Social Europe

politics, economy and employment & labour

  • Themes
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

A framework directive on minimum income: towards decent incomes for all

Ane Aranguiz, Herwig Verschueren and Anne Van Lancker 10th November 2020

The European Commission proposal on minimum wages does not exhaust the need to ensure minimum incomes for all.

minimum income
Ane Aranguiz

After copious debate, on October 28th the European Commission finally launched the draft directive on minimum wages. Much has been said about this initiative, including on the conundrum of EU-level competence, the threshold to assess the adequacy of minimum wages and the need to protect the growing mass of precarious workers highlighted by the coronavirus crisis. Less attention has been paid to whether (and how) to combine minimum wages with other social-protection measures, to ensure adequate income protection for all and tackle poverty and social exclusion effectively. 

minimum income
Herwig Verschueren

Research shows that steps towards income regulation in Europe should take a broad scope—including minimum wages, yes, but also increasing the take-home pay of low-wage earners and social-security benefits and providing a minimum-income protection for jobless households. An approach combining these different strands is needed for an effective framework providing coherent and comprehensive social protection, which guarantees that ‘everyone lacking sufficient resources has the right to adequate minimum income benefits ensuring a life in dignity at all stages of life’—as principle 14 of the European Pillar of Social Rights requires.

minimum income
Anne van Lancker

The Covid-19 pandemic has ‘punched a hole’ in already weakened social-protection safety-nets, as recently acknowledged by the Council of the EU, which invited the commission to ‘initiate an update of the Union framework to effectively support and complement the policies of Member States on national minimum income protection’. In an expert study, we presented arguments in favour of a framework directive on minimum income which would complement the commission proposal on minimum wages and the council recommendation on access to social protection by establishing an adequate minimum income in general.

There are compelling reasons—normative, political and functional—for the EU to develop a legally-binding instrument. Among others, a minimum-income directive would contribute to the social cohesion and upward convergence which the commissioner for jobs and social right, Nicholas Schmit, is hoping to achieve with the initiative on minimum wages. It would, moreover, give a boost to the legitimacy of the EU by guaranteeing the citizen’s right to an adequate standard of living.

Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content.


We will never send you spam and you can unsubscribe anytime.

Thank you!

Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription.

.

Legal basis

But that the union has reasons to act does not necessarily mean it can, in terms of its competences. A logical legal basis for an instrument on minimum income would be the EU competences in combating social exclusion under article 153(1)(j) of the Treaty on the Functioning of the European Union. The EU is however limited to actions of co-operation on this basis, precluding a binding instrument. 

Some have argued that article 153(1)(c), on social security and social protection for workers, could serve as the legal basis. But its personal scope, applying only to workers, is too narrow for a minimum-income directive to live up to the right enshrined in principle 14 of the EPSR. 

Instead, a combination of article 153(1)(h), on the integration of those excluded from the labour market, and article 175, on social cohesion, could accommodate a robust instrument spanning the social and the cohesion objectives of the union and covering all persons at all stages of life as proclaimed by the EPSR. Since the objectives of these two provisions are complementary, a legal instrument would seek a single goal—to improve the living standards of the EU population. A dual approach is possible as long as the instrument has a shared objective and the procedures for the use of the two competences are compatible (Titanium dioxide case).

An instrument on these bases would require an ordinary legislative procedure (the Council of the EU and the European Parliament co-legislating) and be adopted by qualified-majority voting, instead of unanimity. This would increase the chances of a directive being agreed, because of the lower threshold and given the parliament has supported minimum-income protection in the past.

‘Core standards’

An instrument on minimum income would also have to comply with the principles of subsidiarity and proportionality. All member states have some sort of minimum-income scheme in place (though most are inadequate) and previous soft-law measures have been insufficient to ensure a minimum income guaranteeing a life of dignity. 


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

A directive in the form of a framework would disavow a ‘one-size-fits-all’ approach and recognise that any initiative on minimum income at the European level would have to be country-specific. The content of the instrument should thus be limited to establishing ‘core standards’ (based on the at-risk-of-poverty threshold and contextualised with reference budgets) for member states, to develop minimum-income schemes which can effectively improve the living standards of the population as well as secure procedural and transparency requirements.

To ensure its feasibility and prospective enforcement, a framework directive on minimum income should include a link to EU funding, which could finance (part of) the costs of implementation, particularly for the ‘poorer’ member states. It could mimic the proposal on minimum wages and include important links to, for example, the European Social Fund Plus or the new Recovery and Resilience Facility. This could reduce the financial costs and potential deadweight effects of a minimum-income scheme with such a broad coverage.

The directive should establish a monitoring system to supervise member states’ performance. Again as with the proposed directive on minimum wages, this could be included in the European Semester. Not only would this minimise the administrative burden for member states, but it would ensure that minimum income and minimum wages were aligned. 

