Why EU minimum wage is really bad

The EU can just only work in those certain areas where its member nations have actually authorised it to do this, through the EU treaties.

With regards to labour market policy, the treaty is quite clear. Pay, the best of relationship, the ability to strike additionally the directly to lock-out aren’t problems in which the EU can act. Any try to circumvent this might probably, and rightfully, be contested and brought ahead of the European Court of Justice.

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A concern of broad and present interest is the latest EU Commission president Ursula von der Leyen’s announced effort on presenting an EU legal tool on at least wage in the very first 100 times of her duration in workplace.

The commissioner that is responsible Nicolas Schmit, has established that an initial outline is going to be posted on Tuesday (January 14th. )


Once the president of 1 regarding the largest trade union confederations within the EU, I begin to see the requirement for good working conditions and decent pay in most user states. A lot of in European countries have been in precarious jobs with low or unstable incomes.

The realisation regarding the interior market must never ever result in a race to your base where workers stay against employees. We truly need a Personal Europe.

This need, nonetheless, doesn’t mean that people must embrace all proposals for labour market regulation regarding the European level, even though the reported aim is laudable.

You will find few areas where the institutions differ the maximum amount of between the known user states because the labour market.

The particular roles associated with the state therefore the social partners vary, as does the mix between legislation and collective bargaining to manage such dilemmas as wages, working some time work security.

Legislation this is certainly key in one single nation might be non-existent an additional.

The unionisation price on the list of known user states differs between significantly less than five per cent to a lot more than 65 per cent.

This will make EU that are common of this labour market difficult and delicate.

In a recently available research of collective bargaining, the organization for Economic Cooperation and developing (OECD) makes a spot of just how also small alterations in labour market policies can cause major and frequently unintended changes in bargaining behavior and commercial relations systems.

A binding instrument that is EU legal minimal wages or collective bargaining might have exactly this impact.

By obliging the user states up to a minimal wage on a specific degree or determined in accordance with a specific formula, it might efficiently force all EU countries to own either a statutory minimum wage or a method for extending collective agreements to all or any employees inside a sector.

There are good reasons why you should doubt the alternative to carve away exemptions or build firewalls to safeguard member states that do not have statutory minimum wages or the likelihood to give collective agreements, such as for instance Denmark, Italy and Sweden.

Through the case that is laval published employees we understand very very first hand just exactly how effortlessly such claims may be brushed apart because of the Court of Justice.

But additionally nations which have minimum wage legislation or even the possibility to produce agreements that are collective binding have reasons why you should get worried.

One must perhaps perhaps maybe not underestimate the fantastic problems connected with constructing a significant eu minimum wage directive.

The thought of ‘wages’ is not even close to homogenous across user states, why a musical instrument targeted at harmonising the best prices of pay would need to be incredibly detailed to be meaningful.

Otherwise, it’s going to be very easy to circumvent by either companies or government that is national.

First and foremost nevertheless, is that the EU lacks legal competence in the region of wages.

This article associated with treaty that offers the EU legislative capabilities in the field of labour market policy (Article 153) explicitly states that this doesn’t use to cover, the proper of relationship, the ability to strike or perhaps the directly to impose lock-outs.

Exactly just exactly What rises, might fall

Accepting that EU has legislative powers in your community of wages would place us for a path that is dangerous. This time around, it could be utilized to boost the cheapest degrees of pay.

The time that is next in a recession or economic crisis, maybe it’s used to lessen wages. Yet later on, the freedom of relationship together with directly to strike could come under assault.

Consequently, any make an effort to legislate in this area needs to be resisted as well as in the finish be challenged into the Court of Justice.

Well-functioning systems for collective agreements just cannot be ordered from Brussels.

The necessity for a far more social Europe can not be met by legislation that operates the possibility of destroying well-functioning nationwide systems for commercial relations and collective bargaining.

Rather than proposing an EU minimum wage as opposed to the treaty, the payment should place more effort into supporting, yet not regulating, the introduction of social discussion, collective bargaining and much more inclusive labour market policies into the user states.

The pillar of Social Rights and its non-binding nature and mechanisms for mutual learning is a good instrument to build on in this respect.

Author bio

Therese Svanstrom is president of this Swedish Confederation of Professional Employees (TCO), which comprises comprises 13 affiliated trade unions with over 1.4 million people.


The views expressed in this viewpoint piece would be the writer’s, maybe maybe perhaps not those of EUobserver.

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