EU report examines difference in minimum wage

By Ahmed ElAmin

- Last updated on GMT

Related tags European union

A report outlining the wide differences in minimum wages across the
EU, indicates the comparative advantages of setting up operations
in one or another member state.

The report could also provide ammunition to EU legislators who may want to erase this difference so that all members can compete for business on an equal basis. The report, issued by EU agency Eurofound, found that minimum wages range from €82 gross per month in Bulgaria to €1,503 in Luxembourg. By comparision the federal minimum wage in the US is equivalent to €753 euro. However, when purchasing power parity is used to make the comparision, the differences between the two countries are halved. The highest minimum wages are in Luxembourg, the Netherlands, the UK, Belgium, France and Ireland. For all countries the minimum wage level is between 34 per cent and 50 per cent of average gross monthly earnings in industry and in the services sector, according to Eurofound's annual review of working conditions in the EU. In Slovakia, Romania, Estonia and Poland, the monthly minimum wages add up to less than 35 per cent of average gross monthly earnings. Meanwhile companies in Spain, the UK, Lithuania, the Czech Republic, Latvia, Portugal and Hungary pay a minimum wage that is between 38 per cent and 41 per cent of average gross monthly earnings. The study found that the proportion of workers on minimum wages tends to be higher as these wages increase, and the proportion among women is higher than for men in most countries. Less than three percent of workers in Spain, the UK, Malta, Slovakia, the Czech Republic Slovenia and the Netherlands are paid at the minimum level. In Portugal, Poland, Estonia and Hungary, they make up between three and eight per cent of the workforce. A report last year for the agency by Mark Carley found that all EU member states have some system for regulating pay at the lower end of the lower market, so providing a floor for wage levels across the economy. "With economic globalisation growing ever deeper and international competition intensifying, it is increasingly clear that Europe's industrial relations systems do not exist in isolation, and cannot be studied as such,"​ he said.

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