TAE categorically rejects the EU’s minimum wage initiative.

Under the pretext of seeking to guarantee socially just wages in the Member States, the President of the European Commission, von der Leyen, is aiming to introduce ‘adequate minimum wages’ across the EU.  

Although the aim may seem appealing at first glance, at its core it is simply an unnecessary demand by the EU, as 21 of the 27 EU Member States already have a statutory minimum wage.

To put it quite clearly: the European Taxpayers’ Association (TAE) is, of course, committed to fairness in the labour market, which includes gender equality, a ban on discrimination, wage transparency, and access to education and further training opportunities. We therefore welcome EU measures that lead to greater growth and higher employment (it only works in that order) and thus to greater prosperity for the people of Europe.   

However: growth cannot be dictated by law! To be successful in the long term, wage increases must be achieved through the market. Even today, wages are set at national level through collective bargaining and agreements between employees and employers. Where there are job vacancies and consequently high demand for labour, employees are in a strong negotiating position: skilled workers remain in short supply in most countries.   

It is highly doubtful whether interventions of this kind in the labour market, such as the setting of uniform minimum wages across Europe, are appropriate. 

Furthermore, it is the responsibility of individual countries to ensure an appropriate wage level, which includes the introduction of a national minimum wage.

The EU’s planned interference constitutes an encroachment on the autonomy of Member States. National decision-making powers are to be forcibly transferred to Brussels. This undermines the principle of subsidiarity and leads to a loss of competitive advantage for countries with low wage levels.

In our view, the EU’s approach is missing a key element: it lacks incentives to promote entrepreneurial activity and to give people the opportunity to do so. We need more of an entrepreneurial mindset – the courage and enthusiasm to start a business, rather than primarily seeking employment.

Download the TAE working paper on EU minimum wages (April 2021)