Minimum wage-living income
Authors: Hurley, John; Vacas Soriano, Carlos; Muraille, Marcel; Lantto, Eero Publisher: Eurofound Date: 2018
A living wage has been defined as a measure of income that allows an employee a basic but socially acceptable standard of living. In recent decades, living wage initiatives have emerged in a small number of mainly English-speaking countries, including the UK and Ireland. These initiatives have developed in response to the inadequacy of income for many working households reliant on existing statutory minimum wage rates. They set out a methodology for calculating a wage that would allow wage earners and their dependents to live with dignity, in line with the fair wage provisions set out in the European Pillar of Social Rights adopted in 2017. This report aims to provide policymakers with a practical guide to the living wage concept.
Authors: Mascherini, Massimiliano; Dubois, Hans; PRAXIS Center for Policy Studies Publisher: Eurofound Date: December 2020
The EU strives for the upward convergence of its Member States, where their performance improves and gaps between them decrease. Nearly a decade after the Great Recession, the COVID-19 crisis has again put this objective under pressure. This policy brief focuses on convergence in material well-being in Europe. Trends in several indicators largely follow the economic cycle, with upward convergence in good times and downward divergence in bad times. This could mean further divergence and polarisation among Member States as we face a new economic downturn, with the prospect of an uneven pace of recovery across countries when growth returns. The policy brief presents an overview of policy measures implemented by the EU and Member States to smooth the impact of the COVID-19 crisis. It discusses EU coordination of minimum income schemes as a possible tool to limit deterioration and divergence in the indicators should the economy enter a downturn.
Authors: Aumayr-Pintar, Christine; Rasche, Matthias Publisher: Eurofound Date: November 2020
This report, as part of an annual series on minimum wages, summarises the key developments during 2019 and early 2020 around the EU initiative on fair wages and puts the national debates on setting the rates for 2020 and beyond in this context. The report features how minimum wages were set and the role of social partners. It discusses developments in statutory minimum wages and presents data on minimum wage rates in collective agreements related to 10 low-paid jobs for countries without statutory minimum wages. The report also includes a section on the regional dimension of minimum wages and presents the latest research into the effects of minimum wage changes on wages, employment, in-work poverty, prices and profits.
Authors: Aumayr-Pintar, Christine Publisher: Eurofound Date: January 2021
Despite the unusually tough economic and labour market conditions, most EU Member States made nominal and real increases to their minimum wages in 2020. This is what a first overview of recent minimum wage developments reveals. Some countries lived up to earlier promises or pre-agreements, while other countries strayed somewhat off their original path but still maintained the overall trend of increasing minimum wages in line with other wages. Although most countries were cautious in the level of increase granted, low inflation rates meant that the value of minimum wages still went up beyond rises in consumer prices. For the time being, at least, it can be concluded that the policy response in the context of the COVID-19 pandemic is distinct from the approach taken during the global financial crisis, when a greater number of countries moved quickly to freeze nominal minimum wages.
Copyrighted articles of doctrine
Peña-Casas R., Ghailani D., A European minimum wage framework: the solution to the ongoing increase in in-work poverty in Europe?, in Vanhercke B., Spasova S., Fronteddu B., Social policy in the European Union: state of play 2020, 2021, Brussels, ETUI and OSE, pp. 133–153.
The European Pillar of Social Rights (EPSR), endorsed jointly by the European Parliament, the Council and the European Commission on 17 November 2017, reaffirmed a series of guaranteed rights for workers and citizens in the European Union (EU). The new European Commission, which took office on 1 December 2019, geared its work programme to the effective implementation of the principles set out in the EPSR (von der Leyen 2019). A number of initiatives were announced, including the development of European frameworks for minimum wages and guaranteed minimum incomes, the strengthening of collective bargaining and the roles of the social partners. The Covid-19 pandemic put the establishment of European Support to mitigate Unemployment Risks in an Emergency (SURE)1 back on the agenda (see also Myant, this volume), an idea already floated by the previous Commission in response to the 2008 economic and financial crisis (European Commission 2020a). Furthermore, the idea of developing a European minimum wage framework has sparked lively discussions and renewed interest in the relationship between low wages and in-work poverty (Eurofound 2020a; Müller and Schulten 2020a). People in in-work poverty – both (low-paid) working individuals and members of households with a total disposable income below the at- risk-of-poverty threshold – are the focus of these discussions.
In light of these, this chapter begins by examining the incidence and development of in- work poverty in the EU before going on to explore the link (not necessarily automatic) between minimum wages and in-work poverty. It then reports on the wide variety of policies which, directly or indirectly, have an impact on the development of in-work poverty. The last section presents useful lessons to be considered in the European debate on minimum wages with a view to countering the current unacceptable situation in which more than 20 million Europeans are finding that having a job is not necessarily sufficient to keep them out of poverty.
Vandenbroucke F., Solidarity through redistribution and insurance of incomes: the EU as Support, Guide, Guarantor or Provider?, ACES Research Paper 2020/1, Amsterdam, ACES.
Income redistribution and insurance are core functions of welfare states. What role should the EU play in this domain? I examine the purchase of normative theorizing on social justice on this question, building on the contrast between three models of EU involvement: the EU as Support, which implies the sharing of resources through intergovernmental transfers; the EU as Provider, which implies EU cross-border transfers towards individual citizens; the EU as Guide or Guarantor, which implies that the EU formulates normative policy ideals.
I review different normative accounts of justice for the EU (Ronzoni, Viehoff, Sangiovanni, Van Parijs), and how they bear on the choice between these models of EU involvement in welfare state solidarity. These accounts evolve between two extreme positions. On the one hand, an account based on supranational justice as ‘background justice for nation states’ implies that the EU should be a mere instrument in the hands of its member states. The opposite extreme position is that EU should be a laboratory for international distributive justice, whereby national welfare states are demoted to the toolbox of instruments. I argue that an account of justice for the EU must search for a middle ground, whereby neither the national welfare states nor the EU are demoted to mere instruments.
I conclude that the EU should support the member states’ welfare states in some of their key functions, on the basis of common social standards and in pursuit of upward convergence. Such a ‘Social Union’ would be a Support, Guide and Guarantor, both in the realm of insurance and redistribution. Through the establishment of interstate insurance, it would be a true ‘insurance union’, but, from the point of view of individual citizens, it would not become a direct Provider of insurance. It would engage in interstate redistribution, but not in interpersonal cross-border redistribution.
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