TAE Clearly Opposes the Minimum Wage Initiative by the EU

Under the guise of wanting to ensure socially fair wages in the member states, the President of the EU Commission, von der Leyen, is seeking the EU-wide implementation of “adequate minimum wages”.  

Even if at first glance the goal seems enticing, at its core it is only an unnecessary demand by the EU, because 21 of the EU 27 already have a minimum wage regulated by law.

To make it very clear: Of course, the European taxpayers’ association, TAE, is for fairness in the labour market, which includes the equality of women and men, a prohibition of discrimination, wage transparency, access to education and offers of additional training. We therefore welcome measures by the EU which lead to more growth and more employment (it only works in this order), and therefore to more prosperity for the people in Europe.   

But: Growth cannot be dictated by law! In order to have long-term success, one must be able to generate wage increases on the market. Already today, wages are nationally set by collective bargaining and agreements between employees and employers. In times of vacant positions, and thus high labour demand, workers have a good bargaining position: So far, good workers are still a scarce commodity in most countries.   

It is to be strongly doubted if such interferences in the labour market like setting uniform minimum wages in Europe are appropriate. 

Also, it is the very own responsibility of the individual countries to ensure an adequate wage level, which also includes the introduction of national minimum wage.

The planned interference by the EU constitutes an intrusion into the autonomy of the member states. National decision-making powers are to be forcefully moved to Brussels. This abrogates the principle of subsidiarity and leads to a loss of location advantage by countries with low wage levels.

For us, there is an important point missing from the concept of the EU: It is lacking the motivation to promote the venture and chance of entrepreneurship to people. We need more founder’s mentality, the courage and joy to establish a business, and to not just primarily seek out the path of employment.

Downlaod TAE Working Paper on EU Minimum Wages (April 2021)

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