Croatian Minimum Wage Still Lagging Behind Most Newer EU Member States

Lauren Simmonds

As Poslovni Dnevnik writes on the 12th of February, 2020, despite the 8.3 percent rise in the Croatian minimum wage in 2020, Croatia is increasingly sinking the Eurostat rankings that monitor the movement of guaranteed wages across Europe. With a gross minimum wage of 546 euros, Croatia remains better than Hungary and Romania, but most of the newer member states of the European Union have surpassed the country.

The minimum wage is prescribed in 21 of the 27 countries within the European Union and varies significantly from country to country, depending on development, standard of living and social sensitivity.

Minimum wages are expressed in gross amounts and countries with a prescribed minimum can be divided into three groups. In the first group, which includes Croatia, countries with minimum wages go up to 700 euros. Bulgaria is at the forefront with a minimum wage of 312 euros, with Poland being the best, with workers being guaranteed a wage of at least 611 euros, according to tportal.

In the past few years, Poland, the Czech Republic, Slovakia, Estonia and Lithuania have skipped past the Croatian minimum wage.

The Croatian minimum wage is in the middle, but until recently it was at the top of this group. In addition to Poland, the Czech Republic, Slovakia, Estonia and Lithuania have also skipped past Croatia over the last few years.

There are six EU countries in the ”golden group” with a minimum of between € 700 and € 1,400. On the lower border is Portugal with 741 euros and on the top is Spain with 1050 euros. The only transition country to break into this group is Croatia’s nothern neighbour – Slovenia, where the minimum wage has reached 941 euros.

In the third group are six rich countries from the north and west of the European Union, in which the minimum exceeds 1,400 euros. France is at the bottom with 1,539 euros and Luxembourg is in front, with a guaranteed minimum wage of 2142 euros, which is almost twice the average Croatian salary.

Eurostat also monitors the movement of the American minimum wage, which currently stands at the equivalent of 1,119 euros and is close to that of Spain.

The highest minimum wage in the European Union was almost seven times higher than the lowest minimum wage, but the range is smaller when one considers purchasing power. Namely, minimum wages in EU member states with lower price levels become relatively higher when the purchasing power standard (PPS) is expressed, and they are relatively lower in member states with higher price levels.

By eliminating price differences, minimum wages range from 579 euros in Bulgaria to 1705 euros in Luxembourg, which means that the highest minimum is about three times the lowest minimum.

Given that there are differing practices across European countries in setting guaranteed wages, the European Commission has recently launched an initiative to create uniform criteria that would serve to set the statutory minimum wage.

The idea is that it amounts to at least 60 percent of the median salary in a particular country. However, this proposal has encountered resistance in the Scandinavian countries, which are reluctant to administratively fix minimum incomes.

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