Towards the introduction of a European minimum wage?

Last week we attended the University of Leuven’s European Policy Conference “Collectively-Agreed Wages in the New European Economic Governance:  alternative views and perspectives”, to debate the role attributed to collectively-bargained wage systems in the European economic governance.

Some researchers debated the introduction of a European minimum wage policy. It was recalled that European Commission President Jean-Claude Juncker, in a speech before the European Parliament, envisaged the introduction of minimum wage in all member states, adjusted to national collective bargaining traditions and economic conditions of each country. A recent study from Eurofound concluded that the introduction of minimum wages set at 60% of the median national wage in all member states would be beneficial for about 28 million workers.

During the discussions, some trade union representatives questioned whether the introduction of minimum wage would undermine collective bargaining and lead to a general decrease of wages – in other terms, a race to the bottom. This hypothesis was challenged by pointing out the example of Belgium; if statutory mimimum wage is set at an adequate level, it leads to raising wages.

Another issue that was raised was the coverage of collective agreements. For example, in 2013 in Portugal the coverage of collective agreements was only equal to 7%. Therefore it was recommended that a European policy to strengthen collective bargaining would also require a European initiative to promote the extension of collective bargaining.

Social Platform is currently looking into what is meant by “adequate minimum wage”, how it should be set in relation to minimum income schemes and what the role of the EU could be in this matter.