European commission wants to oblige minimum wage

The European commission of social affairs has proposed to introduce a minimum wage in countries that don’t have one. They also want to raise minimum wages where they are too low. In several member states they don’t have a minimum wage.

When you have a job in Europe that doesn’t necessarily means that you aren’t poor. More than 8% of the European employees get a salary every month that keeps them below the poverty threshold.

According to the EU commission of social affairs there is a high risk of in-work poverty. This risk especially is in countries where there are low minimum wages and uneven earnings distribution. The people that get mostly effected with the risk of in-work poverty are single parents households and employees with a temporary contract. This risk has even gotten higher because of the economic crisis.

Most of the member states already have a minimum wage. There is a big different in the height of the minimum wage.
In Romania there is a minimum wage of € 162, only a fourth of the average wage. In Ireland the minimum wage is over half the normal wage, € 1462.

It is the idea of the EU commissioner of social affairs, mr. László Andor, to oblige a minimum wage. The countries that don’t have a minimum wage are Germany, Italy, Austria and the Scandinavian countries. In Italy and Austria a lot of rules about wages has been put in binding collective agreements. In Germany almost one out of three employees don’t have right to a minimal wage.

The European commission can’t obligated member states to establish a minimum wage, but they can ask the member state to review their social policy.
The European commission focuses on countries with positive accounts to make a target for the increasing of wages. They think this will help to sustain aggregate demand.

Soon the commission will also propose to the member states to lower the taxes on labour. They would like to ask the member states to put taxes on actions that are bad for the environment, like consuming. This proposal must stimulate the labour market, by lowering the labour costs and favour hiring

The European commission also mentions that they might propose hiring subsidies. By creating the right kinds of incentives and hiring subsidies employers would be motivated to engage in new recruitments and creating jobs that would otherwise not be created. Hiring subsidies should be first applied to vulnerable groups like long term unemployed or youth .

Sources:
http://www.euractiv.com/socialeurope/brussels-push-eu-wide-minimum-wage-news-512189?utm_source=twitterfeed&utm_medium=twitter
http://www.elsevier.nl/web/Nieuws/Europese-Unie/336275/Europese-Commissie-wil-minimumloon-verplichten.htm?rss=true
http://unitedexplanations.org/english/2012/01/10/minimum-wages-in-europe-2012/

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4 thoughts on “European commission wants to oblige minimum wage

  1. I think it is positive that the European commission considers a minimum wage for countries who still do not have one. The fact that people are more or less poor, even though they are working, is not fair. Looking at Germany, there are people who are just too lazy to work. Based on the fact that they are getting more unemployment benefit sitting at home instead of being active at work, which is not right and therefore, a minimum wage would be a good start for this issue.
    Moreover, I also think that an average minimum wage among the European countries should be integrated. Although, the living expenses should be taking into consideration. However, looking at the minimum wage in Romania and Ireland it is a tremendous difference. Taking the whole chart into consideration it can be identified that the rich countries having a much higher minimum wage than the poorer ones. On the whole I think it is important to have a minimum wage for social and human rights as well as for the high unemployment rate and for the young generation anyway.

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  2. I agree that a minimum wage would be fair but I don’t think this has an positive effect on the labour market. The minimum wage also depends the measure of a social benefit. For example in the Netherlands this causes besides an social benefit so many facilities to recover that someone reaches the level of a minumumloon. Work is therefore no longer worthwhile. If someone out there don’t work with that above a certain level is supplemented by the State it comes to a minimum. Basically it comes down to work toward power, what we also want to introduce only now. Enter a minimum wage means higher wage costs and this will lead to a declining economy. I can not imagine that this would have a possitive effect on the labour market because the costs of the minimum wages can’t be realized. I think it will have a negative influence on the economy and the unemployment will increase. Everybody just have to work. When you are doing a good job you will get an acceptable income and all together we have to ensure a healthy economy, on this way the minimum wages can be realized and working conditions can be improved.

    Reply
  3. I think that minimum wages don’t yield the expected output. I opine, that families or single parents keep on being on the dole. Furthermore I think there will be big impacts on the labour market. Especially low wages jobs would disappear or outsourced to best-cost countries. Addionally controlling the minimum wages causes a higher bureaucracy spending. Furthermore unions lose their importance and the tariff autonomy would be dissolved. Besides companies would have an excuse, if they only pay the minimum wage to their employees, because they can justify it with the states default.

    Reply

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