The way forward on Adequate Minimum Wages

 

On  28 October 2020, the European Commission presented its proposal for a Directive on “Adequate minimum wages in the European Union” (COM(2020)682 final).

HOTREC fully supports the main objectives of the Directive: improving the adequacy of minimum wage across Europe and the access of workers to minimum wage protection in the EU.

Nevertheless, we deeply regret the instrument chosen by the European Commission as expressed in the two-stage social partner consultation. A Council Recommendation would have been the correct instrument to put forward –  it is to note that several Member States requested a written opinion from the Council Legal Service to analyse the appropriateness of the legal basis chosen by the European Commission (artt. 153/1 and 153/2 TFEU).

We encourage the continuation of well-established collective bargaining on minimum wage settings, as long as different economic and social factors are taken into account (e.g. taxation, career and training opportunities, social benefits). We also support a stronger involvement of social partners in setting statutory minimum wages – under the condition that social partners agree and in full respect of national competences. Finally, established statutory minimum wages also need to be respected.

HOTREC is of the opinion that national and EU skills policies should be developed to allow better productivity of low-skilled workers. This will then originate better incomes for those workers. At the same time, different forms of work should as well be promoted by the EU – this will motivate workers to hire more. And it will improve work-life balance; support career choices; foster social inclusion; enable personal choices.

Moreover, international indicators (such as 60% of gross median wage and 50% of the gross average wage) should be deleted from the text, as they don’t take into account political, economic, social or national traditions of the different countries and might increase the pay gap between countries.

HOTREC also believes that the European Semester process should be used to develop effective structural reforms, boost investment strategies and encourage responsible fiscal policies

If all these strategies will be in place, we are of the opinion that poverty will be tackled and good living conditions across Europe will be safeguarded.