EU report highlights job quality gains as bloc prepares Quality Jobs Act

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EU job quality gains report

Highlights

EU job quality has improved over the past decade, lifting productivity but remains uneven across sectors and member states, according to the 2026 European Employment and Social Outlook.
The EU Minimum Wages Directive led to the sharpest minimum wage increases in lower-wage member states, with higher wages pushing businesses to invest and innovate.
The Commission forecasts the EU employment rate at 76.1% and unemployment at 6% in 2025, with 440,000 fewer jobs expected in 2026 due to the Middle East energy shock.

Commission report links better jobs to productivity

As reported by the European Commission, the 2026 European Employment and Social Outlook says job quality in the EU has improved over the past decade, with progress in pay, job security and working time. The report argues that stronger job quality helps lift productivity by improving motivation, reducing staff turnover, encouraging skills development and supporting better work organisation.

The Commission says job quality remains uneven across sectors and member states. Higher-quality jobs are more common in information and communication, finance and insurance, public administration, and professional, scientific and technical activities, while poorer-quality jobs are more often found in accommodation and food services, administrative and support services, and some lower-skilled service roles.

The report adds that labour shortages are often more severe in poorer-quality jobs, suggesting that better conditions can help employers attract and retain workers where demand is strongest. Later this year, the Commission plans to present the Quality Jobs Act after the second-phase consultation of EU social partners.

Wage trends and AI shape labour market outlook

The outlook says wages can continue rising only if companies become more productive, while higher wages, especially minimum wages, can also push businesses to invest and innovate instead of competing through low labour costs. Since the EU Minimum Wages Directive was adopted, minimum wages have increased most sharply in member states with lower wage levels and larger shares of minimum-wage earners.

The report says AI can raise productivity and improve job quality by helping workers focus on higher-value tasks and build new skills, but its effects depend on how it is introduced and governed. It also warns that AI may weaken labour demand in some entry-level and routine roles, while emerging research suggests heavier use of automated tools could reduce learning by doing, weaken critical thinking and increase the need for human supervision.

On the wider economy, the Commission says the EU labour market has stayed resilient, with the employment rate reaching 76.1% in 2025 and unemployment holding at a historic low of 6%. For 2026, its analysis shows the energy shock linked to the conflict in the Middle East is likely to slow employment growth without stopping it, with around 440,000 fewer jobs expected to be created and real wages standing 1.4% above pre-COVID-19 pandemic levels.

Our previous coverage of the IMF’s warning on AI-driven job disruption noted that artificial intelligence could affect up to 40% of jobs worldwide, forcing policymakers to balance productivity gains with displacement risks. We highlighted the IMF’s call for stronger worker protections and for major investment in reskilling and upskilling so employees can adapt as automation spreads across industries.

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