New research shows that national minimum wage increases are effectively boosting the pay of low-paid workers while preserving the crucial role of collective bargaining processes.
In this episode of the Eurofound Talks podcast series, host Mary McCaughey sits down with Eurofound expert Carlos Vacas Soriano to explore how minimum wages have changed in Europe over the past year, as well as the implications of these shifts.
The 22 EU Member States with a national minimum wage have announced their decisions on increases for 2025, except for Spain. Developments bring good news for workers on the minimum wage, who will see their wages increase substantially, beyond current inflation in most countries.
Today, 15 November 2024, marks the deadline for the transposition of the EU Adequate Minimum Wage Directive into national legislation across the EU. The Directive seeks to establish a framework to improve the adequacy of minimum wages and to increase the access of workers to minimum wage protection.
National minimum wage rates were substantially raised in almost all EU countries in 2024, reversing the loss of purchasing power that minimum wage workers experienced between 2021 and 2023, according to relevant calculations.
Minimum wages in Romania and the EU were analysed in an information session on Towards adequate minimum wages and strengthening of collective bargaining at Eurofound on 26 April. These exchanges, known as Virtual Visits, take place in the context of Eurofound’s ongoing efforts to reach out to the national level and ensure widespread dissemination and dialogue with respect to its research findings.
While the prospects for minimum wage workers in early 2023 looked gloomy – with rates in many EU Member States struggling to offset rising prices – the new year brings better news. National minimum wages were raised significantly in most countries, both in nominal and real terms, and also when examined in the context of the entire period since 2022, when inflation rates started to surge.
The latest episode of Eurofound Talks, recorded shortly before Eurofound publishes its harmonised analysis of 2024 minimum wage developments, looks at the changes to minimum wages in Europe in 2023.
While losses in real minimum wages have occurred in several countries across the European Union, these have not eroded the long-term gains of purchasing power that have occurred across the EU since 2013. In an effort to offset inflation, governments have significantly increased nominal minimum wages across Europe. In 2023, the median nominal increase was almost 11%, compared with just 5% in 2
With inflation expected to persist, a further depreciation of minimum wages in real terms can be expected in most Member States, as only a few foresee additional increases in 2023.
Despite nominal increases in statutory minimum wages reaching an all-time high between January 2022 and January 2023, minimum wage workers in most EU countries are seeing their purchasing power decline or just about compensated, based on preliminary inflation figures.
Against the background of inflation affecting European countries, minimum wage workers in 15 out of 21 Member States with statutory minimum wages registered a decline in their wages in real terms between 1 January 2021 and 1 January 2022. This was despite comparatively large increases in nominal rates in the EU during the period.
The first overview of minimum wage setting for 2022 shows that, while some negotiations are still ongoing, virtually all EU Member States have increased their nominal statutory rates.
With its proposed directive on gender pay transparency, the European Commission has significantly bolstered the set of tools for delivering its objectives compared to those presented in its 2014 Recommendation. The proposed portfolio of measures addresses many shortcomings of the instruments that national authorities currently employ.
The economic uncertainty created by the COVID-19 pandemic slowed, but did not stop, overall minimum wage growth in the EU in 2021. Minimum wages were raised cautiously in most Member States, with the median country recording an increase of 3%. Only a few Member States froze their minimum wage rates, marking a very different approach to that taken in the aftermath of the 2008 financial crisis.
Decision-makers approached minimum wage setting for 2021 cautiously due to the economic uncertainty caused by the pandemic. Despite this, nominal statutory minimum wages rose in most Member States and the UK, although at lower rates than in recent years.
Eurofound has published updated monthly comparable data, converted to euro and standardised across 12 months, for 21 EU Member States and the United Kingdom for 2021
Minimum wage workers around Europe are in the simultaneous position of being increasingly called upon to provide essential services during COVID-19 confinement and response measures; as well as being more likely to be made redundant or furloughed due to their concentration in highly impacted sectors.
Statutory minimum wages were raised in most EU countries for 2020 – in many even substantially, such as in Poland 17%, Slovakia 12%, and Czechia 11% - according to Eurofound’s ‘Minimum wages in 2020: Annual review’ published today.
As one of their ‘100 days in office’ initiatives, the new European Commission intends to propose an initiative for an EU minimum wage. The aim is that by 2024 every worker in the EU should earn a fair and adequate wage, no matter where they live. And despite the Commission’s assurance that this would not alter national traditions of wage-setting, emotions are already running high
