An agreement hailed as a “huge victory” by Renaissance, the delegation of deputies of the presidential majority and its allies. On the night of Monday to Tuesday, MEPs agreed on “European rules aimed at setting adequate minimum wages” within the European Union. A measure welcomed by Prime Minister Elisabeth Borne who speaks of a “progress” of which “we can be proud”.
The European Parliament justifies itself by specifying that within the European Union (EU), once the conversion into euros has been made, the “minimum monthly wages vary considerably (…) ranging from 332 euros in Bulgaria to 2,202 euros in Luxembourg”, according to data from Eurostat.
So what is this deal? The Parisian takes stock.
What does the agreement say?
First of all, MEPs did not adopt a common minimum wage for the whole EU or a uniform minimum threshold. Here, the goal is to enable all citizens to have “decent living conditions”. The amount varies in each state “taking into account their own socio-economic conditions” and “purchasing power”, indicates the European Parliament in a press release.
“A living wage is an amount that allows a person to contain minimum expenses, such as housing, heating or food,” says economist Stéphanie Villers. To estimate it, the European Parliament advises States “to establish a basket of goods and services at real prices” or to rely on “indicative reference values commonly used at international level, such as 60% of the salary gross median salary and 50% of the gross average salary”.
This compromise pushes the 21 member countries of the European Union which already have a minimum wage to greater transparency on the way in which it will be determined. For the six EU countries where there is no minimum wage (Austria, Cyprus, Denmark, Finland, Italy and Sweden), there will be no obligation to introduce one.
The agreement also stipulates that states in “which less than 80% of the workforce is covered by a collective agreement will have to create an action plan to gradually increase this coverage”.
How will this apply?
The text, adopted by the negotiating team of the European Parliament, must now “be approved by the Committee on Employment and Social Affairs, then by a vote in plenary session”, indicates the European body. It is therefore provisional today.
Then, the European Council, which brings together the heads of government or state of the 27 member countries, will have to ratify the agreement. Sweden and Denmark have already announced that they would oppose the text. This should not prevent the vote on the text, which must be adopted by qualified majority, i.e. 15 States representing at least 65% of the EU population must be in favor of this proposal .
But transposing EU decisions within states and applying them can take several months. “Inflation is present now and does not wait for European deadlines”, analyzes Frédéric Farah, economist at the Panthéon Sorbonne University and notably author of “Understanding the euro”.
A good way to fight against social dumping?
Fighting against social dumping, this practice which consists, for companies, in employing cheaper labor in developing countries, is one of the stated goals of the agreement. “It can indeed be a solution, but there is no magic”, advances Stéphanie Villers.
A point on which Frédéric Farah is more cautious. For him, “there is a structural defect within the EU, where member countries do not see themselves as partners but more as competitors”. “I fear that the underlying logic remains unchanged. Several States will be confronted with significant additional costs linked to inflation. Doing social dumping is also a way to gain in competitiveness,” he adds.
Towards a European minimum wage?
What if this agreement was a first step towards a real minimum wage common to all of Europe? “It is possible, but it will be necessary to convince the States of its interest”, wants to believe Stéphanie Villers.
“To get there, we will first have to review the European framework and this question of competitiveness between member countries, there we would be on something more ambitious”, supports Frédéric Farah for his part. “Otherwise we will remain on a safety net to prevent the impact of inflation from being too strong,” he concludes.