Extended Summary

When the historical development process is examined, legal minimum wages have
developed in a complementary way to collective bargaining. Minimum wages were
generally recommended in sectors where effective negotiations can not be made
and/or the wage level is very low. While it was initially a policy tool used selectively
in a few low-wage sectors, today it has a much broader scope. Truly, according to
the International Labor Organization, more than 90 percent of all countries today
have some form of minimum wage regulation that protects workers.
The concept of minimum wage, which expresses the minimum amount that
workers can earn in exchange for work, is a multifaceted concept. The minimum
wage amount is determined by economic, social and political etc. factors. While
some economists draw attention to the demand-creating aspect of the minimum
wage, others focus on minimum wage as a cost factor. Because, on the one hand,
wages affect the total demand as it is the worker’s income, and on the other hand,
they represent a production cost feature that determines the competitive advantage
among companies. Especially in times of economic crisis, the capitalist system
strives to create demand for produced goods and services. At this point, the
minimum wage is important to create an effective demand for produced goods and
services. For this reason, minimum wage policies come into prominence in a
capitalist economy, especially during crisis periods.
Today, the minimum wage has become a universally accepted policy tool in
regulating the labor market almost all over the world. While previously legal
minimum wages were used selectively in a complementary way to collective
bargaining and in sectors where effective negotiations could not be made and/or
the wage level was very low, they have now become a national policy tool with a
much broader scope. As a matter of fact, in most European countries with
prominent social qualities, minimum wage is among the established tools of labor
market regulations. However, although the European Union (EU) has determined
common policies on many issues in order to ensure unity among member
countries, it has not made a common regulation regarding wages and especially the
minimum wage for a long time. Therefore, from the beginning, the EU has left the
minimum wage issue to the jurisdiction of the member states.
Following the 2008-2009 financial crisis, the Covid 19 pandemic and the
subsequent political instability in the countries neighboring the EU have negatively
affected the EU economy as a whole. Problems arising in the production of goods
and services have caused prices to rise rapidly. In this period when prices rose
rapidly, nominal wage increases lagged behind the inflation rate and therefore real
wages decreased. Thus, the minimum wage in the EU has become an important
agenda item again since 2020, both to combat working poverty and to achieve an
inclusive growth target. The EU, which was reluctant to determine a common
policy regarding wages for many years due to its neo-liberal economic approaches,
was forced to make a regulation regarding minimum wages in the face of new
socioeconomic conditions and increasing political pressures.
Thus, with the “Directive 2022/2041 on Adequate Minimum Wage in
European Union” an important step was taken towards determining a minimum
wage level necessary for workers in EU countries to live a decent life. The purpose
of the Union in regulating the minimum wage is not to create a single minimum
wage valid for all member countries, or to eliminate differences in wage levels
between countries, or to create a uniform mechanism for determining minimum
wages. Anyway, considering the conditions, socioeconomic development level,
political structure, average wages, labor productivity, unionization rates and
collective bargaining levels of each member country, absolute harmonization of
minimum wages is not a realistic approach. Therefore, the main aim to be achieved
by the Directive is to promote an adequate minimum wage at national level that
will ensure a common standard of living for all workers across Europe. Therefore,
each country has the right to determine minimum wages in accordance with its
own characteristics. In addition, national regulations are not interfered with by
promoting access to the minimum wage protection provided by collective
agreements and by respecting the rights and freedoms of social partners to
conclude agreements. With the directive, two tangible quantitative targets were set
for member countries. Firstly, for the minimum wage a threshold is set at 60% of
the median wage and 50% of the average wage. The other one, is to increase the
number of employees covered by collective bargaining to at least 80% by
promoting union rights in member countries.
Considering these issues the Directive, as set out in the European Pillar of
Social Rights, is an important step forward in achieving the objectives of
strengthening social dialogue and the right to fair wages, ensuring a decent
standard of living and the prevention of working poverty. Therefore, the regulation
marks a significant change from the Union’s previous policies regarding industrial
relations and wage determination and is considered a turning point.
In the time since the directive was adopted, member countries have quickly
begun to implement relevant regulations and take concrete steps. There are still
many steps to be taken in all member countries to achieve the overall objectives of
the Directive. However, since the first reports on adequate minimum wages by
member countries will be submitted to the Commission by 1 October 2025, it will
be possible to make a correct assessment about the effects and consequences of
the Directive for countries and the Union only after this date.
In this study, the historical background of the minimum wage in the EU is
mentioned and its importance is emphasized in the context of the Directive in
question. In addition, by examining the developments regarding minimum wage in
EU countries in the light of current data, the socio-economic structure that caused
the Directive to come to the agenda was emphasized. In the last section, the legal
basis, legalization process, objectives and content of the Directive on adequate
minimum wage in the EU are discussed and evaluated in detail. In addition, the
directive and the regulations made by the member countries are briefly mentioned
and the importance of their possible effects is emphasized