Minimum wage directive: fighting poverty and inequality

ETUC logo Fair Minimum Wages 2021

(24 March 2021) On 2 March, the ETUC ran the latest in a series of webinars highlighting the importance of the draft directive on adequate minimum wages and what changes are needed to strengthen it.

The first contribution was an inspirational story from US trade union activists about the Fight for 15 – the campaign to secure a minimum wage of $15 an hour – in Seattle. Nicole Grant, from the Martin Luther King – Labor campaigning organisation pointed out how this fight had radically changed the US labour movement and the way people think about minimum wages. Her colleague Rigoberto Valdez highlighted the importance of an adequate minimum wage and how Seattle's fight has started a national movement that is spreading across the country.

There were then contributions from trade unionists from several different European countries that discussed how a strong and effective minimum wage directive could make a major difference to hundreds of thousands of workers. From the Netherlands to Bulgaria and from Ireland to Poland, national trade unions are looking for a directive that will help deliver a fair share of national income, highlighting the inadequacy of current minimum wages to cover daily needs.  In the Netherlands, some 70% of people and most political parties support the need for an acceptable minimum wage (14€/h), however, there have been no significant improvements in this direction and the minimum wage remains at 10€ an hour.

Vanya Grigorova from the Podkrepa trade union confederation in Bulgaria underlined the importance of establishing a decent minimum wage as a basic human right and, in line with ETUC policy, challenged the inclusion of productivity as a criterion in setting minimum wages.

Torsten Müller, from the ETUI research institute, highlighted how the European Commission had taken steps in the right direction in recognising the importance of EU action to guarantee adequate wages and appeared to be taking a different approach to economic recovery this time round, in contrast with the previous crisis in 2008-2009 when it was quick to push austerity.

The ETUC is calling for the directive to set a double minimum threshold for statutory minimum wages of at least 60% of the national median wage and 50% of the national average wage. Only statutory minimum wages in France and Slovenia currently satisfy these criteria and the ETUC estimates that implementation of this double threshold will increase pay for around 24 million workers.

The ETUC stresses that the double threshold is not a target but a minimum below which statutory minimum wages should not fall. Any target should be set higher. As data from Bulgaria shows the actual level of the minimum wage there is 610 lev and a minimum wage set at 50% the national average would be only 683 lev whereas a living wage calculated on a basket of goods and services would be 1214 lev.

The ETUC has published a lot of background information that can be helpful for trade unions’ lobbying and campaigning work including material on collective bargaining and the right to organise which the ETUC regards as essential elements of a directive on adequate minimum wages.

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