Italian workers in Aarhus, Denmark. Denmark does not have minimum wages, so these workers must work on conditions established via collective bargaining between trade unions and employers’ association./ Nick Tsirabidis)

A proposal to implement statutory minimum wages in all the EU member states has gained support from the commission. But the issue is dividing, since the many different member states have different ways of setting wages, and some do not want legislation.

By Nick Tsirabidis and Eskild Bang Heinemeier

Every country in the European Union should have minimum wages. Such is part of a proposal set forth in January by Portuguese member of the European Parliament Maria João Rodriguez, calling for statutory minimum wages in all EU member states.

A commendable proposal, and the commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen as well as the president of the commission Jean Claude Juncker, have expressed support of it.

But not all are enthusiastic about it.

Different traditions
The big issue here, is that the member states have very different approaches to the settlement of wages. Whereas a lot of countries -as mentioned- have statutory minimum wages, six member states do not. These are Cyprus, Austria, Italy and the three nordic countries Denmark, Sweden, and Finland.

The basic difference is, that instead of having a minimum wage set by law, the wages are set by collective bargaining between trade unions and the employers associations, and with a minimum involvement of the government.

This model, with some variations, is the way of operating in the six countries, that do not have statutory minimum wages.

According to Danish member of the European Parliament and member of the Social Democrats Christel Schaldemose, this model is very successful in the Scandinavian countries and has been so for a long time. Therefore it should not be changed, and each member state should keep it’s own way of setting wages.

“I do not want the commission to decide upon a minimum wage in Denmark, because that would be to change the Danish model. But I think it is important to put a pressure on each member state to focus on lifting the marginalised citizens in their country, otherwise you don’t get a fair competition in the internal market,” says Christel Schaldemose.

ETUC is the trade unions umbrella organisation in the EU and a key player in the lobbying battlefield in Brussels, where more than 10 thousand lobbyists live and work. For them the stance is pretty much the same. Though the goal is to ensure highest minimum wages possible, each member state should keep their own way of working.

“We want to work on the minimum wage flows to make it increase faster than higher wages. But introducing statutory elements for minimum wages for all European countries would not be respecting the traditions of all the countries in the Union.” says Marco Cilento, an advisor in ETUC.

Newly changed ways
However, it seems that the model of collective bargaining is challenged. According to Marco Cilento this is especially the case with Italy, where efforts to reform the bargaining procedure are in progress.

Two years ago, in january 2015, Germany implemented laws on minimum wages. This happened because the collective bargainings had failed for too long, and there was an increasing number of so called working poor, people who are very poor despite having jobs.

Mr Cilento states that the introduction of statutory minimum wages did have concrete improvements for many people, although 8,93 € pr. hour (check) is still a very low wage in the German economy.

But he also states that:

”A statutory minimum wage is a good way to fight against exploitation and poverty. But it cannot avoid the strong globalisation of the labour market.”

Christel Schaldemose also acknowledges that the Danish model is to some extent challenged by the European internal market.

“The Danish model is very viable, but there is obviously a tendency in Europe to think ‘one size fits all’,” she says.

The commission treads lightly
President of the European Commission, Jean Claude Juncker, addressed the issue in January by saying that all European countries should have a minimum wage set. This falls in line with the speech he gave in parliament on March 1st, where he spoke of the need for focus on the social aspects of the European Union.

The commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen also spoke on the issue in January, encouraging the member states to implement legislation on minimum wages.

Elaboration on the matter was scarce though. When asked why she would give such a statement now, the commissioner’s office replied the following by e-mail:

”The Commission encourages the principle of a minimum wage in all Member States, as it is one of the means to ensure dignity for workers, fight against social dumping, and overall, to stimulate upwards social convergence between EU Member States.”

Hereby addressing the social aspects that the Union needs to deal with. But she also states:

“However, the minimum wage and wage-setting mechanisms belong to the competence of the Member-States, and they cannot and should not be the same in all EU countries.”

This has to do both with the Commissioner’s respect to national sovereignty but also with how the European Union works: after thorough research, the Commission proposes legislation to the European Parliament who gets called to vote on it. The voting has to be approved by the Council of Europe which is made of the 28 Heads of State. The Commission’s role is purely advisory and it cannot take binding decisions or enforce policy on the member states( even though it has the right to impose fines on member states for failing to comply with EU legislation and commitments).

The proposal, which was approved by the parliament, is not a law, but merely a call for the Commission to work on measures and political action and policies to protect workers and job seekers in the European Union.

The issues are addressed in a report regarding conditions for workers and unemployed citizens in the EU member states, with MEP Maria João Rodriguez as the rapporteur, and published by The Committee of Employment and Social Affairs.

The minimum wages in the EU member states in €/month. Sweden, Finland, Austria, Cyprus, and Italy do not have statutory minimum wages (source: Eurostat)