How to guarantee in each country a minimum wage ensuring “a decent standard of living”, without this amount necessarily being the same throughout the European Union? Negotiators from the Member States and the European Parliament reached an agreement on common rules on Tuesday 7 June. Among the Twenty-Seven, minimum wages vary greatly, ranging from 332 euros in Bulgaria to 2,202 euros in Luxembourg, according to figures from 2021.
The text provides binding rules for the 21 countries of the European Union that already have a minimum wage in order to encourage its increase, by imposing greater transparency on how to determine it, but it does not set a European minimum threshold uniform. Furthermore, it does not require the introduction of a minimum wage in the six countries which do not have one and where income levels are determined by collective bargaining (Austria, Cyprus, Denmark, Finland, Italy, Sweden).
Sweden and Denmark have warned that they will oppose the text, but that should not prevent its adoption, by a qualified majority of States, at a future Council meeting.
The 21 States concerned “will need to assess whether their existing legal minimum wage is sufficient to provide a decent standard of living, taking into account their own socio-economic conditions, purchasing power” via a basket of goods and services at real prices, as well as “national levels of productivity and long-term development”explains the Parliament in a press release.
Governments can also apply benchmarks, such as “60% of gross median salary” Where “50% of gross average salary”specifies the agreement, which also provides for an increased increase in controls and inspections. “Through this law, we are reducing pay inequality and pushing for the lowest paid workers in Europe to benefit from higher wages”commented the Dutch MEP Agnes Jongerius (S&D, social democrats), co-rapporteur of the text.
The new legislation also intends to strengthen the weight of collective bargaining: States in which less than 80% of the workforce is protected by a collective agreement will be obliged to create an action plan to gradually increase this coverage and involve the social partners more in the regular review of the minimum wage.