More than two years after the European Union’s flagship minimum wage directive was voted into law by an overwhelming majority in the European Parliament, most member states have yet to comply with its provisions. Delays in applying the directive condemns millions of low-paid workers across the bloc to effective pay cuts after years of soaring inflation, threatening the credibility of newly reelected European Commission President Ursula von der Leyen.
The idea of harmonizing minimum salaries across the EU has been knocking around the corridors of Brussels for decades. But the urgency of implementing a directive on the issue had diminished significantly by the 1990s, as many individual member states introduced national minimum wage laws or established “legal floors” on wages. These were usually set through collective bargaining, whereby individual workplaces or sectors negotiate wages, working conditions and benefits through a union or another approved representative organization.
Since the global financial crisis of 2008, however, support for an EU-wide initiative has risen significantly, as wages for the majority of ordinary workers stagnated during the 2010s before declining sharply over the past few years in the face of rampant inflation. By contrast, remuneration for CEOs, as calculated by the nonpartisan Economic Policy- Institute, grew from 21 times greater than a typical worker’s pay in 1965 to about 290 times greater in 2023.