In a report published on Wednesday, the IGSS said the unqualified minimum wage should go up by 34 euros a month, corresponding to statements made by labour minister Marc Spautz this week. However, the trade unions OGBL and LCGB do not agree with this analysis, recommending instead that the minimum wage should increase by €303.
Like all other EU countries, Luxembourg must evaluate an adequate minimum wage in accordance with the Minimum Wage Directive.
The government has opted to use 60% of the average income as an indicator to calculate minimum wage, using the so-called Kaitz index, which divides minimum wage by average income, multiplied by 100.
An alternative option would be 50% of the gross average income. The IGSS said this indicator does not directly show what is necessary to have a decent life. The unions agree that the median income should be used as a reference, but that the average could be more accurate.
The discrepancy is the method of calculating the median income. The IGSS relies on Eurostat and says that supplementary options such as the thirteenth month, bonuses or other gratuities should be ignored. This corresponds with labour minister Marc Spautz’s beliefs. But the issue the trade unions have with this methodology is that it artificially shrinks the average income, with a knock-on effect on the minimum wage.
In the IGSS report, the average income is calculated to be €4,563, and an increase of 34 euros would bring the minimum wage to 60% of this amount. However, the Chamber of Commerce quotes different IGSS figures, namely an average income of €5,010 per month, and demands an increase of 11.2%, or 303 euros.
Both Minister Spautz and the IGSS say it makes sense to calculate the average income without additional bonuses, as minimum wage is a basic salary. But the LCGB’s Patrick Dury counters that minimum wage earners frequently do not benefit from additional revenue and are therefore doubly disadvantaged. When calculating the adjustment to general wage development every two years, these bonuses are also not included.
Neither, or both. The EU directive does not go into details, but leaves minimum wage as a political choice.
Communication in this area has not helped. The government, under former labour minister Georges Mischo, wanted to take out the civil service salaries in order to push the average wage down. In addition, different figures can be found on Eurostat, because the methodology is different, but also the national statistics office Statec has a different median in its database than the IGSS.
Perhaps only people who have to live on the minimum wage can say whether it is enough or not. However, one should not lose sight of the big question: Can they own a home without a mortgage or not?
If there is an index tranche this year, as promised by ministers on Friday, the unqualified minimum wage would go up by 68 euros a month to €2,771. After the annual change and adjustment of 3.8% as announced, it would sit at €2,876.
However, it is important to say in connection with the directive: The index applies to every employee, so the median also increases accordingly. The adjustment of the minimum wage to the general wage development, is made every two years, and the next one, on January 1, 2027, will be calculated retroactively to the years 24-25. To say that “the minimum wage” is already going up anyway is definitely correct, but not entirely fair, because all the other wages have also increased. S
However, employers point out that an increase in the minimum wage does not affect companies that pay high salaries, nor the state, but rather small businesses in trade, crafts or catering. They will have to see how they can come to an agreement, because those who earn a lot do not want to pay more for their products.
