The debate over the level of minimum wages in Luxembourg is in full swing. In fact, the country should already have implemented the EU directive on adequate minimum wages.
However, the discussion has somewhat faded into the background amid disputes over collective bargaining agreements and the broader national debate on pensions. Labour Minister Marc Spautz, meanwhile, has said that the government intends to honour the country’s longstanding policies, with minimum wages likely set to be adjusted to general wage developments across companies before Easter.
Luxembourg currently has two main minimum wage levels. The first is the unskilled minimum wage, which stands at around €2,700 gross per month, tax-free.
The second is the skilled minimum wage, typically granted to workers who hold a diploma or have completed vocational training. That wage stands at over €3,200 per month.
For comparison, an unqualified entry-level job in the public sector starts at about €3,600 gross per month. With vocational training, the salary can exceed €4,000.
As things stand, Luxembourg has the highest minimum wage in Europe, clearly surpassing its neighbouring countries. In Germany, the equivalent can reach about €2,400 for a 40-hour workweek. In Belgium, it is around €2,000, while in France it stands at €1,823 for a 35-hour workweek.
Nevertheless, Luxembourg’s high living costs also have to be factored in, as many workers living off the minimum wage still struggle financially – notably to high housing costs.
According to the National Institute of Statistics and Economic Studies (STATEC), around 70,000 employees in Luxembourg earn the minimum wage. Of these, about 30,000 receive the skilled minimum wage, while around 40,000 are paid the unskilled minimum wage.
In the private sector, between 16 and 18% of workers earn the minimum wage.
Although Luxembourg’s minimum wage is already high, it could increase further once the EU directive on adequate minimum wages is implemented. The directive recommends that minimum wages correspond to either 50% of the average income or 60% of the median income.
The median refers to the midpoint of the income distribution, where half of workers earn less and half earn more. Using the median income based on STATEC data from 2022, the minimum wage would rise to around €3,160 per month.
If the average income were used instead, and more recent Eurostat figures applied, the minimum wage could reach up to €3,400, significantly higher than the current €2,700.
So far, Labour Minister Marc Spautz has indicated a preference for using the median income as the benchmark, which would result in a more moderate increase. Employers, however, oppose any increase.
The debate intensified this week following demands from the Federation of Crafts and Trades to not only refrain from increasing the minimum wage but also to abolish the skilled minimum wage entirely.
With more than 100,000 employees, the crafts sector is the largest employer in the country. Over 20,000 of its workers earn the minimum wage.
Romain Schmit, secretary general of the federation, points to several arguments. He notes that the minimum wage has already increased by 17% over the past four years and further argues that high salaries in finance and in public service distort overall income figures, pushing both the median and the average upward.
Schmit also warns that raising the minimum wage further could create tensions within companies. Workers on the minimum wage would move closer to those earning slightly more, potentially forcing employers to raise salaries across the board.
At a time when businesses are already under significant pressure, he argues that many could not absorb those costs.
Trade unions, meanwhile, have strongly rejected the proposal to abolish the skilled minimum wage. Patrick Dury of the Luxembourg Confederation of Christian Trade Unions (LCGB) says the demand makes little sense.
Instead, he argues, the focus should be on encouraging young people to pursue vocational training in the crafts sector, not discouraging them.
Government ministers have so far made it clear that they have no plans to abolish the skilled minimum wage, and that the EU directive will be implemented.
