European Commission Proposed An EU Directive To Ensure That Workers Are Protected By Adequate Minimum Wages

European Commission Proposed An EU Directive To Ensure That Workers Are Protected By Adequate Minimum Wages

On Wednesday, the European Commission (EC) proposed an EU directive to ensure that workers in the European Union are protected by adequate minimum wages to enable a dignified life in any sector. The Commission recalled that if minimum wages are set at an appropriate level, they have a positive social impact and also bring wider economic benefits, as they reduce wage inequality, help maintain domestic demand and strengthen work incentives.

Remuneration differences

In addition, an adequate minimum wage can help reduce the gender pay gap, as more women than men receive the minimum wage. At the same time, the EC proposal helps to protect employers who pay decent wages to workers by ensuring fair competition. The proposal for a directive is also based on the current corona crisis, which has particularly affected sectors with a higher proportion of low-paid workers, such as cleaning services, retail trade, healthcare and long-term care and accommodation services. According to EC head Ursula von der Leyen, the minimum wage framework fully respects the national traditions and freedoms of the social partners. "It is important that low-wage workers also benefit from the economic recovery. With this proposal, we want to make sure that workers in the EU have a decent income wherever they work. The social partners have a crucial role to play in national and local wage negotiations," Valdis Dombrovskis, EC's executive vice president for economics working for the people, explained the situation. "We support their freedom to negotiate autonomously and, if this is not possible, we provide a framework to help Member States set minimum wages," Dombrovskis added.

Minimum wages lagged

EU Commissioner for Jobs and Social Rights Nicolas Schmit has pointed out that almost 10% of workers in the EU live in poverty. "People who have jobs should not have difficulty making a living. Minimum wages must match other wages that have risen in recent decades, while minimum wages have lagged behind it," Schmit said, adding that collective bargaining should be gold standard in all EU Member States. Minimum wages exist in all EU Member States. As many as 21 countries of the Union have statutory minimum wages, and in six Member States (Cyprus, Denmark, Finland, Austria, Sweden and Italy) the protection of the minimum wage is ensured exclusively by collective agreements. However, in most Member States, workers are affected by inadequacy or shortcomings in the protection of the minimum wage. The proposed directive establishes a legal framework to improve the adequacy of minimum wages and workers' access to minimum wage protection in the EU. The EC proposal respects and reflects the competences of the Member States and the autonomy and contractual freedom of the social partners in the field of wages. It does not oblige Member States to introduce statutory minimum wages, nor does it set a common minimum wage level.