EU minimum wage law passes despite criticism from Sweden and Denmark

On Tuesday, EU officials hailed an agreement on setting common rules for establishing minimum wages across most of the bloc, though Sweden and Denmark had opposed the move.

EU minimum wage law passes despite criticism from Sweden and Denmark
European Commission president Ursula von der Leyen. Photo: Kenzo Tribouillard/AFP

The negotiations between EU member states and the European Parliament did not fix a nominal minimum salary to be applied, but rather what criteria must be used to ensure an “adequate” level is arrived at in each country.

The rules will be mandatory for 21 of the EU’s 27 member countries once the directive from Brussels is introduced into national statutes, which will take another two years.

Sweden and Denmark said they were against the directive, viewing it as political interference in their national wage-setting systems, based on collective bargaining.

But that is not enough to stop the measure going ahead, as more than 15 of the 27 EU countries back it, providing the necessary qualified majority.

The directive will not apply to six EU countries where collective agreements between unions and employers set salary levels: Austria, Cyprus, Denmark, Finland, Italy and Sweden.

European Commission chief Ursula von der Leyen said the new rules “will protect the dignity of work and make sure that work pays” while respecting “national traditions and social partners’ autonomy”.

Among the criteria to set statutory minimum wages will be weighing them against median salaries in the country and the cost of living, while also ensuring they don’t worsen gender pay gaps.

READ ALSO: Why is Denmark opposed to an EU minimum wage law?

Von der Leyen’s commissioner on jobs and social rights, Nicolas Schmit, told journalists the timing of the agreement was important, coming as the EU grapples with skyrocketing inflation and tight labour markets.

“In the present context, where we have such strong inflation, those on the lowest wages should not be the victims of these inflationary trends,” he said.

He added employers had incentive to back “fair wages,” which he said helped avoid “splitting the society (between) those who have, and those who have nothing”.

EU countries have a wide range of minimum salaries, going from 332 euros ($354) per month in Bulgaria to 2,202 euros in Luxembourg, according to official 2021 figures.

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Denmark has more people in work than before Covid crisis

More people are in work in Denmark than before the coronavirus crisis, according to analysis from the Danish Chamber of Commerce.

Denmark has more people in work than before Covid crisis

During the lockdowns in Denmark, unemployment rose sharply and a record number of people were out of work. But now the trend has reversed.

Out of the country’s 98 municipalities, 90 today have more jobs than in the fourth quarter of 2019, and there are 115,000 more employees in Denmark, which is an increase of 4.1 percent.

Ringsted and Brøndby top the list of municipalities with the most jobs. According to the Danish Chamber of Commerce, this may be due to the fact that there are several large companies in those municipalities.

A record number of foreign nationals are also active on the Danish labour market and now comprise over 10 percent of all people in full time employment.

The figure, reported by newspaper Berlingske, comes from an analysis by the Confederation of Danish Industry (Dansk Industri, DI), which found that 266,000 foreign nationals, reported to be a record number, were working full time in Denmark in October 2021.

As such, foreigners comprise 10.5 percent of total employment, according to the report.

The Danish government is currently negotiating with parliament over potential solutions to labour shortages and the need to attract more international workers.

Several political parties have suggested they favour reducing a minimum salary requirement used to assess work permit applications.

At the moment, you can get a work permit on the pay limit scheme if your salary is at least 448,000 kroner a year. 

The government has proposed that the annual salary requirement be lowered to 375,000 kroner over a two-year period, to allow more international workers into Denmark on the scheme.

However, four conservative parties – the Conservatives, Liberal Alliance, Liberals and Nye Borgerlige (New Right), would like the annual salary permanently reduced to 360,000 kroner but do not want the scheme to include nationals of Muslim countries in North Africa and the Middle East.

READ ALSO: How can you get a work permit in Denmark if you are not an EU national?