A serious bump in minimum wage needed in the EU
Less than 8 months ago [15 July 2014] the President of the European Commission declared before the European Parliament, “I believe it is necessary for all EU member states to put in place a minimum wage and basic guaranteed income. We will take action to achieve that end”. However, it is not sufficient to simply set up minimum wage in the remaining six member states that do not have it; we must also address the adequacy of new and existing wage levels which will require a serious bump in minimum wages. We believe that an adequate minimum wage should guarantee decent living standards to all workers and employees. In order to achieve this, Social Platform has identified three requirements:
- Minimum wage should be higher than what is considered an adequate minimum income. It is unacceptable that many workers in Europe earn less than what we consider to be the minimum income to live a dignified life. For example, in Hungary approximately 25% of the employed population were paid below the official minimum subsistence level in 2013. By setting minimum wages at a higher level than adequate minimum income and other benefits such as statutory minimum unemployment benefits, incentives to work are preserved, and the growing trend of in-work poverty can be stemmed.
- As a general rule, at least 60% of national median wage should be the minimum threshold for minimum wage. 60% truly is the bare minimum. I was astonished last week when reading the Eurostat statistics on minimum wage to learn that there is not a single EU country – for which data is available – where the minimum wage is above 60% of national median wage. If our call is heard, approximately 28 million workers would benefit. While 60% is an important benchmark, its adequacy needs to be tested against real costs and disposable income.
- Minimum wage should be set in a non-discriminatory way and irrespective of contract type, to ensure equal pay for equal work. In some countries, we have seen the introduction of “youth” minimum wage set at a lower level than the standard minimum wage, which hinders access to the labour market for young people. Of those who would benefit from this approach, nearly two-thirds are young people and women. It is also important to ensure that adequate minimum wages are present in all sectors of the economy, particularly those that are notoriously low-paid.
If the Commission stands by the words of its President, we expect the implementation of a strategy to encourage not only the establishment of minimum wage levels in the remaining six member states, but also a commitment among all member states to improve the adequacy of minimum wage.
Pierre Baussand, Director