From 22 to 23 September 2022 took place in Limassol / Cyprus a seminar about “Europe and wage inequality: The introduction of a European minimum wage and the role of the trade unions”, organised by KIKEA-DEOK (Cypriot Institute of Training/Education and Employment (KIKEA) - DEOK), with the support of EZA and funded by the European Union. The seminar was attended by representatives of workers’ organizations from Cyprus, Greece, Bulgaria, Lithuania, Czech Republic, Romania and France.
Important aspect(s) of the seminar
The seminar has offered an excellent opportunity to trade union leaders and other workers’ organizations and stakeholders, to listen and discuss the introduction of a European minimum wage and its impact on the society and labour market. The union leaders participating in the project shared presentations and observations of implementing a national minimum wage in member states. The seminar focused on the role of social dialogue and the consultation that has to take place before any social or employment initiative.
Significance of the seminar’s taking place at this period of time
Seminar took place at a time when the European Directive on the implementation of the minimum wage has to be implemented with two years of adjustment period. There is a critical challenge demanding action and intensive social dialogue initiatives both on national and European level. The seminar’s overall purpose was to exchange of views and experiences between social partners on the issue of wage inequalities and the minimum wage and to strengthen the epistemological tools in the context of the dialogue that is being held for the establishment of the European Minimum Wage.
Discussion topic fields
- The developments in the European Union and policies regarding the introduction of a European minimum wage
- The contribution of the minimum wage to the promotion of economic equality and social justice
- The situation in the EU member states regarding the minimum wage
- The criteria for determining and the adjustment mechanism of the minimum wage
- The role of the social partners implementing a minimum wage
- The effect of the minimum wage on youth employment
- The impact of the minimum wage on reducing the gender pay gap and poverty
Results
For 30 years in Cyprus there was a minimum wage ordinance for 9 professions with most of the workers in these professions not being organised in a union.
Workers without union representation and coverage are at risk of exploitation by employers. Conversely, where workers are unionised, wages and all benefits are guaranteed. The aim of the directive on unionisation is to increase the percentage to 80%. The Ministry's aim is to help strengthen the institution of collective agreements.
The introduction of the National Minimum Wage will protect a fairly large part of the working population. In Cyprus, after persistent consultations, the minimum was established at EUR 885 and EUR 940 after six months of work.
In Europe, there is an increase in the share of low-paid workers due to changes in the economy, resulting in increased poverty, wage inequalities and discrimination. One in ten workers cannot provide the necessities for their family. The minimum wage exists in all European countries and this is achieved through collective agreements. Adequate minimum wage means good living conditions.
However, there are gaps in all economies as there are employers who do not comply with the legislation. Some suggested policy measures are to promote collective bargaining/agreement at 80% and above, encourage Member States to comply with European directives, effective monitoring, public awareness/information on minimum wage protection. Social partners are key to setting decent wages and protecting workers.
The increase in inequality in recent years due to the crisis in EU countries has led to negative socio-economic phenomena such as increase in poverty, reduction of opportunities for advancement, etc.
In 2022 the national minimum wage in the Czech Republic amounts to 651.7 euros per month. It has increased since 2021 but in 2022 inflation is higher. Each professional sector in the Czech Republic has its own minimum.
The minimum wage in Romania is 500 euros where after tax there is 300 euros left. Romanian politicians do not accept EU comments. They have included taxes in the wages, with the result that the wage is greatly reduced. Only employees make contributions and not employers. Romania has the highest percentage of immigrants along with Syria where they are at war.
The unemployment rate in Lithuania is 8.6%. The minimum wage is 730 euros. In 2023 the minimum will rise to 810 euros. The average wage for the 2nd quarter of 2022 was 1116 euros net. The minimum wage in 2013 was 286.60 euros and in 2022 it went to 730 euros. Women in Lithuania are paid 300 euros.
The minimum wage in Greece is 712 euros. The rent for an apartment is 400 - 450 euros and the cost of energy has increased a lot so that families cannot afford it. One in three Greeks receive the minimum wage. The General Workers Confederation is calling for the minimum wage to be raised to 850 euros gross.
The minimum wage in France is EUR 1680 net for 35 hours of work per week. People who work more than 35 hours are paid 25% more on top of their salary. If prices of basic goods increase then the wage is adjusted upwards.
As far as the social partners in Cyprus are concerned, the employers' position is that wages should be agreed through consultation and not through legislation because that way there cannot be flexibility in the various global changes that we face. The trade unions point out that the national minimum wage sets a specific monthly amount but does not indicate how many hours of work this will apply to. The trade unions' position is that the national minimum wage should be set on the basis of 38 hours of work per week and calculated on an hourly basis. It should also be supplemented with other labour rights such as the COLA, the 13th salary, holidays and overtime compensation.
The introduction of a minimum wage is expected to reduce inequalities and discrimination that still exist on a daily basis in the labour market, increase productivity, prevent labour exploitation and create conditions for the proper and smooth functioning of the labour market.