Politics and Analysis

The EU must not meddle in wage formation

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The EU Commission has today presented its second consultation document on a European minimum wage. Both sides in the labour market in Denmark are worried and will, over the coming months, seek to influence the final proposal so that it poses no threat to the Danish labour market model.

As expected, the EU Commission’s proposal does not contain any specific instruments and, like the EU Commission’s first consultation document, is set out in relatively vague terms. It is repeated that the objective here is not to undermine any efficient, national models.

“Since the first consultation document was published in January, we have been given numerous guarantees and promises from the Commissioner for Employment, Nicolas Schmit. “However, we have not yet received an answer to how it can be guaranteed that our agreement model cannot be put under pressure, for example, by a case at the European Court of Justice,” says Lizette Risgaard, President of the Danish Trade Union Confederation (FH).

According to the EU’s constitution, wages are a national matter

EU does not have the right to determine wage levels in the individual countries. This is stated in the treaty – the EU’s constitution. Wages are a national matter.

“The EU does not have the right to determine wage levels in the individual countries. This is stated in the treaty – the EU’s constitution. You see, wages are a national matter – and there is a very good reason for this: There are no two European labour markets that are identical. Therefore, wages should also be agreed wherever the insight into the market is greatest. In the member countries themselves,” says Jacob Holbraad, CEO of the Confederation of Danish Employers (DA).

Both DA and FH acknowledge that many problems are best resolved jointly. The European Commission should concentrate on this instead of risking destroying something that actually works. It was clear from the background documents for the first round of consultations that in those countries where employees find it most difficult to live on their wages, there is already a mandatory national minimum wage.

In partnership with the Danish government, we will do everything we can to ensure that there are no final proposals from the European Commission that damage our labour market model.

Eventually, it should be self-evident that a European minimum wage is not the way forward, say FH and DA.

Twelve-week consultation period

Now, a 12-week consultation period lies ahead, during which both sides in the labour market at European level have the opportunity to submit statements. On that basis, the European Commission will publish a final proposal for the initiative before the end of 2020.

Both FH and DA will use the period ahead to scrutinise the consultation document and carry out a thorough assessment of the details in the proposal.

“In partnership with the Danish government, we will do everything we can to ensure that there are no final proposals from the European Commission that damage our labour market model,” says Jacob Holbraad.

“We will fight tooth and nail against any binding EU legislation on the minimum wage, and hope that the European Commission regains its composure with proposals for how to secure sustainable growth and good jobs in the EU,” says Lizette Risgaard.