The new EU directive aims to set a transparent minimum wage level, such as 60% of the median salary. Brussels also calls for regular indexation to support people’s incomes despite rising prices.
The statutory minimum wage for a full month plays an important role in combating poverty. There is no minimum threshold in 5 EU countries.
Countries with and without a minimum wage threshold.
In a number of European countries, the share of workers receiving the bare minimum exceeds 10%
22 of the 27 EU member states have introduced a minimum wage. In Denmark, Italy, Austria, Finland and Sweden, politicians are not taking this measure. Cyprus introduced a minimum wage only at the beginning of last year.
Of the 10 EU candidate and potential candidate countries, eight have established a national minimum wage. Montenegro, Moldova, North Macedonia, Georgia, Albania, Serbia, Turkey and Ukraine have one, while Bosnia and Herzegovina and Kosovo do not.
In the European Free Trade Association (EFTA) countries – Norway, Switzerland and Iceland – there is no minimum wage.
In almost two-thirds of EU countries, the minimum wage before tax is below €1,000.
Minimum wages vary widely across the EU, currently ranging from €477 in Bulgaria to €2,571 per month in Luxembourg.
The minimum wage exceeds 2,000 euros in Luxembourg, Ireland, the Netherlands and Germany, while in France this figure is 1,767 euros and in Spain – 1,323 euros. Moreover, we are talking about gross wages, the worker receives less in hand.
Minimum monthly salary before deductions.
The minimum wage is below €1,000 in 14 of the 22 EU Member States that have a national minimum wage.
Among candidate and potential candidate countries, this figure ranges from €360 in North Macedonia to €613 in Turkey.
In the EU country Bulgaria (EUR 477), the minimum wage is lower than in Turkey and Serbia and Montenegro, which are still candidate countries.
Differences are smaller in purchasing power terms
The variations in minimum wages are significantly smaller when these values are expressed in purchasing power standards (PPS). This is an artificial model in which one PPS currency unit can theoretically buy the same amount of goods and services in each country.
This artificial currency unit is defined by Eurostat based on the difference in price levels between countries.
The minimum wage adjusted for the PCA currently ranges from €542 in Albania to €1,883 in Germany.
In addition to Germany, this figure exceeds €1,250 in Luxembourg, the Netherlands, Belgium, France, Ireland, Poland, Slovenia and Spain.
Minimum monthly wage in the SPS.
The Czech Republic, Slovakia, Estonia, Latvia and Bulgaria have the lowest minimum wage in the SPS among EU countries.
In some candidate countries, such as Turkey, Serbia and Montenegro, wage levels were higher than in EU countries such as Estonia, Latvia and Bulgaria, but the figure was still below €1,000 for all candidate and potential candidate countries for which data are available.
The share of workers earning the minimum wage varies widely. The minimum wage is crucial in some countries where there are more people at the bottom of the income scale than in others.
Share of workers earning less than 105% of the minimum wage.
Thus, in 2018, the share of workers earning less than 105% of the national minimum wage exceeded 10% in five EU countries. These are: Slovenia (15.2%), Bulgaria (14.1%), Romania (13.3%), Poland (12.1%) and France (11.6%).
In 10 EU countries, including Germany (6.6%), this share also exceeded 5%.
How to determine an adequate minimum wage?
Determining an adequate minimum wage is not easy. The EU Directive states: “Member States may use reference values commonly used at international level, such as an amount equivalent to 60% of the median wage and 50% of the average wage, and/or reference values used at national level.”
