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By Parmy Olson
If you're having trouble managing to get a multimillion-dollar bonus from an investment bank, or even a six-figure salary, you could always go to Luxembourg and work on the minimum wage. Drivers and street cleaners in the diminutive but wealthy country are guaranteed to take home at least 1,413 euros (£1,234) a month on average, or 16,956 euros (£14,802) a year, making Luxembourg top of the list for minimum wages in Europe. If you factored in the United States, where the minimum wage stands at approximately $1,380 (£844) a month, Americans would rank in seventh place among European nations after Luxembourg, the Netherlands , Belgium , France , the U.K. and Ireland , according to data from the European Commission's statistical office, Eurostat, which adjusts and equalizes wages based on their purchasing power. In Pictures
The Netherlands is the second best country in Europe to get a minimum wage, currently standing at 1,336 euros (£1,166), while Ireland is in sixth place with 1,462 euros (£1,276). The Irish minimum wage has become controversial after its economy contracted at an alarming rate following the collapse of its construction sector and spiraling deflation. "A lot of employers, particularly in the Irish construction and leisure and hotel sector, want to have the minimum wage cut," says Robin Chater, secretary general of the Federation for European Employers. Ireland has a significant immigrant population and many of its largely Eastern European workers would rather take a pay packet that's below the Irish minimum wage than head back to their home countries where pay is even worse and jobs are scarcer. In Latvia for instance, the monthly minimum wage is 343 euros (£299), while in Bulgaria it's just 240 euros (£210). The Scandinavian countries of Sweden, Norway, Finland and Denmark don't don't have a minimum wage at all because they are so highly unionized. "The unions there felt that a national minimum wage would interfere with collective bargaining, and it might even bring the price of labor down," says Chater. Nordic countries prefer to have a collective agreement between unions and employers as the reference point for wages, not one set by the government. In some cases, particularly in Denmark, Chater says that has led to a very strong degree of cooperation between employers and workers. "It's quite harmonious. There's a balance in the level of compromise." France , which has Europe's fourth-highest minimum wage at 1,189 euros (£1,038) is famous for its strong, highly politicized unions that have fought to keep salaries for low-paid workers at a reasonable level. Their knack for collective bargaining with employers comes in part from their pervasive influence in French society, where they often take on a community role by being part of local social welfare organizations or even controlling child care in certain parts of the country. In spite of their strength in France and elsewhere, union membership across Western Europe has been steadily falling over the last few years. Even in France unions represent only about 8% of the working population, according to Chater. The reason: Heavy industry--including steel mills, car plants and machine making, long a union mainstay--has been largely outsourced to Asia and developing economies over the last two decades. As a result, heavy industry in Western Europe has declined and so have unions, with their appeal being lost particularly on the younger generation of workers. Eastern Europe History is also being unraveled in Eastern Europe , but in a different way. Before the fall of communism in the early 1990s, around 90% to 95% of the economies of countries like Latvia, Lithuania and the Czech Republic were in state hands, and minimum wages were calculated to be at a subsistence level--just enough money for a person to survive. Since then, and as countries like Poland and Slovakia have joined the European Union , minimum wages have increased dramatically. Even now they are some of the fastest growing on the Continent, with the Slovakian minimum wages having increased by 9.2% in 2009, according to Eurostat. The government of Romania, where the minimum wage is just 263 euros (£230) a month, has set itself a target of bringing the minimum wage up to 50% of the average salary by 2014. That might be tricky in the middle of a recession, but politicians there have already started putting the legislation through parliament. The big question for Europeans now as they struggle to emerge from the worst recession since the Second World War is what to do about minimum wages. Employers in Ireland, for instance, argue that the minimum wage should be cut to make local companies more competitive and improve economic fortunes. But others, particularly unions, would say that the argument goes beyond the issue of economic impact and is a higher question of social justice and ensuring that people stay out of poverty. Chater of the Federation for European Employers believes there is a strong argument for the minimum wage in Ireland to at least be frozen for a couple of years. On the other hand, the minimum wage in some Mediterranean countries such as Greece and Portugal, as well as in Eastern Europe, seem "very low." But he adds that the current economic climate means that in spite of aspirations of many politicians, "it probably won't change."
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