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 .