Friday

5th Mar 2021

EU Commission unveils 'adequate minimum wage' plan

  • 'Promising the same minimum wage for all Europeans would not be realistic, would be impossible and irresponsible,' said the EU commissioner for jobs and social rights, Nicolas Schmit (Photo: EC - Audiovisual Service)

The European Commission proposed on Wednesday (28 October) minimum standards to ensure an "adequate minimum wages" across the EU.

While commission president Ursula von der Leyen has previously referred to this initiative as one of her top priorities, ensuring workers have access to an adequate minimum wage has only gained in prominence due to the economic maelstrom of the coronavirus pandemic.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"Improving working and living conditions will not only protect our workers, but also employers that pay decent wages, and create the basis for a fair, inclusive and resilient recovery," von der Leyen said in a statement.

According to the International Labour Organisation, adequate minimum wages contribute to sustaining domestic demand, strengthen incentives to work, reduce wage inequalities and in-work poverty.

In the EU, in-work poverty increased from 8.3 percent in 2007 to 9.4 percent in 2018 as a result of the previous economic crisis.

Meanwhile, the new initiative also aims at reducing the gender pay-gap - given that nearly 60 percent of minimum wage earners are women.

In the EU, minimum wage protection in Denmark, Italy, Cyprus, Austria, Finland and Sweden is provided exclusively by collective agreements, and the remaining 21 countries have statutory minimum wages set by governments.

However, the proposal does not oblige member states to harmonise their systems, nor does it set a common minimum wage level.

Instead, the provision promotes collective bargaining on wages as a "gold standard" for all member states since those countries with high collective bargaining coverage tend to have a lower share of low-wage workers, lower wage-inequality and higher minimum wages.

"There will be never, at least not in the foreseeable future, the same level of minimum wages in all the member states of the Union," said the EU commissioner for jobs and social rights, Nicolas Schmit.

"Promising the same minimum wage for all Europeans would not be realistic, would be impossible and irresponsible," he added.

Bargaining vs statutory systems

The group of member states that already have collective bargaining systems should ensure that 70 percent of their workers are covered by such a system, the proposal says.

Those who do not reach this level of coverage would have to prepare an action plan and to inform the commission about how they plan to reach that minimum target.

Meanwhile, countries with statutory minimum wages are expected to put in place conditions for minimum wages to be set at adequate levels, including clear and stable criteria for setting, monitoring and regularly updating the level.

These criteria should take into account the cost of living and the contribution of taxes and social benefits, the general level of gross wages and their distribution, the growth rate of gross wages, as well as labour productivity.

These member states are also supposed to increase the engagement with social partners, such as employers organisations or trade unions, when setting and updating minimum wages.

Additionally, these member states will also have to justify the use of different rates of statutory minimum wage ensuring that variations for specific groups of workers are "non-discriminatory, proportionate and justified".

All member states will have to inform the commission on developments annually.

The proposal now has to be negotiated with EU governments in the European Council and lawmakers in the European Parliament. Once adopted, member states will have two years to transpose it into national law.

Coronavirus

Spain takes 'giant step' on guaranteed minimum income

The minimum income guarantee was a condition included in the coalition agreement between the Socialists and the leftist group Unidas Podemos, after the indecisive results of the November national elections.

Opinion

EU minimum wage - a view from Poland

An EU minimum wage would vary between member states, at 60 percent of their respective average or median national wages. Six countries would be obliged to introduce a minimum wage. Is this a whim or a necessity?

Opinion

Why EU minimum wage is actually bad idea for workers

As president of one of the largest trade union confederations in the EU, I see the need for good working conditions and decent pay in all member states - but an EU-wide minimum wage could be used to lower wages.

Opinion

EU minimum wage directive undercuts Scandinavian model

Imposing minimum wages and interfering in collective bargaining through binding legislation, not only means breaching EU treaties - there is also a serious risk that this will undermine successful labour market models that have delivered real wage increases for decades.

Opinion

Sweden's non-lockdown didn't work - why not?

The Swedish king would have been better advised to use his annual Christmas interview to call for unity of purpose and shed light on the political roots of the country's response.

Column

BioNTech: Stop talking about their 'migration background'

I understand that the German-Turkish community - often subjected to condescension in Germany - celebrated the story. Uğur Şahin and Özlem Türecki represent scientific excellence and business success at the highest level.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  2. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  3. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  4. Nordic Council of MinistersWomen benefit in the digitalised labour market
  5. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  6. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!

Latest News

  1. China and Russia abusing corona for geopolitics, Lithuania says
  2. Worries on Europe's infection surge, after six-week drop
  3. EU wants large firms to report on gender pay-gap or face fines
  4. EU Commission cannot hold Frontex to account
  5. Orbán leaves EPP group - the beginning of a long endgame
  6. 'Corporate due diligence'? - a reality check before EP votes
  7. Austrian ex-minister joins list of EU's pro-Kremlin lobbyists
  8. Internal Frontex probe to deliver final report this week

Join EUobserver

Support quality EU news

Join us