Guaranteeing a decent living for European workers: An interview with Renew MEP Monica Semedo

Although the quality of life has improved in Europe over the past decades, wage inequality has increased. The Covid-19 crisis has worsened this situation, and poverty is now a significant concern for the European Commission. Granting minimal wages might be a solution for social inclusion, but is this even possible at the European level? The Member of the European Parliament Monica Semedo answers this question by explaining a new project for a Directive on adequate minimum wages.

Growing socio-economic vulnerability in Europe

Despite a general rise in wages, the socio-economic conditions of low-wage workers have worsened. According to Eurostat, “the proportion of employed persons at risk of poverty went from 8.3 % in 2010 to 9.3 % in 2018,” diminishing their purchasing power. Purchasing power is a key economic indicator that compares national economies because it comprehends the different living costs. The cost of living determines the amount of money needed to cover basic expenses. It is helpful to compare the price of everyday life in different cities, regions or countries. The European context reveals a cleavage between western and eastern European citizens, the former having a lower purchasing power than the latter. Moreover, the Covid-19 crisis had a negative impact on wages, the most vulnerable workers being the youngsters and the least skilled.

To tackle this socio-economic issue at the European level, adopting minimum wages in each European country could be helpful. However, the economic benefits of implementing such a measure are still unclear. Since it would most certainly contribute to an increase in labour costs, some economists argue that it might also lead to job losses and thus would end up being counterproductive to tackle economic vulnerability. Nevertheless, other experts explain that a legal minimum wage could increase workers’ purchasing power and create jobs. Hence, this measure would protect low-wage workers and enhance social inclusion by ensuring fair wages and fighting against in-work poverty. Following this reasoning, twenty-one European states have already fixed legal minimum wages. The remaining six (Austria, Cyprus, Denmark, Finland, Italy and Sweden) currently establish the salaries through collective bargaining between social partners.

But beyond national strategies, could a shared European solution be found to address this issue?

A feasible European response?

When announcing her political guidelines in July 2019, Commission’s President Von Der Leyen stated that “the dignity of work is sacred”. She mentioned a legal tool granting each European worker a fair wage and ensuring a decent standard of living. The European Commission should offer concrete solutions to embed this saying legally, but this is not an easy task.

Indeed, the Union has very few competencies in the social field, which remain mainly under the member states’ sovereign competence. The EU essentially adopted soft law measures in anti-poverty policies by helping to coordinate national practices, compare and promote the best ones among the member states. According to a 2021 study requested by the European Parliament’s committee on Employment and Social Affairs: “the front of actors that might favour the establishment of the adoption of a binding supranational minimum income framework at the EU level is not strong enough.” Hence, the Commission’s mandate regarding social inclusion is hard to achieve.

However, a Commission initiative is currently being analyzed by the European Parliament and might become a European Directive in the near future.

The Directive project: a step further

The French delegation of the political group Renew initiated the negotiations in the European Parliament about the Directive on adequate minimum wages in the EU. The project aims at establishing common criteria for each European government when setting wages levels, thus fixing a minimum level of social protection for workers. Its final objective is to reduce social dumping and fight against poverty and delocalisation. However, the Directive does not aim to set a unique European minimum wage since the EU does not have the legal capacity to do so. Also, an even minimum wage in Europe would not correspond to the different national purchasing power and could even be counterproductive to tackling socio-economic vulnerability. According to a 2020 briefing of the European Parliamentary Research Service, “expressed in euros, monthly minimum wages vary widely across the EU, ranging from 312 Euros in Bulgaria to 2’142 Euros in Luxembourg”.

To better understand this directive, Eyes on Europe has interviewed the Member of the European Parliament (MEP) Monica Semedo. Ms Semedo is an MEP from the political group Renew and shadow rapporteur of this Directive project. According to the Parliament’s rules, her group sends her to negotiate political compromises on its behalf. She agreed to answer some questions for Eyes on Europe explaining the novelty of this new social directive.

Eyes on Europe (EOE): The project does not aim to fix the same minimum wages for all Europeans because the national living costs are very different. Thus, what can the European institutions do to tackle poverty in Europe with this new legislative project?

MEP Semedo: Indeed, we can not set the same minimum wages for every member state because the costs of living between, for instance, Luxembourg and Bulgaria are too different. Moreover, it is not in the remit of competence of the EU. But what we can do to tackle in-work poverty is to set a framework of criteria through the directive to guarantee decent living conditions. A country like Sweden has a statutory minimum wage, but everything is based on collective bargaining and is quite well-covered so that almost every worker is protected. But other countries do not have those options, and we have to guarantee that workers can live off their salaries. In the directive, we have both systems, with criteria to assess the adequacy of a statutory minimum wage and enhance collective bargaining coverage by attaining a particular objective of percentages so that people are socially better covered and protected.

