EU minimum wage initiative – Fair wages and strengthening collective bargaining

The proposal of the European Commission on the minimum wage, which has been announced for 28 October 2020, is greatly anticipated. Within the scope of the events, Nicolas Schmit, the Commissioner for Jobs and Social Rights, once again declared his intention to present a binding directive (and not only a proposal). The Commission would not be concerned with introducing a uniform minimum wage or with the harmonisation of national systems, but with common European standards, for example with a view to the adequacy, scope or social partner participation. The German and the subsequent Portuguese Presidency also confirmed within the scope of the current events their commitment to such a legal act. The European Trade Confederation (ETUC) too supports a framework directive, which, however, has to fulfil certain minimum criteria, which, in particular provide for a double minimum threshold value of 60 % of the median wage and 50 % of the average wage and support the strengthening of collective bargaining. Such a proposal could have a positive impact on many workers in Europe: in 21 Member States, the minimum wage is currently below 60 % of the median wage.

Fight against poverty: European standards for a guaranteed minimum income

Currently 22 % of the European population are living with the risk of poverty or social exclusion. One only needs to look at this high proportion for the need to act to become obvious. In addition to the European minimum wage initiative, the German Presidency has also put the minimum income issue at the agenda and plans appropriate Council Conclusions. The objective is to lay down Europe-wide principles for a guaranteed minimum income through a framework directive. In a joint event with AK EUROPA, the German Trade Union Confederation (DGB) had already presented its ideas for such a legal act last year. It is also be welcomed that the responsible Commissioner Nicolas Schmit intends to take up the proposal and announced the presentation of a Commission proposal.

Improvements for cross-border workers

The Coronavirus crisis has placed the increased vulnerability of posted workers, cross-border commuters and seasonal workers in the spotlight, thereby making existing shortcomings more visible. Thus, stakeholders demand better access to information for cross-border and temporary workers. To ensure this, stakeholder recommendations would include setting up a transnational advisory board with social partners and migrant organisations. Apart from that, Member States shall be obliged to provide information in all relevant languages and to make it accessible via an App and a homepage in the native language. The Federal Minister of Labour and Social Affairs Hubertus Heil emphasized the importance of more consequently implementing existing regulations against wage and social dumping (such as the Posting of Workers Directive) and to exhaust the potential of the European Labour Authority (ELA). The Rumanian Minister of Labour and Social Protection, Violeta Alexandru, also stressed the great need for action.

No lost generation!

The forecast for 2020 is an EU average increase of youth unemployment of up to 30 %. Young people are often the first to lose their job in a crisis; this is also due to the prevalence of precarious employment. Stakeholders demanded within the scope of the Conference “Social Europe” that the youth employment programmes had to be linked with mandatory conditions for retaining subsidies for employers. Full access to social security shall be guaranteed and poor quality internships shall be banned. Commissioner Schmit referred to the extended Youth Guarantee and the related proposal the Commission had presented in July.

Next steps

Crucial steps in respect of the Youth Guarantee, the situation of cross-border and seasonal workers and concerning the fight against poverty are expected to be announced at the Social Affairs Council, which is to take place on 13 October 2020. The Commission proposal on the EU minimum wage will be presented on 28 October 2020; it will be debated by the Social Affairs Council in December. Apart from that, an Action plan on the European Pillar of Social Rights will be presented in early 2021 – this will take place during the Portuguese Presidency.

Further information:

BMAS: Conference “Together for #MySocialEurope: More than just crisis management 1. September 2020“

BMAS: Conference Social Europe – Strong together. Interactive online conference 16 September 2020

AK EUROPA: The future in times of Covid-19: Von der Leyen’s State of the Union Address

AK EUROPA: Launch of the German Presidency

AK EUROPA: Free movement of critical workers: regulations in need of improvement

AK EUROPA: No to a “Generation Lockdown”!