This past fall, the European Union passed a “watershed initiative” to raise minimum wages and strengthen collective bargaining. There are numerous complexities to the new EU directive, but for pro-worker Americans the key point to understand is that the “historic” new law aims to improve working conditions by increasing minimum wages and dramatically increasing collective bargaining coverage. Critically, the policy aims to cover almost all workers with collective bargaining agreements — making it part of a growing trend of countries around the world seeking to promote sectoral bargaining.
The new directive requires EU member countries to have a process for setting their minimum wage at a sufficiently high level to provide a “decent standard of living” — which the EU suggests is at least 60 percent of the median wage and 50 percent of the average wage. The new EU law also encourages collective bargaining by requiring countries to create action plans if bargaining coverage is below 80 percent.
The above excerpt was originally published in OnLabor.
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