The Covid-19 crisis has sorely impacted the European economy like never before. During the second quarter of this year, the euro zone’s GDP decreased by 12,1%[1], because of the quarantine. This is the worst economic downturn since the publication of the start of the time series[2] in 1995 (a time series is a sequence of data which shows how the value of a variable changes over). The coronavirus has also impacted European employment with a decline of 2,8%[3] in the second quarter in comparison with the previous one. This crisis has affected companies as well as European households. A lot of workers lost their jobs or saw a decrease in their incomes. The pandemic has highlighted the pay gap in Europe, which was already present, and the hard fate of the European low income workers. In response to this economic crisis, the European Union will implement the Recovery Plan. The latter is a particular agreement negotiated between the Member States, which allows the European Commission to borrow 750 billions euros[4] in order to tackle the economic crisis by loaning directly to the  Member States. In addition to this, the European Commission triggered a real revolution in the building for Europe. Indeed, Ursula Von der Leyen, president of the European Commission, announced her will « to set up a framework for minimum wages » during her 2020 State of the Union address. This is an historic step for a social Europe.

  As a matter of fact, discussions on a framework for minimum wages in Europe began before the coronavirus crisis. Indeed, social partners got together in the first consultation in January and February 2020[5]. However, the economic crisis caused by the pandemic revealed the weaknesses of the EU in terms of social equality. Minimum wages could be a trigger for a more equal Europe, that does not exist yet. In fact, an Union that promotes values like integration and cooperation should cover its workers, as it is a matter of dignity and humanity.

  The founding fathers of the EU asserted their will to protect European citizens and European workers in the Rome Treaty in 1957. Article 117 states that « Member States agree upon the need to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonisation while the improvement is being maintained [6]».  They thought that an improvement of the working conditions could be possible only thanks to economic integration[7]. Nonetheless, it did not work because of differences between economic systems of the EU Member States. In 1957 was created the European Economic and Social Committee, which represents « employers’ and workers’ organisations[8] ». This started the European Social Dialogue which « refers to discussions, consultations, negotiations and joint actions involving organisations representing the two sides of industry » [9].

  In 1989, The Community Charter of the Fundamental Social Rights of Workers was adopted. The latter is an agreement which highlights the values of the European labour law[10]. Three years later, a social protocol was linked to the Maastricht Treaty in 1992. These agreements were encouraging the building of a social Europe, but they had a limited scope. Indeed, legal tools to uphold the Community Charter do not exist.[11]. During the 2000s, the timid building of a social Europe was stopped because of the European enlargement in 2004[12]. Indeed, there has been a gap between the social needs of European western countries and European eastern countries. As a result, the EU Member States could not agree on a Zuropean social policy. Moreover, the economic context continued to worsen[13]. The EU often imposed austerity policies on Member States, which did not help the implementation of a European social policy.

  Nowadays, the necessity to have a common social policy has never been so strong, particularly regarding a European framework for minimum wages. In the EU, about one out of six workers earns a low wage[14]. This number increased between 2006 and 2014 from 16,7% until 17, 2%[15]. In the same time, 60% of workers who earn a low wage are females in 2017[16]. It represents a gender pay gap which is unacceptable. Moreover, minimum wages could not protect workers from poverty in six EU Member States in 2018. Indeed, some workers in the EU are not protected by a minimum wage like in Italy where they represent 20% of workers[17]. That is why we need a fair European framework for minimum wages.

  A framework for minimum wages in the EU could protect workers from poverty. Indeed, it would support the internal demand when there is an economic slowdown. The EU economy would be more resilient against crisis. Moreover, it would reduce the income inequalities by enabling poor workers to save money and by reducing the gender pay gap. It could be also a sign of cohesion and cooperation between the EU Member States. Although European countries do have not the same level of  economic development, this initiative would ensure a fair competitiveness in the European Internal Market by avoiding partly the social dumping[18], that would restore confidence between EU partners. Last but not least, this concrete enterprise could strengthen EU legitimacy among European citizens by embodying the first step for a social Europe.

    Thus, the initiative taken by the Commission can be saluted. However, it will not be easy to establish a fair framework for minimum wages because of Member States’ different social systems. Although there are similarities, minimum wages can be very different from one country to another, and all the Member States have not the same structure to protect their workers. Indeed, minimum wages varied from 312 euros in Bulgaria to 2142 euros in Luxembourg in the first quarter of 2020[19]. In the EU, we can divide countries in three groups :

Firstly, countries where minimum wages are below 500 euros like Romania.

Secondly, countries where minimum wages are between 500 euros and 1000 euros like Portugal.

Lastly, countries where minimum wages are above 1000 euros like France[20].

