According to President von der Leyen of the European Commission, work no longer pays for too many people. At the end of last year, she promised to come up with a bill to restore the dignity of paid work. ‘Almost 10 percent of workers in the EU live in poverty. That has to change, ‘said Commissioner Schmit (Jobs and Social Rights) on Wednesday afternoon at the presentation of the proposal.
The Commission proposes that EU countries draw up criteria that clarify how the level of the minimum wage is determined, what the standard is, what can be paid from it (purchasing power) and that ensure that the minimum wage does not lag behind a country. Member states must report on this annually in Brussels to put pressure on the boiler.
Von der Leyen and Schmit emphasize that their ‘social framework’ does not set minimum wage levels in Member States and fully respects the freedom of trade unions and employers to negotiate collective agreements. Earlier this week, European trade unions demanded that the Commission set a standard for the minimum wage: at least 60 percent of the average wage in a country.
Infringement of freedom
Concerned EU officials predict that both trade unions and European employers will react critically to the Commission proposal. They also doubt whether it will ever be approved by the Member States and the European Parliament. Northern Member States such as Denmark, Sweden and Finland see it as an infringement of their freedom to set much higher wages. The southern member states would like more, while countries like Poland, Bulgaria and Romania do not want their competitive advantage to be lost from comparatively low wages.
In the EU, 21 countries have a legal minimum wage (including the Netherlands), in 6 Member States the minimum is set by collective labor agreements. Bulgaria has the lowest minimum wage (1.87 euros per hour), Luxembourg the highest (12 euros per hour). Purchasing power depends on the cost of living in the countries concerned. The Commission says that ‘in the majority of Member States’ workers face inadequate minimum wages and insufficient access to all associated rights, such as holiday pay. According to the Commission, 8.3 percent of workers lived in poverty in 2007, compared to 9.4 percent in 2018. The corona crisis is exacerbating the situation. “People who work shouldn’t have to mess around to make ends meet,” said Commissioner Schmit. The Commission wants collective bargaining to become the ‘gold standard’ in the EU because in countries where collective wage agreements are the rule, minimum wages are higher.
Schmit thinks the Commission proposal will create ‘positive dynamics’ in wage setting. And I mean upward convergence. The idea is not to lower minimum wages. ‘
From commissaris understands the disappointment of trade unions but points out that the European Treaty gives the Commission little power to interfere with workers’ wages. ‘With what we are now proposing, we are stretching our powers to the maximum. So I am not disappointed, I am realistic. Our message is clear: the Commission is concerned about the people at the bottom of society. ‘
Living on 45 euros a day makes the call of Northern Europe big
In 2018, our Italy correspondent Jarl van der Ploeg paid a visit to Katya Di Maria, who had to live on 45 euros a day with her husband and eight children.
Research in the Netherlands: Higher minimum wage does not cost jobs (if social assistance is disconnected)
If the minimum wage is increased by 5 percent, 18 thousand jobs will be lost. That loss is much smaller than expected. If the minimum wage is increased without social assistance rising, the job loss is nil. This is the conclusion of the Central Planning Bureau in a study.
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