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In the European Union, the minimum wage varies from 1 to 7

The idea of ​​a Europe which would not only be united but also unified in all respects is not yet a reality. Witness, the minimum wage. Not only do some Member States not even have it in place, but among the 21 that have it, the differences in remuneration are significant. This is revealed by the figures published this Friday by Eurostat, the European Statistical Institute, which measured the differences in minimum wages between each of the countries of the European Union: between the country which pays the highest minimum wage (the Luxembourg) and the lowest bidder (Bulgaria), the difference varies from 1 to 7.

Mobilization for “decent wages”, a priority of the French presidency

The question of the working poor has preoccupied Brussels since October 2020, when it initiated a draft directive on low wages in order to improve the lot of the worst-off employees.

“Living wages are an essential component of the European social market economy model. Convergence between Member States in this area contributes to the promise of shared prosperity in the Union”, write the authors of the proposal. October 2020 (see bottom of article).

The text, currently being examined by the European Parliament and the Member States, is one of the priorities of the French presidency of the Council of the EU, which hopes to have it adopted before the summer.

In purchasing power parity, the gap is reduced from 1 to 3

As of January 1, 2022, among the 21 EU countries that have a minimum wage, thirteen are below the threshold of 1,000 euros per month (before tax and social security contributions). The lowest are recorded in Bulgaria (332 euros per month), Latvia (500) and Romania (515), the European statistics office said in a press release.

Only six countries have a Minimum gross monthly salary above 1,500 euros, the highest being in Luxembourg (2,257), Ireland (1,775) and the Netherlands (1,725). Germany (1,621) and France (1,603) come just behind Belgium (1,658).

minimum wages, EU, histogram

The gaps narrow significantly once the differences in the cost of living between countries are taken into account. In purchasing power parity, the minimum wage is evaluated at 604 euros in Bulgaria, against 1,707 in Luxembourg, which is still a difference of 1 to 3.

The Brussels draft directive provides rules to promote the increase of minimum wages where they exist, but does not set a uniform European threshold. Nor will it require the introduction of a minimum wage in the six EU countries that do not have one (Austria, Cyprus, Denmark, Finland, Italy, Sweden).

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Excerpt from the introduction to DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on adequate minimum wages in the European Union (28.10.2020)

“Ensuring that workers in the Union receive decent wages is essential to guarantee decent working and living conditions, as well as to building just and resilient economies and societies, in line with the United Nations Sustainable Development Agenda towards 2030 and its Sustainable Development Goals Living wages are an essential component of the European model of a social market economy Convergence between Member States in this area contributes to the promise of shared prosperity in the world ‘Union.”

(Source: European Commission, PDF format, 19 p.)

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THE DRAFT DIRECTIVE (Extract)

The European Commission adopted a proposal for a directive on adequate minimum wages on 28 October 2020. The proposal aims to establish a framework to improve the adequacy of minimum wages and increase workers’ access to minimum wage protection.

In all Member States, the Commission’s proposal aims to promote collective bargaining on wages and to improve the application and monitoring of the minimum wage protection established in each country.

In Member States applying a statutory minimum wage, the proposal also aims to

  • put in place the conditions for statutory minimum wages to be set at adequate levels: clear and stable criteria for setting the minimum wage, indicative benchmarks to guide the assessment of adequacy, regular and timely updates of minimum wages and creation of consultative bodies notify the competent authorities;
  • minimizing the use of minimum wage variations and deductions;
  • ensure the effective participation of the social partners in setting and updating the legal minimum wage.

(Source: European Commission)