An adequate minimum wage: The EU’s pledge to workers struggling under the rising cost of living.

Dragos Pislaru, the European Parliament’s negotiator on the minimum wage directive speaking at the EP Plenary session.

In recent decades, low wages have not kept up with the rising prices of many member states. The COVID-19 pandemic, inflation, rising energy costs and the Russia-Ukraine war has left many countries in a state of recovery.

At the end of a 40-hour working week, a surge of workers are earning the minimum wage or less. This not only affects living standards but in-work poverty causing higher rates of wage inequality and a declining capability to cope with economic distress.

“For them, inflation means that goods and services become more expensive, which they spend most of their money for, such as food and energy,” says Veerle Nuyts, European Commission Spokesperson for economic affairs, jobs and social rights.

September 14th, 2022, the European Parliament adopted new legislation on adequate minimum wages in the European Union, with 505 votes in favour and 92 against the directive aims to uplift the current minimum wage and strengthen collective bargaining in the member states.

The directive which will be enacted in 2024 has met a mixed response from several countries in the EU. A step forward in many central-eastern European countries and a hindrance to others in the north.

The directive aims to bind the minimum wage to the government, securing an adequate wage without relying on social partners such as trade unions and employers.

“Unions tend to be very much in favour of delegating minimum wages to governments if they’re rather weak. If they, themselves, don’t have the power to come up with high wages. This is why in Romania, unions were much happier to have the statutory minimum wage. The government is more powerful in securing higher wages for workers,” says Christine Aumayr-Pintar, Senior Research Manager at Eurofound, the EU agency for the improvement of living and working conditions.

With two years until the directive comes into force, governments have time to ensure that work pays. While some are hopeful, others remain sceptical. The initiative still allows for a large amount of country autonomy, respecting what members deem to be adequate rather than stating it explicitly. As workers face the harsh consequences of the rising cost of living this winter, the directive marks the first step taken by the European Union.

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