EU riven by big wage disparities

13-12-2016

Accommodation services is the lowest-paying sector in the EU. [Shutterstock]

Income inequality is rife within the EU, with average wages in northern member states up to five times higher than those in Southern Europe, according to Eurostat figures published on Monday (12 December).

Eurostat this week published figures on income disparities and wage distribution within the EU. The Structure of Earnings Survey carried out every four years by the EU’s official statistics office, revealed that the gap between high and low earners is smallest in Scandinavia and Belgium and widest in Poland, Romania, and Cyprus, while women and young people are most likely to be low earners.

In a comparison of the gross hourly wages of the top 10% of earners with those of the bottom 10% in each EU member state, Sweden came out on top as the country with the most equal earnings, at a ratio of 2.1 to 1.

Survey: Minimum wages uneven in EU

New EU data shows that there are huge differences in the minimum wage workers receive, depending on the countries in which they’re employed.

Belgium, Finland, and Denmark came in joint second place, all with a high to low wage ratio of 2.4. Close behind, with a ratio of 2.7, is France.

At the other end of the scale, Poland’s top 10% of earners make 4.7 times more per hour than the country’s bottom 10%. This was closely followed by Romania, with a ratio of 4.6, and Cyprus, with 4.5.

No data was available for Croatia or Greece.

No end in sight to posted workers debate

EU member states continue to clash on the reform of the posted workers directive, in a dispute that looks likely to drag on for a long time to come. EURACTIV France reports.

Big differences in median wages

While the discrepancies in wage equality between EU member states are significant, the differences between median wages are even more striking.

The median gross hourly wage in Denmark is €25.50, compared to just €1.70 in Bulgaria. When corrected to the purchasing power standard (PPS), the average Dane earns €18.50 per hour; more than five times more than the average Bulgarian at €3.60 per hour.

Just above the bottom spot was Romania, where the median gross hourly wage of €2.00 corresponds to €4.00 PPS. Then come Latvia and Lithuania, where the actual median wages of €3.40 and €3.10 translate to €5.00 and €5.10 PPS.

Minimum wage debate in EU centres on social dumping, ‘fair pay’

Germany’s adoption of a minimum wage in 2015 and the EU’s repeated talks over posted workers have paved the way for the adoption of a European minimum wage. But political resistance in some quarters is still strong. EURACTIV France reports.

Back at the top of the scale, Denmark is closely followed by Ireland, with a median hourly wage (PPS) of €18.40, then Belgium (€15.40 PPS), Germany and Luxembourg (both at €15.00 PPS).

Finance sector out on top

Financial and insurance activities are the highest paid across the EU, appearing in the top three sectors in every member state except Ireland. Information and communication also appear in the top three highest-paid sectors in the majority of EU countries.

Mining and quarrying tend to be a high-earning sector too, topping the list for the UK, the Netherlands, and Denmark.

However, accommodation and food services workers earn consistently low wages across the EU, coming bottom of the list in every member state with the exception of Spain and Slovenia, where they come second from bottom.

Paris pushes EU-wide minimum wage in crusade against social dumping

The newly agreed minimum wage in Germany may not be implemented before 2017. Yet it is crucial for limiting social dumping, according to the French government, which announced a new offensive against low-cost workers ahead of next year's European Parliament elections.

Women and young people earn less

When it comes to the proportion of low-wage earners, Belgium, and the Scandinavian countries again leave their EU partners behind.

Just 2.6% of Swedish workers earn less than the country’s low-wage threshold of €12.30 per hour. The numbers of low-paid Belgian (3.8%), Finnish (5.3%) and Danish (8.6%) workers are also far below the EU average of 17.2%.

More than one in four Latvian workers (25.5%) earns less than the low-wage threshold of €2.20 per hour. This is closely followed by Romania (24.4%), Lithuania (24%) and Poland (23.6%).

And perhaps more surprisingly, 22.5% of German and 21.3% of UK workers earn less than their respective countries’ low wage thresholds of €10.50 and €9.90 per hour.

Across all EU member states, women (21.1%) and young people under 30 years old (30.1%) are most likely to be low earners.

Background

Comments

4 responses to “EU riven by big wage disparities”

ivan burrows says:

13/12/2016 at 12:37

Could that be because the EU is made up of different Nation States ?, just another reason to end the pointless EU.

- anders says:
  
  13/12/2016 at 13:22
  
  Maybe I am wrong, but EU, just like the rest of the world, is made of ‘different’ Nation States, hence I somehow cannot follow your argument that ‘if Nation States would have fiscal Policy then they would make better. On the other hand, in my opinion, keeping us united ‘only’ as consumers, and not as citizens, does not make justice to your criticism. But if we are more concentrated on nation states, we continue being united as consumers and divided as citizens, the banksters are doing great, and we are all happy in populism, mainstream and revolutionary politicians. It just doesn’t make sense to say you want more equality, but then limit this discussion within borderless economy in Europe.
  
  - ivan burrows says:
    
    13/12/2016 at 14:23
    
    They are Nations that are hamstrung by EU policy & single currency that in turn lowers wagers, forces people to leave their Nation and stops those Nations taking appropriate fiscal policies to address the problem. In short the Euro has been a disaster for Southern & Eastern Europe.
    
    - anders says:
      
      13/12/2016 at 17:56
      
      I see all of the above conditions happening in places outside of EU, and thus I cannot understand why EU is the creator of such conditions. Regarding Southern Europe I could say that décades of mismanagment plus the fact that banks have rolled their crisis in MSs, does not put EU in the wrong. Indeed, for example, without Greece, the EU would not move so fast to try to have a better coordination in the fiscal Policy. However, it goes without saying that greek governments have huge responsibilities for the décades of reckless spending. Eastern Europe is a different situation.