European Minimum Wage Policy Possible Contours and Arguments

European Minimum Wage Policy Possible Contours and Arguments Thorsten Schulten (WSI) Torsten Müller (ETUI) Line Eldring (Fafo) European Policy Conference: Collectively-Agreed Wages in the New European Economic Governance Alternative views and perspectives Brussels, 19 February 2015

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. Jean-Claude Juncker, Key messages for EP election 2014

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.. 2008: 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

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

Collective Bargaining Coverage and National Minimum Wages (2011-2013) 120 100 99 98 96 93 Universial Minimum Wage Regime (National Wage Floor) 80 89 88 84 83 80 67 67 Sectoral Minimum Wage Regime (No National Wage Floor) 60 61 58 54 52 50 40 42 40 35 35 33 32 30 30 20 24 20 18 13 11 0 BE AT FR FI SE SI NL DK IT NO ES MT DE LU CH CY CZ EL RO SK PT IE BG UK HU EE PL LV LT

Collective Bargaining and Statutory Minimum Wages Most countries with sectoral minimum wage regimes have a high bargaining coverage In countries with weak collective bargaining the statutory minimum wage is a core institution to influence overall wage developments In countries with strong collective bargaining the statutory minimum wage is of limited importance. It effects only a small number of workers nor covered by collective agreements

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

Relative Level of Minimum Wages Minimum wage in % of median wage, 2012 Nordic Countries: 60%-70%

Relative Level of Minimum Wages Minimum wage in % of median wage, 2012

National 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

Normative Reference points for a European minimum wage policy European Social Charter / Council of Europe Fair or Equitable Wage 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% of the Median Wage

European Social Charter (1961) Council of Europe 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)

UK Living Wage Concept: London Living Wage: 9.15 NMW = 6.50; 41% higher Living Wages UK: 7.85 21% higher than NMW approx. 60% of national Median

Obstacles to a European minimum wage policy No common position among the European Trade Unions Nordic skepticism against the concept of (statutory) minimum wages EU competences on wage setting (Legal) opportunities for implementation? Soft law: European Semester Hard Law: Directive

Proportion of workers with a wage below 60% of the median wage (2010) About 28 million workers could profit from a European Minimum Wage Policy! Source: Eurofound 2014

WSI Minimum Wage Database Current Minimum Wage Data from 30 Countries! Available in English! http://www.boeckler.de/wsi-tarifarchiv_44064.htm