The European Union has implemented a directive that aims to revitalize Europe’s social dimension, starting from October 2022. The directive tries to ensure a minimum wage standard of 60 percent of the median income, in addition to standards for collective bargaining and social dialogue. Still, although this directive could play a vital role in improving European workers’ incomes, it is not mandatory for member states to introduce a statutory minimum wage. Have the European minimum wage guidelines been effective in achieving their goals, or have they had little to no impact?
Minimum wage consists of the minimum salary an employer is required to pay wage earners for the work they have performed during a certain amount of time. The European Union is trying to change the way member states regulate their minimum wages. According to the European labor organization, the minimum wage in EU member states is not always set by the government. Instead they are determined by industry sectors or independent regions.
Casper Cornelisse, director of CNV Youth, speaks about the importance of the minimum wage: ‘The power of companies and employers has grown tremendously. Most of the time, those companies are not willing to pay a decent salary to a worker. The minimum wage is a way of securing a pay, through the law, that is not randomly chosen by the employer and ensures a secure life for someone under contract. Because trade unions aren’t as strong anymore, our power has weakened. But the minimum wage is one of the causes we fight the hardest for.’
The 2022 EU directive on adequate minimum wages marks a significant step toward a more socially inclusive Europe. For decades, EU policies were driven by neoliberal market integration, which often undermined labor protections. This approach intensified during the 2010s economic crisis, when the European Commission pushed for labor reforms that weakened collective bargaining and lowered wages, exacerbating social inequality and poverty.
By the mid 2010s, a shift in discourse acknowledged the harmful effects of these policies, which contributed to rising Euroscepticism, political instability, and events like Brexit, say researchers Torsten Müller and Thorsten Schulten. The concept of “Social Europe” gained momentum, emphasizing the need for strong social institutions to ensure cohesion and stability. While previous efforts, such as the European Pillar of Social Rights in 2017, were largely symbolic, the adoption of the minimum wage directive marks a meaningful move towards reinforcing the EU’s social dimension and improving labor protections.
The 2022 EU Directive on minimum wages has already reshaped wage-setting and collective bargaining across Europe, evenbefore full implementation by November 2024. The introduction of a “double decency threshold” has influenced national policies, with several countries amending labor laws to align with the directive. But implementing such a directive can also be challenging for a lot of EU-member states. ‘It is very hard for all European countries to implement a minimum wage. A lot of the member states are close already to the maximum amount of debt a country is allowed to have in the EU-zone. If there is suddenly a lot of debt coming from the social security sector, they will be going over. So there are for sure a lot of limits’ says economics professor Daniël van Vuuren.
According to Torsten Müller and Thorsten Schulten, Bulgaria and Czechia have integrated this threshold into their labor codes, while Slovakia has set its minimum wage at 57% of the average wage. Countries like Croatia, Malta, Ireland, and Estonia have used the threshold to guide wage increases, and it has spurred debates on wage adequacy in Germany, Spain, and Latvia. The directive has already sparked significant wage increases and reforms, but its full impact will depend on how it is implemented at the national level.
