Delivering on the European Pillar of Social Rights: The Case for a Minimum Wage Framework at EU Level and its impact on the region of the Western Balkans

The National Confederation of Workers' Councils (MOSZ) organized an online seminar on 14 October 2020 in Budapest with the title „Delivering on the European Pillar of Social Rights: The Case for a Minimum Wage Framework at EU Level and its impact on the region of the Western Balkans”. The seminar was organized within the framework of the EZA special project for workers’ organisations in the Western Balkans, with the support of EZA and of the European Union.

The seminar was attended by representatives of workers’ organisations from Poland, Hungary, Germany, Italy, Belgium, Slovakia, the Czech Republic, Bulgaria, North Macedonia and Romania.

The opening speech was given by Imre Palkovics, President of MOSZ in the online space. Imre Palkovics said: The issue of the minimum wage is especially important now during the coronavirus pandemic. Worker poverty still exists in several countries, which is unacceptable, and combating it is the most important task for trade unions.

He thanked EZA for making the online conference possible and thanked the interpreters for being available during the pandemic period.

Tünde Molnár-Vojkó, an economic analyst at MOSZ, spoke about the chances of introducing a minimum wage level in the European Union. She analysed the aspirations and attempts in this direction, as well as the attempts of MOSZ to catch up with wages in Eastern Europe.

In her presentation, she said that the figures are very different within the European Union: while the average minimum wage is around € 1,400 in France and Germany, in some Eastern European countries it is just over 10% of it. E.g. the rate of taxes also differs in terms of the minimum wage: in the case of North Macedonia, Hungary and Romania, the minimum wage is taxed above 30%. By 2024, the EU wants some forms of standardization of the minimum wage in all European countries. It is envisaged that the minimum wage would not be less than 60 percent of the median wage in a given country. Since the median wage calculation does not take into account excessive wage differentials (which is especially the case in poorer countries), it is a question of whether this method really provides a good solution.

Emil Antonov, the International Policy Expert at the Confederation of Labour (PODKREPA), presented employment opportunities and labour market conditions in the Balkan region. He said they consider the “Balkan” as stigmatizing and the term “Balkanization” as pejorative. There are also huge differences in the minimum wage within the Balkans. The Western Balkans are not a member of the EU. It should not be forgotten that the Western Balkans region was part of the Ottoman Empire back in the 19th century. There are typically a significant number of workers in this region who obtain a Bulgarian passport in order to work in Western Europe. Later, these workers also evict their families as part of family reunification. The pandemic will also have unpredictable economic consequences in this area. The best investment is education here, this is the way of the future in the Western Balkans.

György Lajtai, Director of the Interest Protection Advisory Service Association (ÉTOSZ), spoke about the minimum wage from the aspect of the minimum cost of living. In Eastern Europe, it can be seen that the majority of people have accepted that they get the amount they need to consume food for their work. Housing, active rest, learning, savings are excluded from this calculation. The subsistence level means the level of poverty. The minimum wage in Hungary started to increase in 2015, the social partners concluded a 6-year wage agreement in 2016 and by 2018 the minimum wage managed to catch up with the subsistence minimum.

Veselin Mitov, Vice President of EZA and International Secretary of PODKREPA, said the biggest social issue at the moment is how the second wave of Covid19 will affect the labour market. The pandemic highlights how unprotected workers are from major shocks to the economy. Billions of people around the world working in the informal economy are most exposed to the economic consequences of Covid19. "We have to face the fact that the current economic crisis is the biggest global recession since the global economic crisis that began in 1929." said the secretary. 70 percent of the world’s population has no social protection. The only possible EU response to this is a job-creating approach, which can be helped by the SURE program. Veselin Mitov sees the task of trade unions primarily in this situation as the dispelling of misinformation. Europe would need a new social treaty based strictly on tripartite conciliation. There is an urgent need for a thorough development of the European minimum wage concept. It is not possible to set a uniform minimum wage, uniformity in Europe can mean 60 per cent of the median wage and a minimum of 50 per cent of the average wage.

Dr. Judit Ivány Czugler, Vice-President of MOSZ added: it is a legally difficult task to regulate the European minimum wage uniformly. The principle of equal treatment must be taken into account. When setting the minimum wage, care must also be taken to meet the needs of the worker and his family. The European Commission's starting point is that the minimum wage must be set in such a way as to enable the worker and his family to make a decent living and not to be tricked.

In conclusion, Dr. Imre Szilárd Szabó, Head of Office of MOSZ, summed up what was heard. He explained that the online seminar raised extremely exciting issues. In addition to the fact that face-to-face meetings offer greater opportunities for spontaneous exchanges, a number of exciting question-and-answer situations have emerged, and the number and composition of participants suggests that this mode of discourse may have offered greater opportunities for participation.