Minimum wages in 2021: Annual review
Published: 10 June 2021
This report summarises how minimum wage rates for 2021 were set during 2020 – the year marked by the COVID-19 pandemic. It reviews the difficulties faced by national decision-makers and how they reacted to the challenges of the economic and social fall-out of the pandemic when making decisions regarding the minimum wage. It maps the extent to which minimum wages were referred to in COVID-19-related support measures. It discusses advances made on the EU initiative on adequate minimum wages and maps the reactions of the EU-level social partners and national decision-makers. The report is accompanied by two complementary working papers: one providing an analysis of developments for low-paid employees and minimum wage workers over the past decade; the other summarising the most recent research on minimum wages in EU countries, Norway and the UK.
Minimum wages were raised cautiously in most Member States from 2020 to 2021, with the median country recording an increase of 3% (calculated in national currencies). Just a few Member States decided to freeze the level of their minimum wage into 2021. This is very different from how Member States reacted during the financial crisis.
In countries without statutory minimum wages (Austria, Denmark, Finland, Italy, Sweden and Norway), wage increases were moderate, but bargaining overall proved reasonably stable. Because collective bargaining was in some cases affected by the pandemic, some renewals and pay increases were postponed.
The main challenge faced by decision-makers during the 2020 round of minimum wage setting was the general economic uncertainty surrounding the pandemic. Where forecasts could be made, they were more uncertain or volatile than usual.
The positions of the social partners on the proposed EU minimum wage directive remain unchanged. In general, employer organisations are most critical and would prefer a non-binding recommendation. Most trade unions are in favour of the initiative but would like to see it go further. Governments’ positions are mixed.
The executive summary for this publication is available in PDF format.
This section provides information on the data contained in this publication.
List of tables
The report has the following list of tables:
Table 1: Gross minimum wages, selected EU Member States and the UK, in € and national currencies, 2020 and 2021 compared
Table 2: Sub-minimum rates for selected EU Member States and the UK as of January 2021
Table 3: Occupational or sector-related statutory minimum wage rates in Cyprus, Malta and Romania, January 2021
Table 4: Seniority- or qualification-related top-ups of statutory minimum wage rates for private sector workers, January 2021
Table 5: Minimum wage rates related to level of hardship or job demands for private sector workers, January 2021
Table 6: Change in monthly minimum wages in collective agreements (%), between 1 January 2020 and 1 January 2021, for selected low-paid jobs (national currencies)
Table 7: Minimum wage setting for 2021 – Countries that followed previous commitments
Table 8: Minimum wage setting for 2021 – Countries that adhered to formulas
Table 9: Minimum wage setting for 2021 – Countries that fell short of previous targets
Table 10: Minimum wage setting for 2021 – Countries that opted for cautious increases
Table 11: Minimum wage setting for 2021 – Countries that froze the level or deferred decisions
Table 12: Change in the number of employees 2019 to 2020 and proportion of minimum wage workers, by sector
Table A1: Legal basis for statutory minimum wages
Table A2: Overview of changes to minimum wage regulations in 2020
Table A3: Wage rates in collective agreements related to 10 selected low-paid jobs, 2020 to 2021, in national currency
Table A4: Minimum wage references used in short-time working schemes or for subsidised employment
Table A5: References to the minimum wage determining the eligibility for income support when employed
Table A6: Minimum wage references used to determine the level of COVID-19-related benefits for self-employed people, working parents and others
Table A7: References to the minimum wage determining the eligibility to obtain certain benefits
Table A8: List of other COVID-19 EU PolicyWatch database cases referred to in this report by country
Table A9: Network of Eurofound Correspondents
List of figures
The report has the following list of figures:
Figure 1: Breakdown of national decision-makers interviewed, based on organisation type and system type (%)
Figure 2: Hourly minimum wages (€), selected Member States, 2021
Figure 3: Collectively agreed average or median monthly pay in 10 low-paid jobs, January 2021 (€)
Figure 4: Minimum wage setting for 2021 and the role of the social partners
Figure 5: Change in number of employees between 2019 and 2020 and proportion of minimum wage workers by occupation, men and women
Figure 6: Stances towards the proposed directive by respondent type (%)
Figure 7: Stances towards the proposed directive by type of wage setting (%)
Learn more about the authors of this publication.
Eurofound recommends citing this publication in the following way.
Eurofound (2021), Minimum wages in 2021: Annual review, Minimum wages in the EU series, Publications Office of the European Union, Luxembourg.
ISBN
978-92-897-2172-1
Number of pages
74
Reference no.
EF21015
ISBN
978-92-897-2172-1
Catalogue number
TJ-AS-21-001-EN-N
DOI
10.2806/47491
Permalink
http://eurofound.link/ef21015
Publication series
This section provides access to content that is related to the publication.
27 January 2022
Minimum wages in 2022: Bigger hikes this time around
8 June 2021
Minimum wages rise again, but the pandemic puts a brake on their growth
3 February 2021
