Industrial relations

Minimum wages in 2020: Annual review

Report
Updated
13 November 2020
Published
4 June 2020
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Executive summary
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Sejbiet ewlenin

  • In 2019, many countries were debating a further substantial increase to minimum wages beyond 2020, partially in relation to a relative target, partially in absolute terms.
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  • In 2019, many countries were debating a further substantial increase to minimum wages beyond 2020, partially in relation to a relative target, partially in absolute terms.
  • Statutory minimum wages have become fairer as compared to other workers’ wages since the beginning of the millennium (when comparing statutory minimum wages to the median wages of all workers).
  • Despite this upward trend, minimum wages in the majority of countries remain below 60% or even below 50% of median wages. This is particularly true in the central and eastern Member States, which were starting from very low relative levels at the beginning of the millennium and continue to have targets of around or below 50% in their minimum wage regulations.
  • Overall, 7 out of 10 minimum wage workers report at least some difficulty in making ends meet, as compared to less than 5 out of 10 other workers; however, these figures vary greatly across countries. For example, less than 10% of minimum wage workers find it difficult to very difficult in Denmark, Finland, Germany and Sweden; compared to 50% to 60% in Bulgaria, Croatia and Cyprus and 80% in Greece.
  • Governments across Europe are reacting with income stabilisation measures for those affected by the COVID-19 crisis. Minimum wages can have a role in the policy mix to stabilise incomes and thus demand to counteract a downward spiral into recession or depression.
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Sommarju

This report, as part of an annual series on minimum wages, summarises the key developments during 2019 and early 2020 around the EU initiative on fair wages and puts the national debates on setting the rates for 2020 and beyond in this context. The report features how minimum wages were set and tRead more

This report, as part of an annual series on minimum wages, summarises the key developments during 2019 and early 2020 around the EU initiative on fair wages and puts the national debates on setting the rates for 2020 and beyond in this context. The report features how minimum wages were set and the role of social partners. It discusses developments in statutory minimum wages and presents data on minimum wage rates in collective agreements related to 10 low-paid jobs for countries without statutory minimum wages. The report also includes a section on the regional dimension of minimum wages and presents the latest research into the effects of minimum wage changes on wages, employment, in-work poverty, prices and profits. 

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Formats

  • Report

    Last updated date: 
    23 Jun 2020
    Number of pages: 
    86
    Reference no.: 
    EF20005
    ISBN: 
    978-92-897-2116-5
    Catalogue no.: 
    TJ-AS-20-002-EN-N
    DOI: 
    10.2806/543091
    Catalogue info

    Minimum wages in 2020: Annual review

    This report, as part of an annual series on minimum wages, summarises the key developments during 2019 and early 2020 around the EU initiative on fair wages and puts the national debates on setting the rates for 2020 and beyond in this context. The report features how minimum wages were set and the role of social partners. It discusses developments in statutory minimum wages and presents data on minimum wage rates in collective agreements related to 10 low-paid jobs for countries without statutory minimum wages.

    Formats

    Cite this publication: 

    Eurofound (2020), Minimum wages in 2020: Annual review, Minimum wages in the EU series, Publications Office of the European Union, Luxembourg.

  • Executive summary

    Number of pages: 
    6
    Reference no.: 
    EF20005EN1
    Catalogue info

    Minimum wages in 2020: Annual review

    Author(s): 
    Eurofound

    During the year 2019 many countries were debating a further substantial increase to minimum wages beyond 2020, partially in relation to a relative target, partially in absolute terms. Some governments — such as Poland, Slovakia and Spain — have announced or are considering plans to elevate the statutory minimum wages to 60% of median or average wages. The United Kingdom reached this aim and intends to move beyond. Statutory minimum wages have become fairer as compared to other workers’ wages since the beginning of the millennium (when comparing statutory minimum wages to the median wages of all workers). In most countries, the level of the minimum wage as a proportion of the median wage (the ‘Kaitz index’) has grown between 2000 and 2018.