When we compare minimum wages with purchasing power in each Member State, the gap between countries is generally smaller than when we just compare Member States’ minimum wages.[21].  Moreover in the EU, 21 out of 27 Member States have a common minimum wage for all national workers, which is implemented by the national government.  The 6 other European countries like Sweden have a minimum wage which is negotiated between the social partners[22] or set by activity[23] branches[24].

  The European Commission faces another challenge while implementing a framework for minimum wages in Europe, as some countries like Finland or Denmark are reluctant about this framework[25]. Indeed, collective bargaining between trade unions and employer organizations set up the minimum wage. Therefore, it is generally higher than in the other European countries. Although all of their workers are not protected by a minimum wage, social partners in these countries are afraid that the European Commission’s initiative would lead to a decline in their income[26].

  As we can see, the necessity to have a framework for minimum wages is important in the EU and the challenge to implement it may be huge. In June 2020, the European Commission triggered the second consultation between the European social partners[27]. At the end of the discussions, the European Commission will either sign an agreement with the social partners or propose a directive[28] to the European Parliament[29]. The Commission does not wish to impose a common minimum wage in the EU, or change social systems in each Member State[30]. On the contrary, it wants to respect the specificities of European countries. The Commission could set goals, adapted to each Member State. They would choose the way in which they want to comply with these goals. After the first consultation in january and february 2020, the European Commission has seemed to disseminate collective bargaining[31] in Europe in order to protect workers who do not earn a minimum wage. Indeed, minimum wage is generally higher when it is negotiated by social partners.

  What’s clear is that the Commission wants to protect all the European low income workers with a fair minimum wages system. The word « framework » is interesting because it shows the will of the European Commission to respect social differences between Member States. Now, we have to wait to see what the Commission will propose as it faces a lot of challenges to implement its framework for minimum wages. However, it is good news that the EU wishes to take care of the European citizens. If this initiative is successful, it may pave the way for a more social European Union.

  « Minimum wages work – and it is time that work paid. », Ursula Von der Leyen, 2020 State of the Union address.

[1] « Communiqué de presse », Eurostat, 14 August 2020.

[2] Ibid.

[3] « Communiqué de presse », op.cit.

[4] European Commission, « Recovery plan for Europe », ec.europa.eu.

[5]European Commission, « Salaires minimum équitables : la Commission lance la deuxième phase de consultation des partenaires sociaux », ec.europa.eu, 3 June 2020.

[6] Treaty of Rome, 1957.

[7] Alice Cros, « pour un salaire minimum européen », Eurocité, 26 May 2016.

[8] « European Economic and Social Committee (EESC) », eesc.europa.eu.

[9] European Commission, « Social dialogue », ec.europa.eu.

[10] « Charte communautaire des droits sociaux fondamentaux des travailleurs », Organisation Internationale du Travail.

[11] Alice Cros, op.cit.

[12] Ibid.

[13] Ibid.

[14] « A wage is low when it is below two thirds of the median wage ».

[15] European Commission, « Seconde phase de consultation des partenaires sociaux au titre de l’article 154 du TFUE sur une éventuelle action visant à relever les défis liés à un salaire minimum équitable », ec.europa.eu, 3 June 2020.

[16] Ibid.

[17] Ibid.

[18] « The practice whereby workers are given pay and / or working and living conditions which are sub-standard compared to those specified by law or collective agreements in the relevant labour market, or otherwise prevalent there », European Commission’s definition.

[19] « Salaires minima mensuels – données semestrielles », Eurostat, last update 17 August 2020.

[20] « Le salaire minimum en Europe », touteleurope.eu, 17 February 2020.

[21] European Commission, « Statistiques sur le salaire minimum », ec.europa.eu.

[22] « The social partners are employer organisations and trade unions that are engaged in social dialogue ».

[23] « A specialized division of a business or other organization », définition, eionet.europa.eu.

[24] Le salaire minimum en Europe », op.cit.

[25] Cécile Réto, « ENTRETIEN. Nicolas Schmit : « Vers un Smic européen mais pas commun », Ouest-France, 14 January 2020.

[26] Anne-Françoise Hivert, « Les pays nordiques vent debout contre un salaire minimum imposé par l’Union européenne », Le Monde, 15 January 2020.

[27] « Salaires minimum équitables : la Commission lance la deuxième phase de consultation des partenaires sociaux », op.cit.

[28] « A « directive » is a legislative act that sets out a goal that all EU countries must achieve. However, it is up to the individual countries to devise their own laws on how to reach these goals », europa.eu, European Commission’s definition.

[29] « Salaires minimum équitables : la Commission lance la deuxième phase de consultation des partenaires sociaux », op.cit.

[30] Ibid.

[31] Ibid.