Minimum Wage and the EU: Happily Ever After?

Written by | Saturday, June 6th, 2020

Once deemed a pipedream, a concrete plan for a European framework on minimum wages might finally be in the cards. In fact, the European Commission will soon come out with an updated proposal, following its official commitment to introduce a legal instrument on minimum wages and a first round of consultations earlier this year.

But before it can become a reality, the EU will have to overcome several obstacles. Firstly, it should design an ambitious European framework that delivers real and concrete progress for low-wage workers and is sufficiently flexible to accommodate the very diverse wage-setting regimes present across the EU. Secondly, it must deal with the opposition to EU interventions in wage-setting and convince sceptics of the economic, social and political benefits of having such a European framework.

By promoting decent minimum wages for all through the creation of a legal instrument, the EU would help improve the current social climate. At the same time, it would contribute to the development of the EU’s caring dimension, which is crucial to curb the growing distrust in EU institutions, which has been fuelled further by the Covid-19 crisis. Lastly, it would also prove that the Commission’s immediate crisis-related measures will not undermine its long-term ambition for a Social Europe. Now more than ever, the EU needs to prove its worth to those who have benefitted the least from the technological progress, globalisation and expanding wealth of the last four decades.

The Commission’s current approach offers a solid starting point to establishing an impactful and considerably thought-through European framework on minimum wages to tackle multiple social challenges and achieve several objectives at once (i.e. the promotion of decent living, the convergence of social realities across the EU), thus creating a historic opportunity for the EU to become more equal and improve the working conditions of its low-paid workers. However, to achieve the creation of an egalitarian wage structure and political consensus, and support decent living standards, the Commission will need to present concrete instruments and demonstrate a great deal of political agility. Above all else, these should be the guiding principles in the Commission’s efforts towards reaching an agreement on the European framework for minimum wage.

The Commission’s proposal would also bring some positive prospects to the future of the European project at a time when all minds are in crisis management mode, trying to stop the spread of Covid-19 and limit its harmful effects. By reinforcing its caring dimension, the EU would anticipate the impact the current crisis will have on its political landscape, as the socioeconomic consequences are likely to provide fertile ground for radical and Eurosceptic voices. In fact, although there is still no clear signal that anti-EU forces have massively benefited from the crisis, such developments remain a possible scenario to be avoided.

The success of the upcoming Commission’s proposal will, therefore, be determined by its ability to address the fears of its opponents and convince them of the great benefit such an initiative would have on the long-term prospects of the European project, especially in today’s context. This will require a great deal of political agility at a time when national policymakers have their eyes fixed on the immediate effects of the COVID-19 crisis.

‘Minimum Wage and the EU: Happily Ever After?’ – Discussion Paper by Claire Dhe?ret and Mihai Palimariciuc – European Policy Centre / EPC.

The Discussion Paper can be downloaded here

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