Warning signs in Europe's job market: Workers now brace for tariffs

Euronews

7 hours ago

Much attention has been given to how US import tariffs might hit Europe's industries and corporate giants as the once-solid transatlantic trading relationship faces one of the biggest challenges of the modern era.
One area that has been largely ignored — the fate of workers — could also suffer, as ripples in the EU's economic stability lead to a reduction in job opportunities and weakened employment stability.
Here's an overview of what to expect in the months ahead.
Job vacancy rate
One indicator of labour market health is the rate at which vacancies appear, a sign of how stable businesses feel.
When lots of jobs are up for grabs, it tends to be a sign that companies are confident and ready to hire more people. When openings start to dry up, it usually means they're getting cautious. If vacancies are rising while unemployment is low, workers have more choice and bargaining power as demand is high relative to supply. But when available job offers fall, it's often the first hint that the labour market is slowing down.
Employers generally hit pause on hiring well before they start letting people go, which is why vacancy rates are such an important early clue as to what's coming. And right now, the data shows risks ahead.
In first-quarter figures released by the European Commission in June, there was a slight drop in the job vacancy rate, which came in at 2.4% in the eurozone. That's down from 2.5% in the final quarter of 2024.
When looking at the yearly change, the drop is more significant, as the rate for the first quarter of 2024 was 2.9%.
As seen in the graph below, the COVID-19 pandemic had the most pronounced impact on job vacancies, much more than the 2008-2009 economic crisis. While the market recovered somewhat in 2021 and 2022, vacancy rates are now dropping again.
Vacancy rates dropped the most in Germany, Greece, Austria and Sweden, indicating that employers are growing more reluctant, if only marginally, to hire more people.
For workers, a falling vacancy rate often means fewer opportunities to change jobs, less leverage to negotiate higher pay, and a longer wait to re-enter the market if they get laid off.
If the decline seen at the start of 2025 continues, workers could find themselves in a much tougher bargaining position by the end of the year.
Hours worked and overtime
Another important indicator is the squeeze on working hours or indicators that show employers are cutting back shifts, a step often taken before moving to layoffs or instituting a hiring freeze.
Overtime hours also decrease when employers trim shifts in response to falling demand or input shortages.
In the EU, in 2024, people aged 20-64 years worked 36 hours on average per week, including full- and part-time work. This number refers to the hours people worked in their main job in the reference week.
Countries with the longest working week were Greece at 39.8 hours, Bulgaria at 39, Poland at 38.9 and Romania at 38.8.
By contrast, when it comes to European Union countries, the Netherlands had the shortest working week at 32.1 hours, followed by Austria, Germany and Denmark (all with 33.9 hours).
The number of hours worked decreased by 0.3% in both the eurozone and the European Union in the first quarter of 2025, compared with the previous quarter, according to Eurostat.
Compared with the same quarter of the previous year, hours worked increased by 0.1% in the eurozone and decreased by 0.2% in the EU.
Fewer hours on the job does not just mean more free time. It often means less pay and fewer benefits, especially for hourly workers. If hours continue to shrink, the impact will be felt fastest among lower- and middle-income households already squeezed by increased living costs.
Even if employment levels hold steady, underemployment — when workers have a job but can't get the hours they want — can rise.
In the first quarter of 2025, 10.9% of the EU's extended labour force was underutilised, amounting to around 23.6 million people. This suggests that the erosion in job quality can run deeper than headline unemployment figures might immediately show.
Labour rights
Europe's institutional safeguards for workers are deteriorating, which is worrying when considering the economic shocks that could potentially be caused by tariffs in the future.
The Labour Rights Index for 2024 flags gaps in legislation based on its assessment of labour protections across the world. It evaluates aspects like freedom of association, employment security and family responsibilities through a 0–100 scoring system.
In Europe, countries such as Norway, Sweden, Finland, France and Italy score 94, while countries such as Germany and the UK score 88.5 and 88 respectively.
While many EU countries score highly on paper, the index highlights persistent legislative gaps in areas such as protection against unfair dismissal and equal treatment for non-standard workers.
These gaps mean that even in stable economic periods, large groups of workers remain less shielded from sudden job loss or deteriorating conditions.
Meanwhile, the ITUC Global Rights Index 2025 shows how these legal weaknesses translate into reality, and tracks violations of labour rights such as restrictions on strikes, the formation of unions, and judicial access and protections on a yearly basis.
According to ITUC, Europe saw its worst-ever average score in 2025, at 2.78, compared to 2.73 in 2024 and 2.56 in 2023.
"Europe continued a rapid deterioration from 1.84 in 2014 — the biggest decline seen in any region worldwide over the past 10 years," the ITUC report highlights.
According to the ITUC index, "nearly three-quarters of European countries violated the right to strike and almost a third of them arrested or detained workers. More than half were denied or restricted access to justice — a sharp increase from 32% in 2024."
What does this mean?
The economic signals of a slowing labour market — falling vacancy rates, shrinking working hours, and rising underemployment — suggest that workers may have less power to protect themselves just as their jobs and incomes come under strain.
In other words, tariffs and other trade shocks could land much harder in 2025, not simply because the economy is cooling, but because the institutional defences that once helped workers weather downturns are eroding at the same time.
With early warning signs already visible, the next few quarters will reveal whether these shifts are temporary tremors or the start of a deeper downturn for Europe's workforce.
If the combination of tariff pressure and eroding rights persists, the cost could be measured not only in lost jobs, but in lasting damage to workers' bargaining power for years to come.