Negotiators from the European Parliament and EU countries have agreed on a new European directive on minimum wages. This directive does not impose financial obligations on companies. However, stricter procedures will be introduced for EU countries to link the minimum wage level to their averages and the total wage bill.
European member states must assess whether their minimum wages are adequate, for example relative to the international standard of at least 50% of the average gross wage and 60% of the so-called median gross wage. More than twenty European countries, including the Netherlands, do not meet this standard. “A clear signal from Europe that the Netherlands must raise minimum hourly wages to 14 euros,” emphasized Dutch chief negotiator Agnes Jongerius.
At the urging of Sweden and Denmark, a compromise text was added at the last minute stating that these are minimum agreements which countries may exceed. Both countries did not want to risk having to lower their collective social standards.
In addition, trade union rights are anchored: EU countries must take action – including preventive measures – if workers and union representatives are pressured or threatened by an employer. Agnes Jongerius: “Together you are stronger. And a collective labor agreement with good working conditions is the best way to combat poverty among working people. This really is a turning point compared to Europe right after the banking crisis; from now on, we are pushing wages upward!”
EU Commissioner Nicolas Schmidt (Social Affairs) expressed satisfaction with the currently reached provisional political agreement between the Social Affairs ministers and the EP negotiators. The new directive imposes no obligations but establishes a framework for national negotiations and procedures in which European minimum thresholds are set. The European Parliament will vote on the agreement in July, and EU countries must give their final approval on June 16.
According to the new directive, at least 80 percent of workers in an EU country must fall under collective (CLA) wage negotiations. If this is not the case, an EU country must submit a report to Brussels. As a result, nationwide collective wage agreements will likely also be required for parcel delivery workers, asparagus pickers, bulb peelers, and agricultural seasonal workers.
The wages of approximately 25 million workers are expected to rise due to this legislation. The minimum wage will not be the same everywhere, but countries are required to encourage collective negotiations. Countries are advised to base this on a basic package of goods and services.
Dutch GroenLinks Member of the European Parliament Kim van Sparrentak is also pleased with this important step: “For too long, the European Union has neglected workers with the lowest wages. This law shows that a more social Europe is possible when there is political will. Now that many people struggle to make ends meet, it is crucial to translate this agreement into higher wages as soon as possible.”
The agreement also incorporated Van Sparrentak’s proposal to consider closing the gender pay gap when determining the minimum wage: “It is mainly women who work in low-paid jobs. By focusing on this, we can tackle this income disparity even faster.”