Working Class Morning Future
Guiding Investigation 20 May May 2019 0943 20 May 2019

Minimum wage: one, perhaps, is not enough

But are we sure that introducing a single minimum wage is right? The cost of living, and consequently the poverty lines, can vary greatly depending on the geographical area. Not only in the Old Continent, but also in Italy. We should therefore talk about more than one minimum wage, instead of just one.

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From time to time, the debate on the possible introduction of a minimum wage in Italy comes back to the fore. The same is true for Europe: Emmanuel Macron, in his Pour un Renaissance européenne, puts forward the proposal of a European minimum wage. But are we sure that introducing a single Italian or European minimum wage is the right thing to do? The cost of living, and consequently the poverty lines, vary depending on the geographical area. Not only in the Old Continent, where 22 out of 28 countries have already established it by law, but also in Italy. We could therefore talk about many different minimum wages and not just one.

Istat (Italian National Institute of Statistics), in fact, calculates different thresholds of absolute poverty based on macro-regions (North, Central, and South) and by type of administration (metropolitan area, large municipality, small municipality). The difference in expenditure per family can reach almost 500 euros per month, between the central municipalities of metropolitan areas and those with less than 50 thousand inhabitants. In the United States, moreover, but also in the United Kingdom, minimum wages are already differentiated by urban area, based on differences in the cost of living. Living in London or New York, in short, does not carry the same costs as living in a country village. And the same difference applies to those who live in Milan or Rome, compared to those who live in a small town in the Apennines or on the Italian coast.

In the United States, but also in the United Kingdom, there already are minimum wages differentiated by urban area, based on the differences in the cost of living

According to the experts from Lavoce.info, the wide territorial differences suggest that a single plan for supporting minimum wages would probably not be effective. On the other hand, however, having a large number of minimum thresholds means that the system is more complex and there are incentives for mobility to take advantage of the cheaper minimum. A regional correction can therefore be a good compromise to start with. There are also differences within regions, but the main gradient is between the north and south of the peninsula.

The same applies to Europe. A European minimum wage, as proposed by the French president and subsequently by the Italian government, however useful it may be as an instrument for the convergence of the member countries, runs the risk of being too rigid in a highly differentiated context, in Italy and even more so throughout the European Union. Between Germany and Romania, there are huge differences, for example.

Almost all EU countries guarantee a minimum wage for their workers, except Austria, Cyprus, Denmark, Finland, Sweden and Italy.

Almost all EU countries guarantee a minimum wage for their workers, except Austria, Cyprus, Denmark, Finland, Sweden and Italy. However, with enormous differences. The country with the lowest minimum wage is Bulgaria, with 1.24 euros per hour (286 euros per month). Luxembourg is the highest, with €11.12 an hour (€2017 a month).

The positions on the subject, in Italy, are varying. Those in favour of the minimum wage because it would reduce poverty and inequality and increase the standard of living of workers. And those who assert that it is harmful to businesses and that it actually increases poverty and unemployment, lowering the thresholds already established by collective agreements, which currently cover about half of the country’s employees.

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