A huge win for living wages in the EU – what next?

2022 might be the year to set common EU standards to ensure all workers in the EU earn a living wage. Following the European Parliament’s adoption of the report on the Adequate Minimum Wage Directive – which didn’t happen without some drama! – the Parliament, European Commission and Council of the EU embark on the difficult journey of reaching compromises and working towards a single text that works for all.

Before looking into what is at stake, the keen readers among you might want to look at the different positions of the three institutions:

The outcome of the negotiations will determine the extent to which new legislation really can improve the lives of workers. So, what is at stake exactly?

What is considered an ‘adequate’ minimum wage?

Comparing the positions of the three institutions, it is safe to say that finding middle ground on how to define ‘adequate’ is not going to be an easy task. So far, the strongest position is held by the European Parliament, which asks each country to look at the cost of goods and services, the poverty level and existing wage levels to determine what constitutes an adequate’ wage. In strong contrast, the position of the Council gives a lot of leeway to Member States and lets them determine adequacy using whatever criteria works best in their national context.

Why is this dangerous? Not using criteria like current wage levels, poverty rates and the cost of living carries the strong possibility that wages still won’t be set high enough for workers and their families to make ends meet.

Who can receive an adequate minimum wage and who might be excluded?

Current rules around wages mean that countries can give a worker less pay because of things like age or having a disability. In policy-speak, we call this ‘variations and deductions’. Earlier this year we heard from people who’ve experienced this first-hand, including a young worker in the Netherlands who told us how workers below the age of 21 only earn half of what people aged 21+ earn. It’s hard to see how this is fair, considering they’re still charged full price for tax, rent and groceries.

The positions of the Parliament, Commission and Council differ majorly on this point. The Council leaves decisions on variations and deductions to the discretion of Member States, as long rules respect non-discrimination rules. In contrast, the European Parliament deleted all mention of variations and deductions from its position, preferring to follow the mantra of “equal pay for equal work”.

Together with our members and partners, we will continue to follow negotiations closely and urge EU decision-makers to agree on an ambitious text to end in-work poverty.