Statutory minimum wage rates throughout Europe are rising by an average of 9.2 per cent – more than 50 per cent above cost of living increases in some countries, according to the Federation of European Employers (FedEE).
Twelve of the 26 countries that operate legal minimum rates revised them on 1 January.
In all of these countries, with the exception of Turkey, the changes were at or significantly higher than the level of annual price inflation.
In the Czech Republic, for example, minimum rates rose by 7.2 per cent against an annual inflation rate of 2.6 per cent, the FedEE said.
But Robin Chater, secretary-general of the FedEE, said statutory minimium wage rates appeared to have a stabilising affect on pay levels in countries where they are in force.
“The problem for some states, such as Portugal and many poorer eastern European states, is that minimum rates remain well below the level of subsistence and do not provide a realistic starting point for company pay scales,” he said.
The rate at which the National Minimum Wage is paid is expected to increase in the UK in October this year. It presently stands at £4.85 an hour.
The Low Pay Commission is to prepare a report for the government on the National Minimum Wage by the end of February, in which it will make any appropriate recommendations for changes to the rates.
The level of the pay safety net remains controversial in most European states:
- Minimum rates have been frozen by the Dutch government since 2003 as part of its austerity programme
- In France, the introduction of the 35-hour week led to widely differing rates that have only just been standardised
- In Spain the socialist government of Jose Zapatero relented last week to trade union pressure and agreed to index-link minimum wage rates
- In Bulgaria, the government’s desire to raise the minimum wage by 25 per cent later this month has been strongly opposed by the International Monetary Fund
- The Russian parliament has approved a series of increases in minimum rates that will give rise to an 83 per cent increase between December 2004 and May 2006.
The rate at which the National Minimum Wage is paid in the UK is expected to increase in October this year. It presently stands at £4.85 an hour.
The Low Pay Commission is to prepare a report for the government by the end of February which may recommend changes to the rates.
For further information on minimum rates in each country go to www.fedee.com/minwage.html