A European minimum wage policy - back on the agenda

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1 A European minimum wage policy - back on the agenda Torsten Müller (ETUI) & Thorsten Schulten (WSI) EPSU Collective Bargaining Conference 2015 Brussels, January 2015

2 European minimum wage policy Back on the agenda As a son of a steelworker as well as later on the Prime minister of Luxembourg I have always supported an equitable minimum wage. ( ). That every work should be adequately remunerated is for me part of my fundamental Christian-social conviction. I see with satisfaction that today the majority of the 28 EU member states has national minimum wages. As president of the European Commission I will advocate that all member states introduce a minimum wage adjusted to national collective bargaining traditions and economic conditions. Key messages for EP election 2014

3 European Parliament on European Minimum Wage Policy 2007: Firmly believes that a decent living minimum wage should be established at Member State level in cooperation with the social partners but recognises that in many Member States the minimum wage is set very low or at below subsistence level : Calls on the Council to agree an EU target for minimum wages (statutory, collective agreements at national, regional or sectoral level) to provide for remuneration of at least 60% of the relevant (national, sectoral, etc.) average wage and, further, to agree a timetable for achieving that target in all Member States. 3

4 Minimum Wage Regimes in Europe Universal Regimes: Common national minimum wage as an universalistic wage floor Sectoral Regimes: Minimum wages only for certain sectors or occupations Law Western Europe: FR, LU, NL, IE, UK, DE Southern Europe: GR, MT, ES, PT Eastern Europe: BG, CR, CZ, HU, LV, RO, SI, TR, CY Collective Agreement Western Europe BE Eastern Europe: EE, LT, (PL, SK) Northern Europe: DK, FI, NO, SE Western Europa: AT, CH, IT

5 Collective Bargaining Coverage and National Minimum Wages ( )* Universal Minimum Wage Regimes (National Minimum Wage) Sectoral Minimum Wage Regimes (No National Minimum Wage) AT BE SI FR SE FI DK IT NL NO ES EL DE LU MT CH CY IE CZ SK HU PT UK PL EE LV RO BG US LT Source: ICTWSS Database (Version 4.0), national Sources * most current data

6 National Minimum Wages in Europe (per hour, in Euro, January 2015)

7 National Minimum Wages in Europe (per hour, in PPS, January 2015)

8 Relative Level of Minimum Wages Minimum wage in % of median wage, 2013 FR SI PT HU LT BE DE* PL RO LV IE NL SK EL ES LU EE CZ Nordic Countries: 60%-70% * On the basis of a fictive minimum wage of 8.50 Euro per hour; Source: OECD, Bundesagentur für Arbeit

9 Minimum Wages in Europe All minimum wages are below the official low-wage threshold (66% of median wage) Many minimum wages are even below the poverty threshold (50% of median wage) Most minimum wages in Europe are set at a rather low level

10 Relative Level of Minimum Wages Minimum wage in % of median wage, 2013 FR 61 SI 61 PT 56 HU 54 LT 52 BE 50 DE* 50 PL 50 RO 50 LV 48 IE 48 NL 47 SK 46 EL ES LU EE Poverty threshold 50% Low-pay threshold 66.67% CZ

11 Reference points for a European minimum wage policy Fair or decent wage European Social Charter Council of Europe At least 60% of the average net wage UK Living wage concept based on costs of a basket of goods and services needed to maintain a safe and decent standard of living enabling the individual to participate in social and cultural life Consideration of income distribution 60 per cent of the median wage

12 Normative Foundations for the Determination of Minimum Wages Council of Europe: European Social Charter 1961 The right to a fair remuneration the right of workers to a remuneration such as will give them and their families a decent standard of living. (Part I, Article 4) 12

13 UK Living Wage Approach London Living Wage: 9.15 NMW = 6.50; 41% higher Living Wages UK: % higher than NMW approx. 60% of national Median

14 Limits and pitfalls of a European minimum wage approach Minimum wage as percentage of a low median wage is still a low wage What happens when the wage floor collapses? Can employers use a European minimum wage standard to bring down collectively agreed wages? Do European politicians get competences in the setting of minimum wages? 14

15 15 Implementation of a European minimum wage policy EPSU Policy Document Tackling low pay (2006): Where statutory minimum wage rates are already in place the aim would be to consider a campaign for increases to bring the rate up to 60% of national median earnings in each country. In terms of collectively agreed minimum rates in the public services, the target set would be higher. The campaign should also focus on extending the coverage of collective agreements..

16 Workers with a wage below 60% of national median wage (2010) About 28 Mio. Workers might profit from a European Minimum Wage Policy!!! Source: Eurofound DE LT LV EE UK IE LU CY PL RO EU AT ES MT NL SI BG HU CZ GR BE DK IT FR PT SK FI SE

17 Minimum wage is a political wage!!! Dr. Thorsten Schulten

18 WSI Minimum Wage Database Current Minimum Wage Data from 31 Countries! Available in English!

19 Thank you very much for your attention!!! Dr. Torsten Müller Dr. Thorsten Schulten ETUI WSI Bld. du Roi Albert II, 5 Hans-Böckler-Straße Brussels Düsseldorf Belgium Germany

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