Aumayr-Pintar, Christine

As the EU economy advanced its recovery following the pandemic, the high rate of inflation throughout 2022 meant that wage setting actors made their decisions under a cloud of uncertainty. While nominal increases in statutory minimum wages reached an all-time high, minimum wage workers in most countries saw their purchasing power decline or just about compensated at the beginning of 2023, based on preliminary harmonised inflation figures. With inflation expected to persist, a further depreciation of minimum wages in real terms can be expected in most Member States, as only a few foresee additional increases in 2023.

Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine. Governments throughout the EU had already started to intervene with policy measures in a bid to cushion the impact of rising fuel and energy prices on citizens, but the situation demanded further responses. This article summarises these first policy responses, as reported in Eurofound’s EU PolicyWatch database, up to the end of May 2022.

As the war in Ukraine has intensified, the cost of food, raw materials and energy prices, already high due to the COVID-19 pandemic, has continued to rise substantially. Ahead of coordinated action at EU level, as agreed by EU energy ministers on 9 September 2022, governments across the EU have started to implement policies to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus. This article summarises these first policy responses, as reported in Eurofound’s EU PolicyWatch database, up to 31 May 2022.

Following the Russian invasion of Ukraine, the mass immigration of refugees into the EU – over 5 million to date, according to the UNHCR – has put European societies under pressure. EU and national-level policymakers together with civil society reacted quickly to accommodate the waves of fleeing Ukrainians. The Temporary Protection Directive grants displaced Ukrainians temporary refugee status, which gives them various rights, including the right to residence, social protection, access to work, education and healthcare.

Minimum wages have risen significantly in 2022, as the EU Member States leave behind the cautious mood of the pandemic. However, rising inflation is eating up these wage increases, and only flexibility in the regular minimum wage setting processes may avoid generalised losses in purchasing power among minimum wage earners. On 6 June 2022, the Council of the EU and the European Parliament reached a political agreement on the Directive on adequate minimum wages proposed by the Commission in October 2020. Once formally approved, EU Member States will have to transpose it into national law within two years.