Brussels (dpa) – EU countries and the European Parliament agreed on uniform standards of the minimum wage in the European Union.
According to the chief negotiator in the European Parliament, Dennis Radtke (CDU), the compromise includes standards for setting, updating and enforcing statutory minimum wages. In addition, the bill stipulates that EU countries must define action plans to increase collective bargaining coverage if this figure drops below 80 percent, it said Tuesday. The lives of millions of workers will improve significantly.
EU countries announced that statutory minimum wages should be updated at least every two years in the future. The exceptions are countries that use automatic indexation – for example, where wages increase automatically with inflation. The period here is four years. According to the information, social partners must be involved in the procedures for setting and updating the minimum wage.
Both sides have yet to formally confirm the compromise. EU countries then have two years to transpose the directive into national law.
Hubertus Heil set the target of 80%. as an ambitious plan. “However, we have instruments that make it possible – such as the federal law on compliance with collective agreements, so that public procurement goes to companies paying collective wages,” said an SPD politician on the sidelines of the OECD meeting in Paris. “The value of work in particular must be valid across Europe: everyone who works must be able to live off it reasonably – this is the case in Stockholm and Lisbon, as well as Berlin and Bucharest.”
In Germany, it was recently decided that from October 1 the minimum wage should rise to twelve euros. Germany already has one of the highest minimum wages in the EU. According to information from the Federal Statistical Office and the Federal Ministry of Labor, it is only in Luxembourg that it is higher. However, the coverage rate for collective bargaining in the Federal Republic – i.e. how many workers benefit from collective bargaining – is well below the 80 percent target currently being pursued. According to the Federal Statistical Office, Germany had 44 percent in 2019.
In October 2020, the European Commission has already presented the bill. With the deal reached, there was the challenge that the EU treaties set narrow boundaries: the European Union may not set specific wage levels, but only issue guidelines. This is one of the reasons why especially the Scandinavian countries, which do not have a statutory minimum wage but have a relatively high collective bargaining agreement, were critical. They fear that Brussels will interfere too much in national affairs.
criticism from employers
Danish Labor Minister Peter Hummelgaard was disappointed in the negotiations. There is no doubt that Denmark never wanted EU law on the minimum wage. The minister said that the currently negotiated agreement will be carefully scrutinized. German employers president Rainer Dulger also criticized: “European criteria for the adequacy of national minimum wages will continue to dangerously politicize wage setting.” He called on Germany to vote against the proposed law.
On the other hand, the Greens praise: “Many citizens struggle to make ends meet and therefore this agreement must translate into higher wages as soon as possible,” said Katrin Langensiepen, vice-president of the Employment and Social Affairs Committee in the European Parliament.
The European Parliament was unable to negotiate with the demand that the minimum wage should be set on the basis of average values. “We now have a glass of Cola, but with taste,” said Radtke. You give a very clear recommendation to EU countries. This means that minimum wages are fair and equitable as long as they reflect 60 percent of the median income and 50 percent of the median income.
The median is also known as the average wage and is an arithmetic variable: 50 percent of workers earn more, 50 percent less. According to the Ministry of Labor, the minimum wage of 12 euros is EUR 2,064 – for comparison: half of the average wage in Germany is around EUR 1,988, 60 percent of the median is around EUR 2,056.