Who earns minimum wages in Europe - European Trade Union ...

1. Introduction:
Minimum wages in Europe
After a phase of “conscious neglect during the 1980s and 1990s” (ILO, 2010;
p. 63), minimum wages 1 have re-appeared on political agendas around the
world. Although their critics regularly warn against potentially negative
effects, notably as regards low-wage employment, wage floors are widely
regarded as useful instruments to protect low-wage workers and to combat
rising levels of inequality and poverty. Today, minimum wages exist in one
form or another in around 90 % of countries in the world (ILO, 2010), with
Europe standing out as a traditional stronghold of this type of labour market
policy.
Following episodes without mandatory wage floors, the United Kingdom and
Ireland adopted statutory national minimum wages in 1999 and 2000,
respectively, thereby joining the majority of their European neighbours:
Bulgaria, the Czech Republic, Estonia, Spain, France, Latvia, Lithuania,
Luxembourg, Hungary, Malta, the Netherlands, Poland, Portugal, Romania,
Slovenia, and Slovakia. Two Candidate Countries for Membership in the
European Union also have national statutory minimum wages (Croatia and
Turkey). Belgium and Greece have a national minimum wage too, but it is set
by collective bargaining agreements (in Belgium the collective agreement
acquires legal force by royal decree and supplemented by sectoral minima).
Two Member States of the European Union maintain a system of statutory
national minimum wages that does not cover the majority of employees:
Germany and Cyprus. In the former, minimum wages are set for specific
sectors under the provisions of the Posted Workers Act (Arbeitnehmer
Entsendegesetz). The Cypriot minimum wages are defined for a restricted
number of occupational groups (salesmen, clerks, auxiliary health care staff
and auxiliary staff in nursery schools, crèches and schools). A somewhat
similar system exists in the Former Yugoslav Republic of Macedonia, a
Candidate Country, where national minima are collectively negotiated for full
time employees in the textile, leather, and shoes industry. Finally, there are
several European countries without national statutory minimum wages:
Austria, Denmark, Italy, Finland, Sweden, Iceland, Norway, and Switzerland.
However, sector-level agreements often have erga omnes applicability in
these countries and therefore function as a collectively negotiated minimum
wage.
1. This report defines "minimum wages" as including not only statutory wage floors, but also minima
that are defined through collective bargaining at national and/or sectoral level. An overview about
the different mechanisms through which minimum wages are set in Europe is provided below
(see Table 2).
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