From January 2023, the minimum wage in the Netherlands will soar by 10%.
With skyrocketing prices and inflation, globally, many countries are on the same trend. In Europe, in particular, some adjustments are being made. Even if the Dutch represents the highest jump on the continent so far, many other member states are intervening, following the European directive on minimum salaries (proposed by the Commission and approved by the EU Parliament on 14th September.)
In his speech from the throne on Prinsjesdag (or budget day) – the annual address to the Parliament to set the main features of government policy for the coming year -, the Dutch king Willem-Alexander remarked: from 2023, “Housing benefit and the child budget will also rise. For working people, income tax will be cut, and the employed person’s tax credit increased, so that it pays more to work“. The measures are part of the 18 billion € plan that will include other interventions like cuts on fuel duty and investments in education. Yet, as the king further acknowledged, “Even with a package of this magnitude, not everyone can be compensated fully for all the price rises.”
Discussions on introducing limits on the minimum salaries for employees is no news. But the pandemic, climate crisis and new and ongoing conflicts, with all their consequences on workers, have pushed regional or national governments ahead in this sense. So much so that many countries have recently revisited what the International Labour Organisation describes as “the minimum amount of remuneration an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.” Undeniably, then, the trend has been gaining momentum worldwide.
According to the WageIndicator Minimum Wage Database, in the last weeks of September only, Japan, Monaco, most provinces of Canada, and Thailand increased their minimum wages. While the Philippines, Maharashtra (India), Chile, and Argentina, among others, have raised or updated their levels in the past two months.
The European Union
In the European Union, similarly to the Netherlands, Germany has increased its lower wage from 10.45 to 12 €, and France, where revised limits entered into effect in August this year, raised the minimum to 11 € per hour, and 1.679 € per month.
Italy, instead, is among the six member states where there is no statutory minimum wage, and here, like in Austria and Sweden, levels are negotiated collectively. After attempts to introduce some changes were tried in the past (with the JobsAct, for example), still no specific law requires a limit.
Takes on the topic are contrasting, as The World Economic Forum clarified in August. “Opponents of a statutory minimum wage argue that increased labour costs will force businesses to raise prices, thereby causing inflation. They also say companies may lay off workers leading to higher unemployment. However, advocates of minimum wage legislation say it stimulates the economy by increasing consumer spending power, thereby reducing poverty and helping address inequality“. Those who are in favour of a minimum salary, see it as a way of containing, if not stopping, the exploitation of workers and helping lower-income families.
Whichever the prevalent view may be, even if it the use of some minimum wage policies is globally extensive*, an estimated 266 million workers around the world continue to earn less than the limit existing in their country – be it because of some ineligibility or non-compliance by their employers. And in the general picture, the situation is worst for one definite group.
As often part of the most vulnerable among the workers, women continue to stay behind, not only in terms of minimum salary but, as explored not long ago on these pages, when it comes to equal pay in general. No matter the level of their career or function.
* According to Pew Research Center, as of May 2021, “In at least 115 countries, the central government (or an official such as a labour minister) sets minimum wages by regulation, order or decree“, typically under some authorizing law.
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