The European Commission presented a directive on Wednesday to “ensure that EU workers are protected by adequate minimum wages that allow a decent life wherever they work.” According to the Community Executive, “when set at adequate levels, minimum wages not only have a positive social impact, but also generate broader economic benefits, since they reduce wage inequality, help to sustain domestic demand and strengthen incentives to work. An adequate minimum wage can also help reduce the gender pay gap, as more women than men earn a minimum wage. ”
Brussels acknowledges that the current crisis “has particularly affected sectors with a higher proportion of low-wage workers, such as cleaning, retail, health and residential care. Ensuring a decent life for workers and reducing their poverty does not it is only important during the crisis, it is essential for a sustainable and inclusive economic recovery. ”
In recent decades, low wages have not remained at the same level as other wages, and worker poverty has increased, according to the European Commission, with data prior to the pandemic: “Workers poverty increased from 8, 3% in 2007 to 9.4% in 2018 in the EU.Wage inequality has also increased largely due to increasing polarization in the labor market (declining employment in medium-paying or medium-skilled occupations) and a simultaneous increase of low- and high-paying occupations, along with the decline in collective bargaining. ”
When set at appropriate levels, minimum wages guarantee a decent life for workers, help sustain domestic demand, strengthen incentives to work, and reduce poverty at work and wage inequality. Since more women than men earn the minimum wage, minimum wages also help reduce the gender pay gap. This proposal brings benefits to companies that pay decent wages to their workers, by guaranteeing fair competition.
Minimum wages exist in all EU Member States. There are 21 countries that have minimum wages fixed by law and another six (Denmark, Italy, Cyprus, Austria, Finland and Sweden) in which the protection of the minimum wage is provided by collective agreements.
However, “in most Member States workers are affected by insufficient adequacy or by gaps in the coverage of minimum wage protection,” explains Brussels: “In light of this, the proposed directive creates a framework to improve the adequacy of minimum wages and for workers’ access to minimum wage protection in the EU “.
The Community Executive insists that it “fully respects the principle of subsidiarity”, in the sense that it “establishes a framework for minimum standards, respecting and reflecting the competences of the Member States and the autonomy and contractual freedom of the social partners in the field of wages. It does not oblige member states to introduce legal minimum wages, nor does it establish a common minimum wage level “.
The European Commission also sets itself the “objective” of “promoting collective bargaining of wages in all Member States”. Why? “Because countries with high collective bargaining coverage tend to have a lower proportion of workers with low wages, less wage inequality and higher minimum wages.” Precisely one of the most relevant aspects of Mariano Rajoy’s labor reform of 2011, so praised in Brussels and whose repeal appears in the Government agreement between PSOE and UP, is the bankruptcy of collective bargaining. Thus, at present, they are the data of the European Commission itself, Spain is below the threshold of 70% coverage by collective bargaining.
“Member States that are below 70%”, explain sources from the European Commission, “will be invited to make an additional effort and draw up an action plan to promote collective bargaining. 70% is a minimum of what it should. be the coverage of collective bargaining. But, of course, it would be much better if it were superior. Collective bargaining is important because workers are protected with wages that are established in collective agreements, and they tend to have higher wages. ”
Community sources explain that “the average collective bargaining in the EU has decreased from more than 80% in 1985 to less than 60% in 2015, and this is what guarantees a good level of wages and also minimum wages. This decrease is matter of concern”.