“The transposition of the directive will not result in an adjustment of the current level of the Luxembourg social minimum wage, nor will it call into question the mechanism for its periodic adjustment, because the primary purpose of the directive is to establish minimum requirements at European Union level, to define procedural obligations for the adequacy of statutory minimum wages and to improve employees’ effective access to the protection offered by minimum wages, in the form of a statutory minimum wage where it exists, or in the form provided for in collective labour agreements.”
In one sentence, labour minister (CSV) aligned himself with prime minister (CSV), which comes as no surprise: in his response to a question from (déi Lenk), Mischo even confirmed the government’s take that “the draft bill perfectly reflects the spirit of the directive.”
According to the minister, the draft law should be adopted this week, during the weekly Government Council meeting. It will be “voted on as soon as possible.”
“Generally speaking, it should be noted that the Luxembourg social minimum wage largely meets the criteria of Article 5 of the directive,” the minister added. “The fact that the Luxembourg government is obliged to submit a report to the Chamber of Deputies every two years on the evolution of general economic conditions and incomes, and to propose, if necessary, an increase in the level of the social minimum wage, leads to a constant re-evaluation and updating of the level of the social minimum wage.”
Affordable housing is the key
On 1 January 2024, the social minimum wage (SSM) for “unskilled” professions was €2,571 per month while for “skilled” professions it was €3,085. One in seven employees, excluding civil servants, is paid close to the level of the social minimum wage. That’s 65,775 people, according to a study by the Chamber of Employees (CSL) published at the end of last year. In the retail and hospitality sectors, more than one in two full-time employees is paid close to the SSM. At the beginning of the year, the CSL published another study, which showed that employees paid at this level were more likely to be foreign non-residents (47.6%) and foreign residents (28.5%). Particularly well-represented were Portuguese women (26.3% at SSM level).
“In addition, the adjustment of wages in Luxembourg to the consumer price index, including of course minimum social wages, ensures that the purchasing power of employees in Luxembourg is maintained,” said the minister. “There is no need to refer to other indicative reference values commonly used at international level, which the directive suggests only by way of example.”
On a more political note, Mischo added that “a substantial increase in the social minimum wage alone, beyond the biannual adjustment provided for by law, is not enough to reduce the absolute poverty rate,” and that other factors such as the shortage of affordable housing--which is a particular focus of the coalition--must be taken into account.
This article in French.