Wages should never leave workers and their families living in poverty. However, that has been the reality for one in ten workers in Europe. The EU minimum wage directive is a step in the right direction for fairer wages across Europe. Nonetheless, this directive is not an end in itself. More work needs to be done to maximise its potential benefit and ensure that wages are collectively bargained. Collective bargaining is a collective benefit: it means better outcomes for workers, the economy and society as a whole.
Wage inequality is on the rise, pushed by technological change, globalisation and trade, and institutional deregulation. It is a problem of fairness. But inequality itself also has negative effects on the economy as a whole. Increasingly, this inequality can be traced back to companies and pay setting. Companies increasingly differ in their productivity and revenue. […]