The European directive on adequate minimum wages must be transposed into national law by next November. Some have criticised it for not being binding enough. Do you share this opinion?

: It’s a compromise, there’s always room for improvement. But it’s a big step forward. We now have a concrete example of a directive, and it is binding in the sense that all countries must transpose it. It provides guidelines for countries with a minimum wage, such as Luxembourg, and that’s a good thing, because it helps us in our demands.

Do you think there will be any real changes? Companies often point to the successive indexations that are pushing up the social minimum wage (SSM).

There are several aspects that can play a role. For example, the government has made child poverty a theme, and we all know that it is the result of parental poverty. Another statistic that gives Luxembourg a very bad image is the rate of working poor [13.5% in 2021, editor’s note], and if we take that seriously, we can’t not increase the minimum wage.

In the directive, several avenues are envisaged for establishing adequate minimum wages (Kaitz index, ratio between net minimum wage and net average wage, poverty threshold or reference budget). Which one is favoured by the Chamber of Employees?

We’ve never yet come out in favour of one criterion or another, but for me it’s the reference budget that clearly shows how much money you need to lead a decent life.

Have you already made an estimate of what the SSM would become?

To reach the reference budget, take-home pay would have to rise by 22%, so we’d have to make a major effort, but these are targets that we have to try to reach in the long term.

Do you fear that nothing will really change once the directive has been transposed, given that Luxembourg already has an SSM?

We can fear that, but we hope not, because in the statistics, it doesn’t look good. Even before the directive existed, we had criticised the fact that the minimum wage was too low. It’s certainly high in absolute terms compared with other countries, but you have to put it into economic context. You have to be able to live decently on your salary, without social transfers. So we need to take this directive seriously.

The directive also sets 80% of employees as the desirable rate of coverage of collective agreements within the member states…

In Luxembourg, in general, 59% of employees are covered. If you take out the public sector, you’re down to 53%, so we’re a long way from 80%. In some sectors, such as hotels and catering or commerce, we’re even at 20%, and it’s in these sectors that many employees earn the SSM. It’s up to the government to get things right; we’re not going to get to 80% just like that.

Is there a certain reluctance on the part of employers?

Yes, unfortunately. But we need to strengthen the law so that we have more sectoral agreements negotiated by the unions, because otherwise, within a company, there is always a balance of power between the boss and the staff delegation. And that eliminates unfair wage competition between companies. It’s up to the government to get things done, we're not going to get to 80% just like that.

This article was first published in French on . It has been translated and edited for Delano.

This article was written for the  edition of Paperjam magazine, published on 19 June. The magazine content is produced exclusively for the magazine. It is published on the website as a contribution to the full Paperjam archive. .

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