Previous research has shown that low minimum wages act as a glass ceiling for benefits such a minimum income. Equally, there should be a clear positive hierarchy between the level of minimum wages and of minimum income, so integration to the labour market for those who can work is encouraged. As such, it is essential to conceive the efforts towards an EU framework directive on minimum income in relation to the broader picture of decent incomes for all.

Ane Aranguiz, Herwig Verschueren and Anne Van Lancker

Ane Aranguiz is a post-doctoral researcher at the Faculty of Law and the Herman Deleeck Centre for Social Policy at the University of Antwerp. She is working on the Horizon 2020 project EUSOCIALCIT on the future of European social citizenship. Herwig Verschueren is professor of international and European social law at Antwerp. From 1992 to 2004, he was a European Commission official working on the free movement of workers and the co-ordination of social-security schemes. Anne Van Lancker is an independent expert on European social and employment policies, gender equality, human rights and development. She was a member of the European Parliament for 15 years.

Home ・ Economy ・ A framework directive on minimum income: towards decent incomes for all

Most Popular Posts

schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling
world order,Russia,China,Europe,United States,US The coming world orderMarc Saxer
south working,remote work ‘South working’: the future of remote workAntonio Aloisi and Luisa Corazza
Russia,Putin,assets,oligarchs Seizing the assets of Russian oligarchsBranko Milanovic
Russians,support,war,Ukraine Why do Russians support the war against Ukraine?Svetlana Erpyleva

Most Recent Posts

Gazprom,Putin,Nordstream,Putin,Schröder How the public loses out when politicians cash inKatharina Pistor
defence,europe,spending Ukraine and Europe’s defence spendingValerio Alfonso Bruno and Adriano Cozzolino
North Atlantic Treaty Organization,NATO,Ukraine The Ukraine war and NATO’s renewed credibilityPaul Rogers
transnational list,European constituency,European elections,European public sphere A European constituency for a European public sphereDomènec Ruiz Devesa
hydrogen,gas,LNG,REPowerEU EU hydrogen targets—a neo-colonial resource grabPascoe Sabido and Chloé Mikolajczak

Other Social Europe Publications

The transatlantic relationship
Women and the coronavirus crisis
RE No. 12: Why No Economic Democracy in Sweden?
US election 2020
Corporate taxation in a globalised era

Foundation for European Progressive Studies Advertisement

EU Care Atlas: a new interactive data map showing how care deficits affect the gender earnings gap in the EU

Browse through the EU Care Atlas, a new interactive data map to help uncover what the statistics are often hiding: how care deficits directly feed into the gender earnings gap.

While attention is often focused on the gender pay gap (13%), the EU Care Atlas brings to light the more worrisome and complex picture of women’s economic inequalities. The pay gap is just one of three main elements that explain the overall earnings gap, which is estimated at 36.7%. The EU Care Atlas illustrates the urgent need to look beyond the pay gap and understand the interplay between the overall earnings gap and care imbalances.


BROWSE THROUGH THE MAP

Hans Böckler Stiftung Advertisement

Towards a new Minimum Wage Policy in Germany and Europe: WSI minimum wage report 2022

The past year has seen a much higher political profile for the issue of minimum wages, not only in Germany, which has seen fresh initiatives to tackle low pay, but also in those many other countries in Europe that have embarked on substantial and sustained increases in statutory minimum wages. One key benchmark in determining what should count as an adequate minimum wage is the threshold of 60 per cent of the median wage, a ratio that has also played a role in the European Commission's proposals for an EU-level policy on minimum wages. This year's WSI Minimum Wage Report highlights the feasibility of achieving minimum wages that meet this criterion, given the political will. And with an increase to 12 euro per hour planned for autumn 2022, Germany might now find itself promoted from laggard to minimum-wage trailblazer.


FREE DOWNLOAD

ETUI advertisement

Bilan social / Social policy in the EU: state of play 2021 and perspectives

The new edition of the Bilan social 2021, co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), reveals that while EU social policy-making took a blow in 2020, 2021 was guided by the re-emerging social aspirations of the European Commission and the launch of several important initiatives. Against the background of Covid-19, climate change and the debate on the future of Europe, the French presidency of the Council of the EU and the von der Leyen commission must now be closely scrutinised by EU citizens and social stakeholders.


AVAILABLE HERE

Eurofound advertisement

Living and working in Europe 2021

The Covid-19 pandemic continued to be a defining force in 2021, and Eurofound continued its work of examining and recording the many and diverse impacts across the EU. Living and working in Europe 2021 provides a snapshot of the changes to employment, work and living conditions in Europe. It also summarises the agency’s findings on issues such as gender equality in employment, wealth inequality and labour shortages. These will have a significant bearing on recovery from the pandemic, resilience in the face of the war in Ukraine and a successful transition to a green and digital future.


AVAILABLE HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us on social media

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube