The adoption of a National Minimum Wage (NMW) has been institutionalised in several European countries over the last decades and is now seen as an important social measure in the European Union to protect low-paid workers. In some countries the EWC was introduced several years ago, such as in the Netherlands in 1969, while in others it was introduced very recently, such as in Germany in 2015. Currently, 21 EU Member States have a statutory minimum wage, while in the remaining six Member States (including Cyprus) similar arrangements exist through collective agreements and other regulations. Therefore, in one way or another, the institution of the minimum wage is used as a social measure to protect low-paid workers. Of course, the level of minimum wage as well as the related provisions of the system vary from country to country.
In Cyprus, since 2018, the government has been consulting with the social partners on the adoption of the ESM institution. In general, there seems to be a consensus among the political forces to promote the adoption of the ESM within 2022.
The main objective of adopting the ESM should be to ensure decent living conditions for workers (by protecting them from low wages), without compromising the competitiveness of the economy and without adversely affecting the level of employment or creating other distortions whose negative effects outweigh the benefits of adopting the ESM.
The Cyprus Economy and Competitiveness Council (CECC), starting from the objectives of adopting the CySM in Cyprus and recognizing the various parameters and specificities that should be taken into account in order to minimize the potential negative effects of the implementation of the CySM, has submitted a proposal with recommendations concerning the design and adoption of the CySM:
- adopting an economy-wide single-tier minimum wage system,
- exceptions to a single-tier system and other arrangements that are kept to a minimum,
- choosing the most appropriate period to start the ESM institution - careful implementation in the current period of ongoing health crisis,
- setting the initial level (amount) of the ESM at a relatively low starting level based on clear criteria,
- a mechanism to adjust the level of the ESM at regular intervals to maintain its effectiveness on the basis of independent expert evidence and taking into account the arguments of the social partners, not on the basis of the balance of bargaining power or political/other interests,
- in parallel, other combined measures to support the basic objective of the ESM to ensure decent living conditions for workers.
The above recommendations are detailed in the EPA proposal which can be found here. The full text of the proposal is also available on the Council's website.
(EC/SH)
Contents of this article including associated images are owned by PIO
Views & opinions expressed are those of the author and/or PIO
Source
