Decent minimum wages across the EU

News | 05 February 2020
Patrick Belser, Senior Economist at the ILO, participated in a workshop on "Decent minimum wages across Europe" at the European Parliament. He discussed key principles to take into account when fixing minimum wages.

The ILO Minimum Wage Fixing Convention No. 131 and the ILO policy guide on minimum wages are important references for the minimum wage discussion in the European Union.

Belser reminded participants that the ILO Centenary Declaration for the Future of Work adopted in June 2019 calls for adequate protection of workers, including respect for their fundamental rights; an adequate minimum wage, statutory or negotiated; maximum limits on working time and safety and health at work.

According to the ILO Minimum Wage Fixing Convention No. 131, minimum wage systems should have a broad scope of application. “Exclusions are possible but should be kept to a minimum, and excluding workers in vulnerable situations defeats the purpose of having a mimumum wage,” he said.

Minimum wages should be set and operated with the full consultation of social partners, or their direct participation on the basis of equality. Independent experts, representing the general interest of the country, should also be involved. Minimum wages should be set at an adequate level, taking into account the needs of workers and their families as well as economic factors.

“In many countries around the world there is little regularity or predictability in minimum wage adjustments,” said Belser. However, the rate(s) should be adjusted from time to time to take account of changes in the cost of living and other economic conditions.

Countries should take appropriate measures to ensure the effective application of minimum wages, such as labour inspections, adequate sanctions, information campaigns and training activities. “The minimum wage has to be clearly defined, he said, otherwise there will be confusion on all sides.”

Finally, it is important to monitor the effects of minimum wages, to ensure that there is compliance and that adverse effects are minimal. Recent evidence shows that when minimum wages are set at an adequate level, taking into account the needs of workers and their families as well as economic factors, they can raise the wages of low-paid workers – many of whom are women – without having a significant negative effects on jobs.