    Available for download in 1 language

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  • Working papers

    Related working papers

  • Data

    Data

    Find data on statutory minimum wages in the EU.

    List of tables

    • Table 1: Social partners’ first reactions to the announced initiative on fair wages
    • Table 2: Overview of main arguments and proposals concerning an EU minimum wage initiative from social partners
    • Table 3: Gross minimum wages, selected EU Member States and the UK, 2019 and 2020
    • Table 4: Sub-minimum rates for selected EU Member States and the UK as at 1 January 2020
    • Table 5: Further statutory minimum wage rates for private sector workers in selected EU Member States
    • Table 6: Number of collective agreements covering low-paying job categories for countries without statutory minimum wages
    • Table 7: Minimum wages in collective agreements, applicable in 2019 for selected low-paid jobs
    • Table 8: Collective agreement coverage in Finland
    • Table 9: Overview of debates during 2019 on aspects of the minimum wage setting processes
    • Table 10: Demands for and agreements on targets for future minimum wages to address adequacy in selected EU Member States and the UK
    • Table 11: Regional statutory minimum wage rates
    • Table 12: Latest minimum wage research in EU Member States and the UK
    • Table 13: Overview of recent empirical research in the EU, Norway and the UK on employment impacts of minimum wage increases, 2019
    • Table 14: Policies influencing in-work poverty
    • Table A1: Network of Eurofound Correspondents – Members participating in the research

    List of figures

    • Figure 1: Conceptualising adequate minimum wages
    • Figure 2: Estimated share of employees earning 90% to 110% of the minimum wage, EU Member States, 2017
    • Figure 3: Proportions of female and male employees, EU level, 2017
    • Figure 4: Proportion of minimum wage workers per sector, EU level, 2017
    • Figure 5: Proportion of minimum wage workers per occupation (top 10), EU level, 2017
    • Figure 6: Hourly minimum wages, selected EU Member States, 2020
    • Figure 7: Minimum wage developments in real terms, 15 euro area countries, 2015 price levels
    • Figure 8: Minimum wage developments in real terms, non-euro area, 2015 price levels
    • Figure 9: Impact of purchasing power on the minimum wage value for selected EU Member States and the UK, as at 1 January 2020
    • Figure 10: Relative distance between purchasing power of lowest and median minimum wage EU Member States and the UK and highest minimum wage EU Member States and the UK, 2010–2020
    • Figure 11: Process for determining minimum wage rates for 2020
    • Figure 12: Number of minimum wage rate updates, EU Member States with statutory minimum wages and the UK, since 2010
    • Figure 13: Longer-term trend of development of statutory minimum wages relative to median wages of full-time employed workers, selected countries within the EU and the UK, 2000–2018
    • Figure 14: Proportion of minimum wage workers who find it difficult to make ends meet, EU average
    • Figure 15: Proportion of minimum wage workers who find it difficult to make ends meet
    • Figure 16: Making ends meet and minimum wages in relative and absolute terms
    • Figure 17: Monthly minimum wage as a proportion of the mean value of average monthly earnings by NUTS1 region, reference year 2016
    • Figure 18: Regional variation of relative monthly minimum wages, by NUTS1 region, 2016
    • Figure 19: Examples of countries with higher interregional differences in the proportion of minimum wage workers

     

Research carried out prior to the UK’s withdrawal from the European Union on 31 January 2020, and published subsequently, may include data relating to the 28 EU Member States. Following this date, research only takes into account the 27 EU Member States (EU28 minus the UK), unless specified otherwise.

This report presents the results of research conducted prior to the outbreak of COVID-19 in Europe in February 2020. For this reason, the results do not take account of the outbreak.

Part of the series

  • Minimum wages in the EU

    This series reports on developments in minimum wage rates across the EU, including how they are set and how they have developed over time in nominal and real terms. The series explores where there are statutory minimum wages or collectively agreed minimum wages in the Member States, as well as minimum wage coverage rates by gender.  

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