Former LSAP labour minister Nicolas Schmit does not approve of the CSV-DP government’s decision to not adapt minimum wage to the index and adjustments. In an interview with RTL Radio on Friday, Schmit, who served as EU Commissioner for jobs and social rights until 2024, expressed a number of criticisms and thoughts on the recent announcement.
On 1 January next year the minimum wage will go up by 6.3%, or 170 euros per month, but this change does not take into account the minimum wage in relation to other salaries, nor the overall structure. Schmit said the decision meant the country was “running backwards, looking into the past, not the future.”
Schmit, who authored the EU’s directive on minimum wages, said he got the impression that many who discussed the directive in public “either didn’t read it, or just skimmed it or forgot what it says.” The main point was that the minimum wage should “honour” work and allow people to have a decent life. He also agreed with the conclusion that the lack of affordable housing is the main cause of the dispute over the minimum wage.
One of the indicators that the government also decided on is that the minimum wage should correspond to 60% of the median income. Schmit called it a “real scandal” that the government tried to calculate the median income by first excluding civil service, then free public transport and then supplements and bonuses - in other words, things that people on the minimum wage often do not benefit from.
When asked about the fact that his directive does not prescribe a methodology, the former EU Commissioner replied: “A directive is a directive. It is not a regulation that clearly and precisely states what applies. But when we talk about international criteria, it is considered that when we talk about salary, we actually look at the overall salary, not calculating something here and calculating something there.”
Furthermore, according to Schmit, it should be noted that the government “does not have much to offer” in terms of social dialogue, which is clearly required in the directive. The trade union demanded a wage increase of over 11%, which employers and the government believe is unaffordable for companies. Here, the former Minister of Labour explained that the unions always have the right to make their demands. Negotiations would then have to take place and, in his opinion, it could have resulted in a wage increase that would be progressively extended over 3-4 years.
The Luxembourg employers’ association also pointed out that the civil service, with an average wage of around 9,000 euros, pushes up the overall median, while in sectors such as crafts, trade and hospitality, the current unskilled minimum wage already exceeds the average of those sectors. For Schmit, since sectoral averages are not taken into account, the discussion about minimum wage is not just economic, but social and societal as well. He raised the question: “Do we want to exclude those people? Well, then we’d have a society for craftsmen, a society for civil servants, a society for people in the financial sector.”
The former Minister of Labour added that in the crafts and industry, for example, people often receive more than the minimum wage and that lower wages often result in lower productivity. He also agreed with the crafts sector when it complains that it can no longer find staff, but here he quoted former US President Biden: “Pay them better.”
Schmit declined to comment on Paulette Lenert’s candidacy for the State Council, and said that at his age, he would not partake in career planning, when asked if he would consider a return to politics.
