Social Protection Through Adequate Minimum Wage in the States of the European Union

Abstract

The need to improve living and working conditions in the European Union, but also the idea of ensuring economic and social progress within it, required that the minimum income of each worker could be determined transparently and predictably by each member state, in accordance with social reality and in accordance with national legislation. Directive 2.041/2022 on the adequate minimum wage in the EU, states that from the moment of its entry into force (October 2022), member states have two years to transpose the provisions into domestic legislation. Not all EU countries will have the same adequate minimum income. Each state will establish its level according to social and economic conditions, purchasing power, productivity level and the evolution of macroeconomic indicators at the national level, but having as a guide precisely the provisions of the European directive and the principles it includes. Thus, countries that already have a minimum wage per economy are committed to changing its level according to a formula that ensures a decent living, is consistent with the inflation rate and can cover the minimum shopping basket for various necessary goods and services. Member States are recommended to update their minimum wages at least every two years, and in countries using an automatic indexation mechanism, at least every four years. In order to correctly calculate this income, the directive recommends that member states take as a starting point the value of the consumption basket (as provided by national statistical reports), or set this income at 60% of the median salary or at 50% of the salary gross average per economy. For example, a consumption basket for a decent living can be composed of costs for: food, clothing and footwear, housing insurance, furnishing and maintenance, household products and personal hygiene, services, education and culture, health care, recreation and vacation, savings fund. Romania (with just over 600 euros) ranks among the last EU countries, in 20th place out of 22, just ahead of Hungary and Bulgaria, on a scale of this indicator between 2,387 euros in Luxembourg and 399 euros in Bulgaria. The EU directive will generate greater transparency, certainty, stability and predictability on the labor market, and in times of crisis it will become an anchor for vulnerable citizens from EU countries, implicitly also for those from Romania.

Received: 05 May 2022 / Accepted: 15 May 2023 / Published: 20 May 2023