Minimun wage in European countries

The statutory minimun wage in Danmark, Germany, France, UK and Italy.

In regard to the minimum wage rate that fix, by low, the minimum level of wages, there are major differences among European countries, concerning the determination of the level, the application, the role of social partners. It is worth to remember that “Minimum wage” must not be confused with the so-called basic income or revenue of citizenship.
The first applies to salaries and wages of occupied workers, the second to all citizens.

Here are five example of minimum wage system in five European countries.


In Denmark, there is no national statutory minimum wage rate. Minimum wages are set in sectorial collective greements between the employers’association DA (Dansk Arbejdsgiverforening) and the confederation of trade union workers LO (Landsorganisationen). There are no formal extension procedures for private-sector agreements (Lismoen, 2006). The collective bargaining coverage in Denmark is relatively high (around 80 per cent), but significantly less universal than in other countries with collectively bargained minima, such as Austria, Belgium and Finland. Collective agreements are not
extended in Denmark .


In the recent accord between the SPD and CDU, mired to form a  “great coalition government”,  a minimum wage system has been agreed.. It is a big change.Till today Germany has been characterized by the absence of a national statutory minimum wage andrelatively weak collective bargaining coverage: only workers in companies are effectively protected by collective agreements (tarifgebundene Unternehmen).  The state can, however, intervene in several ways in minimum wage setting: Article 5 of the Collective Agreement Act (Tarifvertragsgesetz) makes it possible to extend collectively agreed minima to all workers; and  the Posted Workers Act (Arbeitnehmerentsendegesetz) makes it possible to extend collective agreements that cover more than 50 per cent of employees in a sector - a method that has been applied in cleaning, construction, laundries, electrical work, care services, mining and postal services.

On the other side, if the collective agreements cover less than 50 per cent of workers in a sector, the Act relating to minimum working conditions (Mindestarbeitsbedingungengesetz) lets introducing minimum wages through an agreement in a tripartite commission.

Despite these mechanisms, only 640 of the 64,300 agreements registered in2008 have been extended (Eurofound, 2011: 2). Collective bargaining coverage continues to weaken and has called the German model of protection against
low pay into question: between 1998 and 2010, collective bargaining coverage declined from 73 to 63 per cent in western Germany and from 63 to 50 per cent in eastern Germany. The coverage at sectoral level is even lower, so that more than half of all German workers are not covered by national or sectoral minima.


France has had a national statutory minimum wage since the 1950s. The SMIC (Salaire minimum interprofessionnel de croissance) is set by legislation and covers all workers except those in the public sector, apprentices, young workers
and persons with certain disabilities, for whom different rates apply.

There aretwo ways in which the national minimum wage rate (SMIC) may be adjusted. First, the SMIC is indexed to the consumer price index (CPI): when it increases by at least 2 per cent, the SMIC is increased by the same percentage.
Second, and independent of the first method, the government sets a new SMIC by decree on First July each year, following the  assessment and related report of the National Committee on Collective Agreements. This Committee is made up of four government representatives and an equal number of persons from the most representative workers’ and employers’ organizations.

Despite low union density, collectively agreed wages defined in sectoral agreements (Conventions collectives de travail) apply to almost all workers due to the fact that all agreements are extended by the government. However, the specific minimum wages agreed through collective bargaining are in many cases irrelevant since they are often lower than the SMIC (Gautié, 2010; Eldring and Alsos, 2012: 50).

United Kingdom

The United Kingdom has had a national statutory minimum wage since 1997. The Secretary of State determines the national minimum wage following the Low Pay Commission’s recommendation. This Commission comprises an
independent chair and nine members (three employers, three employees and three independents).
Before making a recommendation, the Low Pay Commission must consult employers’ representatives, workers’ representatives and any other body or person they think fit. There are lower rates for young workers and apprentices. Collective bargaining agreements at the sectoral level hardly exist and no legal extension mechanism is available. The collective bargaining coverage of 34 per cent mainly stems from firm-level agreements.


There is no national statutory minimum wage rate in Italy. Minimum wage rates are set in binding sectorial collective agreements that generally are valid only for the companies and employees affiliated to the associations that sign the collective agreement.
That said, courts usually refer to collectively agreed minimum pay rates in order to assess the appropriateness of actual wages in individual disputes, according to Article 36 of the Constitution, that states that “The worker is entitled to a wage commensurate with the quantity and quality of his work and under all circumstances sufficient to ensure him and his family a free and decorous existence”. As a result, even workers who are not covered should receive wages at least equal to the minimum rates determined in collective agreements. So, collective bargaining coverage in Italy is high compared to the country’s union density.
Recently, a debate has been open in order the setting a statutory minimum wage, considering that, due to the extension of the multiple precarious forms of employment, a growing number of workers  lacks the coverage of the collective agreements.

(For a large documentation on the subject::

Toni Ferigo

Former Secretary of International metalworkers Federation;currently collaborator with "Istituto Paralleli", Turin (Italy)