Are you interested in knowing what are the minimum wages in the European Union in 2019? You’ve come to the right place!
As of July 2019, 22 of the 28 member states have minimum wages imposed by law, the exceptions being Austria, Cyprus, Denmark, Finland, Italy and Sweden.
Even though the poorer EU members are slowly but steadily catching up with their richer “colleagues”, at the beginning of 2019 the wage differences are still very large. At the top we have Luxembourg with a minimum gross monthly wage of €2071, while at the bottom there’s Bulgaria with a mere €286, 7.2 times lower.
Considering the graph above, we can easily group the countries into several categories:
- High minimum wage (with values over €1400).
This category includes Belgium, France, Germany, Ireland, Luxembourg, Netherlands and the UK. Considering the huge minimum wage gap to the next country, Spain, there are slim chances that the composition of this group could change in the next 5-10 years, unless some countries which currently don’t have a minimum wage adopt one.
- Average minimum wage (€700 – €1100):
Greece, Malta, Portugal, Slovenia and Spain. Almost all of these countries have either stagnated or went through some “bad weather” lately, so it’s unlikely they’ll have consistent wage growths in the years to come. The minimum wage in Greece has actually decreased constantly from almost €900 in 2012 until 2017, when it reached an all time low of €684, but since then it was raised again to a value of €758
- Low minimum wage: (€400 – €650):
Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. The countries in this group had a very different dynamic during the last decade, with speed of convergence with the rich countries varying greatly. While Croatia, Hungary and the Czech Republic have stagnated or had modest growths, Poland, Romania and Slovakia had very positive evolutions lately. Some of the countries in this group are very likely to catch up with the likes of Portugal and Greece during the next 5-10 years.
- Very low minimum wage (lower than €300):
Bulgaria, which seems to be lagging behind the other EU members in terms of wages.
- No minimum wage:
Austria, Cyprus, Denmark, Finland, Italy and Sweden
Evolution compared to 2016
Now, it is important to see how the minimum wages changed compared to the previous year.
While the minimum wage has stagnated in the majority of the old EU member states, all the newer members in Central & Eastern Europe, have raised the minimum wage. So they are converging, even though at different speeds, with their richer union partners.
- all the values are gross
- In Portugal, Spain and Greece each employee receives 14 wages / year. For these countries I used an average monthly value for the entire yearly income, which includes all 14 payments. So, while in Portugal the official monthly minimum wage is €600, I used (€600 x 14)/12 = €700, for Greece: (€650 x 14)/12 = €758 and for Spain: (€900 x 14)/12 = €1050.
The largest increase has been registered in Romania, which during the last 12 months raised the minimum wage by over 89%, in several steps: in June 2016 the minimum wage was raised from 1050 RON to 1250 RON, while at the beginning of 2017 it was raised again to 1450 RON. At the beginning of 2018 another increase occurred to 1900 RON. However, this large increase is artificial, as starting with 2018 Romania included in the gross wage the taxes supported by the employer. So, even though the gain seems to be 450 RON, the real gain is about half that value. In 2019 the minimum gross wage increased again to 2080 RON. So, we can safely say that the minimum wages data for Romania are artificially inflated.
On the other hand, the smallest increase has been registered in the United Kingdom, the equivalent of just €18. But this is probably mostly due to the negative evolution of the British pound compared to the Euro. In pounds, the hourly minimum wage has actually increased from £6.7 to £8.2 in the meantime.
I will try to cover the average and median wages of the EU member states soon. In the meantime, what do you think the near future will bring us in terms of minimum wages?