Data on wages and collective bargaining show that wage trends remain subdued and there is no upward convergence. This is predominantly due to:
- A failure in ensuring the respect for the right to collective bargaining and a growth in trader union busting practices have led to a reduced coverage of collective agreements.
- Statutory minimum wages which – where they exist – are in the majority of Member States set below a threshold of decency and do not guarantee a decent standard of living for workers and their families and do not provide for the involvement by social partners.
- Stability and Growth Pact (SGP) rules that impose excessive pressure on national systems and Troika programmes that destroyed collective bargaining.
- Too many workers not covered by collective agreements but only by personal contracts
Huge differences in wage levels and collective bargaining persist among and within Member States. This gives rise to a situation of social dumping that has predominantly negative effects on the lowest segment of the labour market. In addition, inappropriate and unfair wage-setting related to non-respect of collective bargaining rights, also has a negative impact on wages higher up the pay scale leading to a reduction in internal demand as the main driver of economic growth in the EU – in particular in a situation of economic crisis as currently caused by the COVID 19 pandemic.
It is therefore essential to ensure that workers’ rights to collective bargaining and fair remuneration are fully respected in all Member States. It is necessary to set a level playing field within the internal market and trigger an upward convergence in wages. The European Directive on adequate minimum wages plays a key role in this. This Directive needs to ensure that statutory minimum wages cannot fall below a threshold of decency and are adequate, and are defined with the full involvement of social partners. It furthermore needs to increase the capacity of trade unions to bargain for fair wages and working conditions and to tackles union busting practices and it must safeguard well-functioning collective bargaining and industrial relations systems.
Upward wage convergence in Europe would bridge the wage gaps between and within countries (particularly between East and West) and improve the wage share in the economy, reduce inequalities and enhance internal demand and productivity. This can be achieved through:
- The European Directive on adequte minimum wages must be amended to ensure the respect of trade unions’ right to collective bargaining, an end to trade union busting practices and a guarantee that statutory minimum wages increase;
- Ensuring that only employers that respect workers’ right to bargain collectively and implement the relevant collective agreements can be awarded public contracts, grants, funds, CAP payment, SURE, the Recovery Plan etc;
- Actions and measures that promote collective bargaining rights and capacity, including within the framework of economic and social governance tools, such as the European Semester, the Employment Guidelines, the EPSR and the Social Scoreboard.
An EU directive to address the gender pay gap and binding pay-transparency measures, including the clarification of the principle of equal pay for work of equal value enabling workers and trade unions to access information on criteria deciding pay levels and to bargain for work of equal value, is also needed in order to guarantee equal pay between men and women.
Actions aimed at setting a minimum floor of rights in the EU, a level playing field in the Single Market
- A Framework Directive to ensure that statutory minimum wages are not set below a threshold of decency and are defined with the involvement of social partners
- An EU directive to address the gender pay gap and binding pay-transparency measures, including the clarification of the principle of equal pay for work of equal value enabling workers and trade unions to access information on criteria deciding pay levels and to bargain for work of equal value.
Actions aimed at establishing upward convergence in living and working conditions
- 1. National Action Plans, developed by Member States in consultation with the social partners, to promote collective bargaining, as part of a Framework Directive on collective bargaining and fair minimum wages.
- In the EU Semester process: programme of pro-wage measures.