Theses for a European Minimum Wage Policy

1
Theses for a European Minimum Wage Policy
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
Model Brussels, 9-10 November 2005
Dr. Thorsten Schulten
A joint Proposal made by Researchers from WSI
(Germany), Denknetz (Switzerland) and IRES
(France)
2
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
1. The Fundamental Meaning of Minimum Wages
2. Minimum Wages in Europe a Brief
Overview 3. Proposals for a European Minimum
Wage Policy
3
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Fundamental Idea of Minimum Wages
No business which depends for existence on
paying less than living wages to its workers has
any right to continue in this country. By living
wages I mean more than a bare subsistence level
I mean the wages of a decent living. U.S.-Präside
nt Franklin D. Roosevelt (1933)
4
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Normative Foundations of an Equitable or
Fair Wage
? United Nations Declaration of Human Rights
(1948) ? ILO Conventions on Minimum Wages (26,
131) ? European Social Charta of the Council
of Europe (1961) ? Community Charter of
Fundamental Social Rights for Workers of the EU
(1989) ? National Constitutions (e.g. Belgium,
Italy, Spain, Portugal, Czech Republic)
5
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Social Aims of Minimum Wages
? Defining a socially accepted Minimum Wage
Level ? Limiting the Low Wage Sector ? Preventing
Working Poor ? Having a more Egalitarian Wage
Structure ? Fighting Gender Pay Gap and other
Forms of Wage Discrimination
6
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Economic Function of Minimum Wages
? Preventing Downward Competition on Wages ?
Promoting more Productivity-oriented
Strategies at Company -Level ? Stabilising
Private Demand ? Counteracting Deflation ?
Having almost no direct Impact on Employment
!!!
7
Statutory Minimum Wage per Hour in Euro (November
2005)
8
Statutory Minimum Wage per Months in Euro
(November 2005)
9
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Mode of Determination and Adjustment of Statutory
Minimum Wages

• Pure Political Determination by the State (USA)
• Political Determination by the State with
  Institutionalised Consultation of Trade Unions
  and Employers (UK, Spain, Portugal)
• National Bipartite or Tripartite Bargaining
  (Belgium, Greece, Ireland)
• Indexation of Minimum Wages to the Development of
  Prices and/or Average Wages(France,
  BeNeLux-Countries, Poland)

10
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Functional Equivalents in Countries with no
Statutory Minimum Wages
? Scandinavian Countries High Trade Union
Density ? Austria High Bargaining Coverage
through Obligatory Membership within
Employers Association ? Italy High Bargaining
Coverage de facto guaranteed by the
Constitution ? Germany No Functional Equivalent
!!!
11
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Theses for a European Minimum Wage Policy
A Joint Proposal made by Researchers
from? Wirtschafts- und Sozialwissenschaftliches
Institut (WSI) in der Hans-Böckler-Stiftung,
Germany ? Denknetz, Switzerland ? Institut de
Recherches Economiques et Sociales (IRES),
France
12
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Wage Policy in Europe
? Wages purely viewed as Cost Factors ? Wages as
a Key Variable for Competitiveness ? General
Tendency towards Wage Moderation ? Increasing
Wage Dispersion ? Extension of Low Wage Sector
and Working Poor
13
Low Pay Sector in Europe 2000 (in of all
Employees)
Source European Commission
14
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Community Charter of Fundamental Social Rights
for Workers of the EU from 1989
Right for an equitable wage All employment
shall be fairly remunerated. To this end, in
accordance with arrangements applying in each
country, workers shall be assured of an equitable
wage i.e. a wage sufficient to enable them to
have a decent standard of living (Title 1, 5).
15
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
European Norm for National Minimum Wages
? 60 of the Average National Wage ? 50 as a
Short-Term Interim Target
16
Monthly Minimum Wage in of Monthly Average Wage
in Industries and Services 2004
17
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Implementation of a European Minimum Wage Policy
? Political Level EU Open Method of
Coordination ? Trade Union Level European
Coordination of Collective Bargaining
18
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Implementation of a European Minimum Wage Policy
via the Open Method of Coordination
European level ? Determination of joint
Targets and Time Schedules ? Monitoring and
Evaluation of National Initiatives National
level ? National Action Plans to
reach European Targets
19
GUE/NGL in Cooperation with Forum Social Europe
Conference on The European Social
ModelBrussels, 9-10 November 2005
Implementation of a European Minimum Wage Policy
via Coordination of Collective Bargaining
European level ? Determination of joint Targets
for National Bargaining ? Monitoring and
Evaluation of National Bargaining
Policy National level ? National Trade Union
Campaigns to reach European Targets