can have implications for workers seeking new opportunities.
Countries such as Germany, Greece, Austria, and Sweden have experienced the most substantial declines in vacancy rates. For workers, this means fewer chances to switch jobs, less leverage in salary negotiations, and potentially longer periods of unemployment if they lose their current positions.
Working Hours and Overtime: Indicators of Economic Shifts
Another important factor to consider is the number of hours worked and the level of overtime. These metrics can provide insight into whether employers are cutting back on shifts, a step that often precedes layoffs or hiring freezes. In the EU, the average working week for individuals aged 20-64 was 36 hours in 2024. Countries like Greece, Bulgaria, Poland, and Romania had the longest working weeks, while the Netherlands, Austria, Germany, and Denmark had the shortest.
According to Eurostat, the number of hours worked decreased by 0.3% in both the eurozone and the European Union during the first quarter of 2025 compared to the previous quarter. While the eurozone saw a slight increase of 0.1% compared to the same quarter of the previous year, the EU experienced a decrease of 0.2%.
Fewer working hours can lead to reduced income and benefits, especially for hourly workers. If this trend continues, lower- and middle-income households may face even greater financial strain due to rising living costs. Underemployment, where workers have jobs but cannot secure the hours they desire, can also rise, further impacting job quality.
Labour Rights: A Growing Concern
Europe’s institutional safeguards for workers are under threat, raising concerns about the ability of workers to protect themselves during economic shocks. The Labour Rights Index for 2024 highlights gaps in legislation, particularly in areas such as protection against unfair dismissal and equal treatment for non-standard workers.
While many EU countries score highly on paper, the index points out persistent legislative weaknesses that leave large groups of workers vulnerable to sudden job loss or deteriorating conditions. The ITUC Global Rights Index 2025 reveals a worrying trend, with Europe recording its worst-ever average score in 2025 at 2.78. This score reflects violations of labour rights, including restrictions on strikes, union formation, and access to justice.
These issues underscore the growing vulnerability of workers in an environment where economic pressures and trade tensions could exacerbate existing challenges. As the labour market slows down, workers may find themselves in a weaker position to negotiate better terms or protect their interests.
Conclusion: Navigating the Future of Work in Europe
The combination of falling vacancy rates, shrinking working hours, and rising underemployment signals a challenging landscape for workers in Europe. As these trends continue, the erosion of institutional defences that once helped workers weather economic downturns becomes increasingly concerning.
With early warning signs already visible, the coming months will be crucial in determining whether these shifts are temporary or the beginning of a deeper downturn for the workforce. If the pressures of tariffs and the weakening of labour rights persist, the consequences could extend beyond lost jobs, affecting workers’ bargaining power for years to come.