First step towards an EU-wide wage regulation
Social Europe continues to move forward and is a little closer to putting in place a common European system for the establishment of living minimum wages throughout the European Union, after the Ministers of Social Affairs and Employment of the twenty-seven reached an agreement on their position last Monday, in view of the negotiations with the European Parliament to implement the directive.
“Working must pay and no one should work and live in poverty,” said European Commissioner for Social Affairs and Employment, Luxembourg’s Nicolas Schmit, who welcomed a twenty-seven agreement in which he acknowledged having had major doubts. “I am very happy with what we have achieved,” he added, celebrating that some of the countries most reluctant to the measure will join the majority that supported the motion.
The agreement comes a year after the Commission’s proposal, and just two weeks after MEPs agreed on their negotiating position. The aim of the directive, which divided most EU governments, is to promote living wages and improve worker protection, as well as to strengthen collective bargaining.
The agreement was reached with a large majority, although Hungary and Denmark voted against it. The Danes have been one of the toughest governments on this legislation from the beginning. In addition, there were two abstentions. On the one hand, Germany, which ends its transition this week with the arrival of the new coalition government but which, had it already been in charge, would have given its approval. Austria also abstained, but in this case, because the government has doubts about the proposal.
It was precisely a change of position in one of the most reticent governments, the Swedish government, that opened the door to unblocking a negotiation that seemed to have run aground. Regarding the residence of the Nordic countries, Schmit assured that “they are not against progress on social rights issues but are jealous of their national systems” and added that moving towards greater protection at the European level is not against their interests but in their favor.
Process still underway
The process does not end here. Now, Council and Parliament will have to negotiate the details of the final legislation. Here, too, the differences are important. The division that has emerged among the member countries is reflected in almost equal terms in the European Parliament.
The legislation will introduce specific criteria to be applied when setting the minimum wage, taking into account purchasing power or the poverty rate. In addition, it aims to strengthen collective bargaining coverage in those countries where wages are set through this process. Indeed, given that countries with high collective bargaining coverage tend to have a lower proportion of low-paid workers and higher minimum wages than those with low collective bargaining coverage, the EU wants to promote the strengthening of the role of social partners in the process.
The directive also proposes the introduction of controls and inspections and the possibility for workers to claim compensation if their rights are not respected. Governments will also have to monitor the process to ensure that wages are covered.
However, these are largely recommendations, albeit binding, for national governments. “We are working in an area where the treaties limit our competencies,” the Commissioner acknowledged. Schmit explained that the aim was never to set a European minimum wage but to create a common frame of reference for doing so, and that, he said, “is already a great step forward”.
A “novelty” for the EU
The mere fact that the Union is betting on rising wages, the Luxembourger insisted, is already a novelty. “This has not always been the EU’s position,” he explained. Also the Vice-President of the Government and in charge of the Labor portfolio, Yolanda Díaz, celebrated that the Union “understands, at last, that a Europe of and with a future is incompatible with low wages and precarious living conditions.”
The reluctance that has delayed the agreement came from the Nordic countries that have been showing resistance to progress in social policies at the European level because they understand that their standards are far above those of their partners and fear that they could be put at risk by minimum agreements.
