The long-awaited proposal for a directive on adequate minimum wages in the European Union was finally published last Wednesday. While it is undoubtedly an important step in the right direction it is not the silver bullet which will deliver fair wages for all workers in the EU. The way to reach fair pay is more complicated and will require further improvements of the directive for which trade unions will continue to fight.

However, the proposal highlights what the trade unions see as a crucial condition for higher wages – collective bargaining coverage. Article 4 requires from member states to “take action to promote the capacity of social partners to engage in collective bargaining on wage setting, and to encourage constructive, meaningful and informed negotiations on wages”. What is more, it stipulates that member states where collective bargaining coverage does not reach 70% of the workers should come up with “a framework for collective bargaining and establish an action plan to promote collective bargaining”. In practice this provision applies to at least 15 out of the 27 EU member states according to the 2019 ETUI’s Benchmarking Working Europe report – our yearly publication giving an overview on the state of Social Europe. It is worth noting that this coverage has decreased in the years of the financial and economic crisis, above all due to the policy choices that were made in the context of austerity, which were partly encouraged at the European level. But, more generally, the trend in collective bargaining has been a downward one since the ‘80s. According to our forthcoming Benchmarking report which will be launched on 2 December, the number of employees covered by a collective agreement in EU27 has dropped from 73% in 2000 to 61% in 2018. This clear decline of collective bargaining coverage in the majority of EU countries (cfr Benchmarking 2019) demonstrates the need for political support in cases where trade unions are not strong enough (anymore) to ensure extensive bargaining coverage. In this sense this Directive is a very welcome step in the right direction, as it was also the case with the commitment made in the EPSR to encourage the collective bargaining actors “to negotiate and conclude agreements in matters relevant to them, while respecting their autonomy and the right to collective action” (Principle 8).  

Higher minimum wages are crucial to lift working people out of poverty, especially in the current context shaped by the pandemic and the economic crisis coming with it. This time around we should know better and not repeat the same mistake as during the previous crisis when collective bargaining was undermined by austerity for the sake of wage decentralisation and ‘flexibility’. Fair wages have to be an important element of Europe’s recovery strategy if the latter is to succeed.

 

Photo credits: nito100