EU minimum wages not always sufficient for workers to be lifted out of poverty

The European Economic and Social Committee (EESC) has adopted an opinion following the European Parliament's request for an exploratory opinion.

The request was made after the Commission announced that it was considering proposing a legal instrument to ensure that every EU worker is entitled to a minimum wage allowing a decent standard of living.

Figures show that about one in ten workers in the EU earn around or below the national statutory minimum wage. In some countries, the existing minimum wage floors are currently not sufficient for workers to be lifted out of poverty by employment alone. The EESC said in the opinion that it remained concerned that poverty in general and in-work poverty were still significant problems in many Member States.

At the same time, it emphasised that high-quality employment continues to be the best route out of poverty.

In its view, fair minimum wages could help reduce poverty among working poor people, combined with person-centred, integrated and active inclusion policies. They could also help meet a number of EU objectives, such as achieving upward wage convergence, improving social and economic cohesion and eliminating the gender pay gap.

Women currently account for the majority of low-wage earners, together with other vulnerable groups, such as older workers, young people, migrants and workers with disabilities. Wages represent payment for work done, and are one of the factors that ensure mutual benefits for companies and workers. They are linked to the economic situation in a country, region or sector. Changes may have an impact on employment, competitiveness and macro-economic demand.

The EESC said that it recognises concerns regarding possible EU action in this area and does not underestimate the complexities of the issues involved. It acknowledges that the Commission will have to adopt a balanced and cautious approach.

It therefore stresses that any such EU initiative must be shaped on the basis of an accurate analysis of the situation in the Member States, and must fully respect the social partners' role and autonomy, as well as the different industrial relations models.

It is also essential that any EU initiative safeguards the models in those Member States where the social partners do not consider statutory minimum wages to be necessary, notably those where wage floors are set through collective bargaining.

When setting statutory minimum wages, timely and appropriate consultation with social partners is important to ensure that the needs of both sides of industry are taken into account. The EESC regrets that, in some Member States, the social partners are not adequately involved or consulted in statutory minimum wage setting systems or adjustment mechanisms.

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Martin Banks

Martin Banks

Martin Banks is a highly qualified journalist with many years experience of working within the EU institutions. He is an occasional, and highly valued, contributor to EU today, writing on a wide variety of issues.

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