Two years after the Commission’s proposal, on Tuesday 4 October the Economic and Financial Affairs Council adopted the EU Directive on Adequate Minimum Wages.
One should be careful about using the word ‘historic’. But, in the case of the Directive on Adequate Minimum Wages in the European Union, it might actually be appropriate.
In this context, please listen to our ETUI podcast between ETUC Deputy General Secretary, Esther Lynch, and ETUI Senior Researcher in the field of collective bargaining, wages and trade unions in Europe, Torsten Müller.
Some highlights from this podcast
ABOUT THE CONSEQUENCES OF THIS NEW DIRECTIVE
Esther Lynch, ETUC Deputy General Secretary
Member States have a strong obligation to promote collective bargaining seriously. For instance, companies who refuse to respect such union rights could not apply for public tenders.
But we have been unable to persuade enough Member States to agree with us on, for instance, banning the process of employers taking money out of workers’ wages whether it’s for water, whether it’s for their lunches, whether it’s for their uniforms or whether it’s for all sorts of spurious practices. We have been able to limit that; though that’s not the same as banning it.
ABOUT THE CURRENT SITUATION IN EU
Torsten Müller, ETUI Senior Researcher
One of the very strong calls of the directive is to promote sectoral bargaining. Only eight countries currently have more than 80% collective bargaining coverage in Europe: Italy, France, Austria, Belgium, Finland, Sweden, Denmark and Spain. In these eight countries, sectoral bargaining is the dominant way of collective bargaining.
There are only six EU countries which do not have any statutory minimum wage: Finland, Sweden, Denmark, Italy, Austria and Cyprus. In terms of the absolute level of the statutory minimum wage, there is a huge variation in Europe; and we can distinguish three groups:
- a large group of 9 countries where the wage is higher than 10 euros (all western and Nordic European countries)
- a small group of two countries (only Spain and Slovenia) at around 6 euros
- a huge group of 12 countries at lower than 5 euros (mostly eastern and central Europe)
ABOUT THE TRANSPOSITION AT NATIONAL LEVEL
Esther Lynch, ETUC Deputy General Secretary
Transposition is two years from now because member states need time to get their laws in place, but we need action now. There is no point in waiting two years before looking at the adequacy of minimum wages given the current cost of living crisis being experienced by workers.
This directive should act as a shield against two extremely damaging decisions done to workers and their unions during the last financial crisis: the first was the decision to reduce wages; and the second was to remove sectoral collective bargaining.
ABOUT THE IMMEDIATE IMPACT
Torsten Müller, ETUI Senior Researcher
This directive is already shaping the debate in terms of adequate minimum wages – as anticipated in Germany with an increase of the minimum wage to 12 euros – and collective bargaining, with the DGB already saying ‘Let’s start with an action plan right now’.
Increasing wages to an adequate level, and in particular minimum wages, secures domestic demand and boosts the economy. This directive is now particularly important because workers on the minimum wage are the ones most affected by inflation.