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

François Rycx and Stephan Kampelmann
Characteristics of minimum wage earners and their
households
Trade unions and policy makers in favour of minimum wages typically argue
that the livelihoods of people with low incomes are improved after
introducing wage floors or increasing existing minima. Central for this kind of
argumentation is knowing who the people are that are found in the lower
portion of the income distribution. However, experts on minimum wages
know surprisingly little about the composition of the group of minimum wage
earners. On this point, the study provides new insights by comparing
minimum earners to the rest of the labour force with respect to a range of
socio-demographic and job characteristics.
As for the individual characteristics of workers and employees, the study
notably looks at age, sex, and educational attainment. Although there is some
diversity among the countries covered in the sample, in all of them the
population of minimum wage earners is similar in that it is characterised by:
— a lower average age;
— on average more female employment;
— lower levels of educational attainment than workers with higher wages.
Regarding job characteristics, the study compares the two sub-populations
with respect to the share of temporary work contracts and the incidence of
part-time jobs. The latter has been defined as employments whose average
weekly work hours do not exceed 35 hours. Again, the data reveals a clear
difference between the two sub-populations in all countries. In particular, the
group of minimum earners stands out as containing:
— a considerably higher share of employees with temporary work contracts;
— a higher share of part time employment than the sub-population with
higher wages.
What are the overall living conditions of minimum wage earners? To shed light
on this question, the report exploits harmonized survey information on
household characteristics like the average household size, the total disposable
household income, and the risk of poverty. All countries in the sample show a
similar pattern in terms of household size: the population of minimum wage
earners consistently live in households that are on average larger compared to
the population with higher wages. Unsurprisingly, the average disposable
household income is also consistently lower in households with minimum
wage earners. Finally, in most of the countries in the sample, the risk of
poverty of the household is on average considerably higher for the population
of minimum wage earners.
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