EOE: Since the European Union has very few competencies to legislate on social issues, can we expect a binding text for national governments?

MEP Semedo: We are working on a directive, meaning the criteria framework will be legally binding, but the text will still leave enough flexibility of implementation to the member states. For example, in Luxembourg, we have the statutory minimum wage, which is enshrined in the law, and collective bargaining covering specific sectors. Among EU countries, some either have one or the other. We want to guarantee that each worker can live off that wage while contributing to society with the directive. Across Europe, the minimum wages might be set by statutory minimum wage or collective bargaining, depending on the history of each member state. The directive imposes nothing, but the member states should first fix and then update the minimum wages to guarantee decent living conditions in the long term. The directive sets an objective for them.

EOE: What arguments can be used to convince the reluctant member states to accept the proposal?

MEP Semedo: It depends on which delegation you speak to. In my group, we had some delegations that were skeptical on specific points or topics of the directive. I listened to them and saw how I could convince them. First, it is essential to explain in detail what the project is about and that the directive will respect the national traditions; nothing will be imposed as such. The aim is just to guarantee a certain quality of living through work.

EOE: As shadow rapporteur of the project, what role do you play in the negotiations with the other Members of the European Parliament? Furthermore, how does your membership in the Renew group influence your position?

MEP Semedo: My role is to talk to my MEP colleagues and other delegations of Renew to acknowledge their priorities in preparation for the plenary vote. Indeed, I am the representative of Renew, and this is a compromise already because I am not embodying my personal opinion. Even if I can add it, I have to focus on what my group thinks and wants; I have to express its concerns and negotiate with the other groups. The next step is to take the position of Renew into the shadows meetings – them being the two co-rapporteurs Dennis Radtke (European People’s Party) and Agnes Jongerius (Socialists & Democrats) – to negotiate with the other groups and then find a compromise. Then, I had to present the agreement to my group, and on this occasion, the package I managed to negotiate got the support of the Renew’s majority. We introduced the proposal to the plenary session with all the groups, and it got a high majority and support.

EOE: Currently, at which point is the dossier in the decision-making process and what are the next steps?

MEP Semedo: We are now in the middle of interinstitutional negotiations with the Council, led by the French Presidency, and Commissioner Schmidt, who is in charge of jobs and social rights. The exchanges between the three institutions are called trilogues, and the negotiations are led by the co-rapporteurs. It is like a dance of the three groups, and we are now coming closer to an agreement. Since we have passed the first phase, we will start the complex negotiations for the second phase. Before these meetings with the two other institutions, groups from the European Parliament have meetings to define their position on specific articles. Hence, they present a strategy to determine what they can or cannot give up. I hope that we will soon start the negotiations for article 5 on adequacy criteria, say what we want and compare with what the others don’t want. I am looking forward to an agreement, but each institution must propose something and negotiate. It is all about compromise, but it is exciting since the European Parliament always wants more. We represent EU citizens, so we usually demand more in social matters. The Council wants less, and the Commission is in between, so we have to work to find a compromise.

EOE: How does the French Presidency of the European Union influence the negotiations between the MEPs?

MEP Semedo: Adequate minimum wages was one of the French priorities during the Presidency, but these priorities have now changed with the war in Ukraine. We have to see how high they put the minimum wage as a prime challenge. However, the Council’s mandate was already established last year. Unfortunately, negotiations can take many years, but that is not what neither the French Presidency nor we want, in my opinion. I hope that we progress now, and I would like the directive to be voted on very soon, as the French wanted initially, but this is something that cannot be done in three months.

Back to baby steps in European social issues?

Granting decent wages for workers at the European level is already a bold challenge, considering the few competencies of the EU in that field and the differences in national purchasing powers. Moreover, decision-makers face a growing demand for more social security. Hence, the French Presidency of the Council played a significant role in accelerating European integration on social issues. However, the Russian aggression against Ukraine rearranged the French and European priorities. Hence, the conflict has concrete implications for us, whether directly through the rising energy prices or indirectly by neglecting other less urgent but still primary issues.

Special thanks to Ms Semedo for answering my questions!

[This article was first published in the issue 36 of the magazine]