The term ‘minimum wage’ refers to the regulatory restriction on the lowest rate payable by employers to workers. Statutory minimum wages are regulated by formal laws or statutes. Collectively agreed minimum wages are stipulated within collective agreements between trade unions and employers. The term ‘national minimum wages’ is used when countries have one (or more) basic rates covering workers nationwide. They can be either statutory or collectively agreed.
Most EU Member States have a national minimum wage. But its level, adjustment mechanisms and coverage vary.
Eurofound’s e-survey on Living, working and COVID-19 shows that nearly half of households are struggling to make ends meet.
Eurofound provides regular updates on pay in the EU, including an annual study on how minimum wage rates have developed across the EU (as well as Norway), reviewing how national governments and social partners engage in setting new rates. It also looks at the concept of a living wage, aimed at guaranteeing workers and their families a decent level of living and social participation in response to the inadequacy of income for many working households reliant on existing national minimum wage rates.
The annual review on minimum wages for 2024 summarises how minimum wage rates were set during 2023. Eurofound published a set of minimum wage country profiles in May 2024 which provide detailed background information on how minimum wages are set and regulated in the EU and Norway.
In an earlier study on pay in Europe in the 21st century, Eurofound explored the implications of a hypothetical scenario of a minimum wage coordinated at EU level and set at 60% of the median national wage.
COVID-19 is likely to impact the ongoing minimum wage debate, as many workers delivering essential services during the pandemic are at the bottom of the pay ladder, like workers in retail, food-supply chains or care roles. Others low-wage workers, like workers in the accommodation and food sector, or in leisure and entertainment services, were the first affected by unemployment during the pandemic. It will be important to see how minimum wages can contribute to the policy measures governments and social partners are applying to cushion the economic and social impacts. Eurofound’s e-survey on Living, working and COVID-19 shows that nearly half of households in the EU are struggling to makes ends meet. Minimum wages could play a policy role in stabilising incomes.
Most EU countries have a national minimum wage. A related but distinct concept is that of a living wage, which is a wage designed to secure a basic but acceptable standard of living for its earner (and, in some cases, household dependents). The living wage rate is based on a detailed, regularly updated costing of the basic services and goods required for such a standard of living and is intended in part to reflect the inadequacy of prevailing statutory minima for that end. Living wage campaigns are generally voluntary and rely on coalitions of interest groups, trade unions and employers working together. These campaigns can take on an advocacy role (Ireland) as well as an accreditation role (UK) where organisations are formally accredited as living wage employers. In line with the fair wage provisions set out in the European Pillar of Social Rights, Eurofound research aims to provide policymakers with a practical guide to the living wage concept.
Most EU Member States have a statutory national minimum wage in place, although its level, adjustment mechanisms and coverage vary. Austria, Denmark, Finland, Italy and Sweden have minimum wages set within collective agreements, while Cyprus has statutory rates for different occupations.
The EU institutions jointly proclaimed the European Pillar of Social Rights in November 2017, setting out the EU’s commitment to fair wages for workers. This includes ensuring adequate wages for workers to allow them and their families to have a decent standard of living, safeguarding the ability of the low-skilled and young workers to find employment, while also making work financially attractive.
The European Commission of 2019–2024 put a reform initiative for an EU minimum wage on the agenda. The Commission’s vision for a strong social Europe prepared the way for an Action Plan to implement the Social Pillar. On 28 October 2020, the Commission put forward a proposal for an EU Directive on adequate minimum wages. This was followed by a political agreement between the European Parliament and the Member States on 7 June 2022. The Minimum Wages Directive was adopted in October 2022. It aims to improve standards of living with a view to achieving upward convergence and reducing in-work poverty, wage inequalities, and the gender pay gap. By November 2024, Member States have to transpose the directive into national law, and ensure that statutory minimum wages are adequate.
Eurofound’s work on minimum wages links in with the Commission’s 2019–2024 priority on an economy that works for people.
Eurofound's minimum wage country profiles describe how minimum wages are regulated and set in countries of the European Union and Norway. They can be read as background information for Eurofound’s annual review of minimum wage setting series.
Following a request from the European Parliament and decision from the European Commission, Eurofound is carrying out a pilot project on the 'Role of the minimum wage in establishing the Universal Labour Guarantee' in the EU, running from 2021 to 2023. The purpose of this pilot project is to provide data and research evidence that will feed into the monitoring of the European Commission’s initiative on adequate minimum wages. The main objectives will be examined in three distinct modules:
