Promoting Sustainable Development: Future Prospects for Minimum Wage in Europe by 2024

Abstract

The long path of global development, largely driven by the desire to increase profits and minimize suffering, has had serious consequences for the environment, social structure and even spiritual well-being. The end of the 20th and the beginning of the 21st centuries were marked by various and persistent crises, including environmental degradation, global climate change, and social and gender inequalities, which forced the state, organizations and individuals to change their approaches. This conflict has triggered changes related to sustainable development. Therefore, as a measure, the European Union has proposed a directive aimed at establishing an adequate minimum wage in all 27 member states. However, the directive allows for flexibility, which means that the level and conditions of the minimum wage will not be standardized across the EU. Despite these initiatives, inflation, which rose sharply in 2022, has undermined the real value of the minimum wage in many EU countries. The Organisation for Economic Co-operation and Development (OECD) has called for regular reviews to protect low-income workers. The objectives of the EU directive include several ideas, including establishing a framework to ensure an adequate minimum wage, the role of collective bargaining in wage setting, and improving workers’ access to the enforcement of their minimum wage rights. However, determining an adequate minimum wage is a complex task. The directive aims to allow Member States to use key international or national indicators when setting minimum wages, with the ratio of minimum wage to average wage providing as a principal indicator of the condition of minimum wage employees. According to the OECD, in 2022, the minimum wage was less than 50% of the average wage in ten EU countries. This article focuses on identifying these problems and proposing solutions to overcome them. UDC: [330.342.3:331.215.53]:061.1EU; JEL: E24, J3, O11;. DOI: https://doi.org/10.53486/dri2024.01