Dr. Thorsten Schulten Theses for a European Minimum Wage Policy GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Dr. Thorsten Schulten A joint Proposal made by Researchers from WSI (Germany), Denknetz (Switzerland) and IRES (France)

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November The Fundamental Meaning of Minimum Wages 2.Minimum Wages in Europe – a Brief Overview 3.Proposals for a European Minimum Wage Policy

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level — I mean the wages of a decent living.” U.S.-Präsident Franklin D. Roosevelt (1933 ) Fundamental Idea of Minimum Wages:

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005  United Nations Declaration of Human Rights (1948)  ILO Conventions on Minimum Wages (26, 131)  European Social Charta of the Council of Europe (1961)  Community Charter of Fundamental Social Rights for Workers of the EU (1989)  National Constitutions (e.g. Belgium, Italy, Spain, Portugal, Czech Republic) Normative Foundations of an „Equitable“ or „Fair“ Wage:

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005  Defining a socially accepted Minimum Wage Level  Limiting the Low Wage Sector  Preventing Working Poor  Having a more Egalitarian Wage Structure  Fighting Gender Pay Gap and other Forms of Wage Discrimination Social Aims of Minimum Wages

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005  Preventing Downward Competition on Wages  Promoting more Productivity-oriented Strategies at Company -Level  Stabilising Private Demand  Counteracting Deflation  Having almost no direct Impact on Employment !!! Economic Function of Minimum Wages

Statutory Minimum Wage per Hour in Euro (November 2005)

Statutory Minimum Wage per Months in Euro (November 2005)

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November „Pure Political“ Determination by the State (USA) 2.Political Determination by the State with Institutionalised Consultation of Trade Unions and Employers (UK, Spain, Portugal) 3.National Bipartite or Tripartite Bargaining (Belgium, Greece, Ireland) 4.Indexation of Minimum Wages to the Development of Prices and/or Average Wages (France, BeNeLux-Countries, Poland) Mode of Determination and Adjustment of Statutory Minimum Wages

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Functional Equivalents in Countries with no Statutory Minimum Wages  Scandinavian Countries : High Trade Union Density  Austria: High Bargaining Coverage through Obligatory Membership within Employers’ Association  Italy: High Bargaining Coverage de facto guaranteed by the Constitution  Germany:No Functional Equivalent !!!

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Theses for a European Minimum Wage Policy A Joint Proposal made by Researchers from  Wirtschafts- und Sozialwissenschaftliches Institut (WSI) in der Hans-Böckler-Stiftung, Germany  Denknetz, Switzerland  Institut de Recherches Economiques et Sociales (IRES), France

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Wage Policy in Europe  Wages purely viewed as Cost Factors  Wages as a Key Variable for Competitiveness  General Tendency towards Wage Moderation  Increasing Wage Dispersion  Extension of Low Wage Sector and Working Poor

Low Pay Sector in Europe 2000 (in % of all Employees) Source: European Commission

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Community Charter of Fundamental Social Rights for Workers of the EU from 1989 Right for an equitable wage: “All employment shall be fairly remunerated. To this end, in accordance with arrangements applying in each country, workers shall be assured of an equitable wage i.e. a wage sufficient to enable them to have a decent standard of living“ (Title 1, 5).

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 European Norm for National Minimum Wages  60% of the Average National Wage  50% as a Short-Term Interim Target

Monthly Minimum Wage in % of Monthly Average Wage in Industries and Services 2004

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Implementation of a European Minimum Wage Policy  Political Level: EU Open Method of Coordination  Trade Union Level: European Coordination of Collective Bargaining

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Implementation of a European Minimum Wage Policy via the Open Method of Coordination European level:  Determination of joint Targets and Time Schedules  Monitoring and Evaluation of National Initiatives National level:  National Action Plans to reach European Targets

Dr. Thorsten Schulten GUE/NGL in Cooperation with Forum Social Europe Conference on “The European Social Model” Brussels, 9-10 November 2005 Implementation of a European Minimum Wage Policy via Coordination of Collective Bargaining European level:  Determination of joint Targets for National Bargaining  Monitoring and Evaluation of National Bargaining Policy National level:  National Trade Union Campaigns to reach European Targets