The European Minimum Wage on the Doorstep

Abstract

The European Commission published a consultation document with a view to take legislative action to establish fair minimum wages in Europe. In this policy brief, the researchers argue for a pragmatic approach of taking the ‘in-work-poverty-wage’ threshold of 60 per cent of the national full-time gross median wage as the reference to assess the adequacy of minimum wages. In countries in which a high proportion of workers earn very low wages, the whole wage structure, and therefore the median wage, is very low; therefore, a minimum wage of 60 per cent of the national median wage may still not be enough to ensure a decent living standard. The Commission initiative should, therefore, include an obligation to subject the 60 per cent target to a real-life test by examining, for instance on the basis of a country specific basket of goods and services defined with the full involvement of trade unions and employers’ organisations, whether a minimum wage of 60 per cent of the national median wage really amounts to a wage that ensures a decent living standard.