The EU's minimum wage directive explained

In Europe everything is becoming more expensive and

wage

s are not keeping up, this means that at the end of the day most of us have less in our pockets than before and this particularly affects low-paid workers who spend a large part of their income. about daily needs like food or energy and the timing for this is really bad because for years workers in Europe have been going through difficult times as their

wage

s stagnated in many EU countries. One of the reasons for this was the rather slow economic development over the last decade. which in turn was due to a misguided austerity policy that completely devastated the labor market prospects for a generation of Europeans, but that is not the topic of today's video, let's just say that things were not going very well for workers with low wages and after a while this message also reached brussels, so in october 2020 the eu commission proposed a new

directive

for adequate

minimum

wages in europe now a year and a half and some negotiations later, The European Parliament and the EU Council, which is where the governments of the member states meet, agreed on a final text agreement for exactly this

directive

.

So what does this directive say? Can we all now enjoy the same European

minimum

wage throughout the EU? No, the EU does not have the power to decree something like this nor would it make much sense based on economic realities. are so different between member states that the directive basically has two main objectives: to ensure a decent level for legal minimum wages and to increase the coverage of collective bargaining First, the directive establishes a framework for how legal minimum wages should be set in each member state that has a legal minimum Wage countries such as Italy, Denmark, Austria, Cyprus, Finland and Sweden, which do not yet have a legal minimum wage, are not required to introduce one, but those that do must ensure now that it is at least 60 percent of the median of the Member States. salary or at least 50 percent of the average salary in the country, most EU countries that have a legal minimum wage are below these thresholds, which means that we can expect some increases in minimum wages and, According to research from the European central bank, this increase in minimum wages is likely to result in somewhat higher wages across the board;

However, the EU cannot force countries to set the minimum wage at 60 percent of the average wage for each worker in the respective countries. Member States still have the possibility to deviate from this guideline and make exceptions, however, they need to have a framework to periodically review the minimum wage to see if it is still adequate and the threshold of 60 defined in the directive provides a good argument for that unions push for higher minimum wages in case the directive wants to strengthen Collective bargaining in the EU Collective bargaining is when unions and business associations negotiate and together determine the working conditions in a certain sector with the idea of guarantee a certain level of protection and a decent salary for all employees in this sector in recent decades.

Fewer employees have been covered by collective agreements, reducing the level of employee protection. That is why the directive on adequate minimum wages also includes the requirement that member states have to make action plans to increase the coverage of collective bargaining in their countries if less than 80 percent of the workforce is covered by collective agreements. Many EU member states, for example Germany, but also many Central and Eastern European countries are below this threshold and will have to draw up action plans to strengthen collective bargaining if these national action plans are actually implemented. end up increasing collective bargaining coverage this measure should help raise wages across the board, not just for minimum wage workers, this is the minimum wage directive in a nutshell, so will you see your governments increase minimum wages tomorrow and announce a national plan to support collective bargaining? the next day probably not, because the directive has not yet finalized the legislative process, although the negotiators of the eu council and the eu parliament have reached an agreement, the agreement has not yet been officially confirmed by the eu council eu and the plenary session of the european parliament. parliament this should be nothing more than a formality even though some governments are very skeptical of this directive, the Danish and Swedish governments have long resisted the directive as they have a labor system without much state intervention and even less intervention of the eu in sweden and denmark trade.

Unions and business associations negotiate almost everything on their own and the fairly high wage level seems to indicate that this works well for them, which is why they resist any interference from the EU that could pose a risk to their model, but their misgivings do not They will be enough to stop him. the directive is approved by the council and once it has been approved, member state governments have two years to implement the directive into their national legislation, only then, in late 2024 or early 2025, will the directive be fully implemented Therefore, the directive does not help you to deal with the price increase that we are currently experiencing only in the medium and long term could lead to an increase in wages