The conclusion of the Scientific Committee on the integration of the European Directive 2022/2041 for adequate minimum wages was received from its President, Professor Patrina Paparrigopoulou, by the Minister of Labor and Social Security, Niki Kerameos.
The Directive aims to improve the living and working conditions of workers in the European Union and establishes a framework for the adequacy of legal minimum wages and the promotion of collective bargaining.
- On the one hand, Member States are required to define clear criteria and objective procedures for determining and updating legal minimum wages, while they may use a mechanism for automatic adjustment of minimum wages.
- On the other hand, member states are invited to draw up an Action Plan to strengthen collective bargaining.
French “key” to determine the minimum wage
In the conclusion issued by the Commission, it proposes the use of a mathematical formula as a more objective way of calculating the minimum wage, following the example of the French system and other European countries.
In the proposed system, the determination and adjustment of the statutory minimum wage and daily wage is done automatically, based on a rate resulting from the sum
a) the annual percentage change in the consumer price index between 1 July of the previous year and 30 June of the current year for the lowest 20% of the household income distribution and
b) of half the annual rate of change in the purchasing power of the general wage index over the same time period.
In other words, the Commission proposes that the automatic adjustment of the minimum wage should also take into account inflation and the increase in the productivity of the economy.
This mechanism would preserve the purchasing power of low-income households and allow minimum wage earners to benefit from increased productivity and real wages in the economy. The application of the proposed mathematical formula can start in 2027, after the integration of the relevant Directive into national law and the preparation by ELSTAT of the necessary calculation indicators.
It is pointed out that the minimum wage to be established through this system cannot be reduced, thus ensuring the general level of protection of workers.
Advantages
Its advantages include:
1. the predictability of the future course of the minimum wage, which helps to reduce the uncertainty of workers and employers and, consequently, supports on the one hand the planning of workers and on the other hand the operation of enterprises while encouraging investment,
2. the introduction of the criteria of the Directive in a way that protects the formation of the minimum wage from deviating from the possibilities of the real economy, thus ensuring long-term economic sustainability,
3. protecting the purchasing power of the bottom 20% of the household income distribution;
4. the fairer distribution of wages for the entire Greek society,
5. the overall strengthening of the credibility of the country’s economic policy.
At the same time, it is proposed to create a Consultation Committee, which will consist mainly of representatives of the social partners, in order to formulate an opinion on the amount of the legislated minimum wage and its updating, thus upgrading the role of the social partners in the process.
In addition, it is proposed to draw up a road map (“action plan”) to strengthen collective bargaining and increase the percentage of workers covered by collective bargaining, with the active participation of the social partners.
In the next period of time, the Minister of Labor and Social Security, Niki Kerameos, will take initiatives for consultation and extensive dialogue with the social partners on the basis of the conclusion.
The Minister of Labor and Social Security, Niki Kerameos, said: “The incorporation of the Adequate Minimum Wages Directive is an additional important step in the direction of further ensuring decent working conditions for all citizens. The Commission’s proposals will form the basis of the Government’s dialogue with the social partners in the immediate future, so that the final text will then be submitted to the Parliament for discussion and voting. I would like to express my warm thanks to the President of the Scientific Committee, Professor Patrina Paparrigopoulou, and to all the members of the Committee for their valuable contribution to this important project”.
Source OT
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