Progress towards sustainable development: the minimum wage outlook in Europe for 2024

Inna Arzhynt and Ada Paierele
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Inna Arzhynt: Bucharest University of Economic Studies, Romania
Ada Paierele: Bucharest University of Economic Studies, Romania

Theoretical and Applied Economics, 2024, vol. XXXI, issue Special, Summer, 119-126

Abstract: The long process of global economic development, focused exclusively on profit maximization and cost diminuation, has serious consequences on the natural, social and even spiritual environment. Environmental issues, global climate change, and social and gender inequality are just a few of the systemic crises and challenges that countries, corporations, and individuals have faced in the late 20th and early 21st centuries. This conflict led to a reassessment of the global vision and a recognition of the importance of sustainable development. Recently, the European Union adopted a new directive designed to help establish an adequate minimum wage in the 27 member states. However, the minimum wage amounts and conditions will not be uniform. Despite efforts, the real minimum wage has fallen in most EU member states, with inflation peaking in 2022. The Organization for Economic Cooperation and Development (OECD) recommends a periodic review of the wage to protect low-income workers. The EU Directive aims to establish a framework for ensuring an adequate level of the legal minimum wage, promote collective bargaining to set wages and expand workers access to exercise their rights to receive the minimum wage. In terms of determining an appropriate minimum wage, this process is not without its challenges. The EU directive gives member states the option to use international or national reference points to set the minimum wage. The ratio of the minimum wage to the median wage remains an important indicator that reflects the situation of workers receiving the minimum wage. According to OECD data, in 2022, the minimum wage represented less than 50% of the median wage in 10 EU countries. This paper is dedicated to identifying and finding solutions to solve the mentioned problems.

Keywords: Minimum Wage; Sustainable; Progress; Development. (search for similar items in EconPapers)
Date: 2024
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