We are deeply worried and concerned that the European Commission, after its second-stage consultation with the social partners, is planning to proceed with a legislative initiative on minimum wages—a proposal, which will not respect treaty limitations and be counterproductive for a social Europe built on robust, multi-employer collective bargaining.
As the Scandinavian trade union movement, on the fourth of September we sent our own reply to the commission.
The European Union treaties protect national wage-setting, along with freedom of association and the right to strike, from EU legislation.
Protect national wage-setting
While there is a need for social cohesion and improved working conditions in Europe, article 153.5 of the Treaty on the Functioning of the European Union clearly states that every member state is responsible for its own wage-setting system.
This is a logical and necessary safeguard, since labour-market systems vary widely. Accepting that the EU has the power to legislate on wages would put us on a dangerous path.
Not only would this give the EU tools to increase or decrease wage levels. It could also mean that other areas crucial to the functioning of labour markets, such as the right of association and the right to strike, could become subject to EU regulation.
Article 153.5 is and has been important for all countries with collective, self-regulatory labour-market systems and is a precondition of our countries’ membership in, or affiliation with, the EU. Ever since it was promulgated, these exemptions have constituted a crucial protection for Nordic collective-agreement models.
We need to protect the autonomy of the social partners, which are primarily responsible for the functioning of our labour markets. Neither our national governments and parliaments nor the EU institutions should interfere in wage-setting.
The commission has promised to protect the Nordic model—a promise which sounds good but which is impossible to keep in relation to the introduction of EU legislation on wages. A directive, once adopted, is applicable to all member states. Thorough legal analyses show that there are and would not be any waterproof exceptions for one or several countries or labour-market systems.
We fear that an EU directive would interfere with the social partners’ wage-setting and lead to a broader intrusion into the autonomy of trade unions and employers. In our countries, a directive would have direct and negative effects on collective bargaining and wage-setting, and ultimately on actual wage levels.
We do acknowledge the need for higher wages and better-functioning labour markets. But what Europe needs is more collective bargaining and stronger social partners, not a straitjacket on social dialogue and wage-setting, which would not only be detrimental to Scandinavian labour markets but also risk harming social dialogue in other member states.
Those arguing in favour of minimum-wage legislation often refer to this as a way to increase the legitimacy of the EU in the eyes of citizens. But in many member states the contrary is the case: interfering in well-functioning labour markets would lead to a loss of legitimacy and less support for the EU.