Momentum is building behind a European minimum wage policy, a topic which is expected to play a significant part in the 2019 European Parliament elections. Pressure for a European pay floor is part of a growing debate over the role of minimum wages for the concept of Social Europe.
The German government has indicated that one of its priorities during its EU Council Presidency in the second half of 2020 will be exploring prospects for a European minimum wage policy. The move is strongly backed by the German Green party, Die Linke (Left Party) and the German Trade Union Confederation (DGB).
A European minimum wage is also the official policy of the ETUC. The ETUC’s Executive Committee adopted a policy for “common strategy on low and minimum wages in 2017. It argues that the European internal market should support the social objectives of the EU and this requires a common strategy on minimum wage floors at the European level. The ETUC backs adoption of the common target of 60% of national average or median wages.
Advocates of a European minimum wage argue that ‘Living Wages’, defined as a fair wage sufficient to allow for a decent existence, should constitute a basic social right, and point out that this has already been included as one of the 20 basic principles of the ‘European Pillar of Social Rights. Article 6 of the pillar argues that ‘Workers have the right to fair wages that provide for a decent standard of living.’
A recent report by the German-based Institute of Economic and Social Research (WSI) shows that in 2018 minimum wages in European countries continued to grow dynamically. However, the report also shows that despite the more dynamic growth in recent years, in the majority of EU countries statutory minimum wages are still far below the threshold of 60% of the national median wage; providing further evidence for the need of a common European minimum wage policy. The WSI report’s authors, Thorsten Schulten and Malte Luebker, argue that a European minimum wage would support the efforts of many national governments that are trying to increase their domestic minimum wages to ensure a decent standard of living for low paid workers, but may face resistance from businesses worried about losing competitiveness.
The ETUI has been advocating a European minimum wage for some time. The ETUI’s recent book on the topic, ‘Wage bargaining under the New European Economic Governance’, co-edited by Guy van Guyes and Thorsten Schulten, examines the prospects and obstacles that exist to its implementation. Torsten Muller, ETUI senior researcher and one of the contributors to the volume, argues that upward convergence in wages that would result from setting the floor at a realistic level could help to foster the demand-led economic expansion that Europe needs. A European minimum wage policy would be an important element of a reorientation towards a more expansive and solidaristic wage policy.