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Nordic countries disagree with EU on minimum wage

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Christian Fernsby ▼ | January 13, 2020
Nordic countries are struggling with plans to introduce an EU minimum wage, fearing that the measure will undermine their collective bargaining models.
Peter Hummelgaard
Wages in Europe   Danish Employment Minister Peter Hummelgaard
European Commission to take first step towards common framework for setting minimum wages in EU member states on Tuesday as part of new president Ursula von der Leyen pledge to stem “brain drain” from east to west.

Topics: Nordic wage

But with the support of the main unions, politicians in countries where negotiations between employers and workers set wage rates should question the proposals.

They argue that Brussels’s intervention could ultimately lead to lower wages for their staff.

Danish Employment Minister Peter Hummelgaard told The Guardian that he supports higher wages for the lowest paid in Europe, but “the means to achieve this must respect national traditions and working models well”.

He said: “In Denmark, wages are negotiated only by unions and employers’ organizations this has been the case for over 100 years.”

Of the 28 Member States, only Denmark, Italy, Cyprus, Austria, Finland and Sweden do not have a statutory minimum wage.

But workers in the Nordic countries enjoy a relatively high average wage, with Danish employers paying labor costs of € 43.50 (£ 37) per hour per worker in 2018 the highest in the EU.

Danes, even with the lowest wages, can expect to be paid around £ 15 an hour. Swedish and Finnish workers are also well paid according to their collective bargaining models.

Non-unionized employees are often covered by collective agreements in the Nordic countries. It is feared that a statutory minimum wage could lead employers to challenge such agreements on the grounds that a reasonable wage threshold is included in the statutes and that it does not need to be improved.

The commission will launch its consultation this week, but the Danish government is seeking written guarantees that its collective bargaining system will be exempt from any new directives. The Finnish and Swedish ministers expressed similar concerns.