Whatever kind of paid work you do, you want a fair wage. In recent years, wage inequality has grown in many European Union countries, and more employed people have become at risk of poverty. In 2017, the EU institutions announced non‑binding guidelines for policy action – the European Pillar of Social Rights. This affirmed workers’ rights to fair pay that provides a decent standard of living in the EU. Minimum wages set in the EU therefore seek to protect those who work, while minimum income schemes target people who do not get sufficient income from work. Both policy measures are the responsibility of national governments, but the EU supports and complements their action.
The European Parliament has long advocated EU guidelines on minimum wages to prevent poverty. In 2019, it called on the European Commission to put forward a legal instrument to ensure fair minimum wages for workers across the EU. In response, in her 2020 State of the Union speech, Commission President Ursula von der Leyen spoke out against ‘social dumping’ and announced a first EU legislative initiative. A month later, the Commission proposed a directive on adequate minimum wages. These rules sought to ensure workers have access to minimum wage protection set at adequate levels, and, to strengthen collective bargaining as the main instrument for ensuring fair pay.
After much negotiation, the Council and Parliament reached an agreement on the new rules in June 2022. They agreed on a framework to promote collective bargaining on wage setting, as well as adequate statutory minimum wage levels, while also improving effective access to minimum wage protection for all workers. Parliament wanted to oblige EU countries to develop action plans, and to ensure full respect for workers’ rights to join a union and to bargain collectively, but the Council opposed this. EU countries have until 15 November 2024 to implement the new rules.
The Commission then proposed to recommend that EU countries update their minimum income schemes, as existing schemes play varying roles in national social protection systems, with a wide range of design, generosity and accessibility. While the Council adopted the slightly modified recommendation in January 2023, two months later Parliament called on the Commission to consider a stronger legal instrument (a directive) to address the cost of living crisis. However, the Commission responded that no legal basis allowed it to propose a directive.
By ensuring wage inequality stays on the agenda, and by helping shape EU law, Parliament is keeping the pressure up in the debate around minimum wage and minimum income. Parliament’s powers fall broadly into six, often overlapping, domains: law-making, the budget, scrutiny of the executive, external relations, and, to a lesser extent, constitutional affairs and agenda-setting. This graphic shows more examples of areas where Parliament used one or more of its different powers to influence legislation:
For a fuller picture of the European Parliament’s activity over the past five years, take a look at our publication Examples of Parliament’s impact: 2019 to 2024: Illustrating the powers of the European Parliament, from which this case is drawn.
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