manos matsaganis (politecnico di milano

LPS–LaboratoriodiPoliticheSociali

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Historyandpoliticsoftheminimumwage

ManosMatsaganis(PolitecnicodiMilano)

DAStUWorkingPapers

n.02/2020(LPS.09)ISSN2281-6283

DAStU Working Papers – LPS History and politics of the minimum wage | Matsaganis

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Abstract

Anationalminimumwage,setbythegovernmentorbythesocialpartners,currentlyexistsinmostcountriesinEuropeandbeyond.Italyisarareexception.Inrecentyears,allpartiestothecountry’srulingcoalitionhavesubmittedbillsproposingtheintroductionofastatutoryminimumwage.Thispaperaimstocontributetothisdebateindirectly,bypresentingthehistoryandthepoliticsoftheminimumwageinanumberofcountries.Inparticular,thepaperdiscussesinsomedetailthecasesoftheUKandGermany,whereastatutoryminimumwagewasintroducedin1997and2015respectively.Thepaperconcludesthatnationalpathways,althoughclearlysteepedinthe specific circumstances of each country, reveal striking similarities that may enrich ourunderstandingofthedesirabilityandpotentialimplicationsofanationalminimumwageinItaly.

Keywords

Employment,lowearnings,publicpolicy,welfare.

Theauthor

ManosMatsaganis([email protected])isProfessorofPublicFinanceattheDepartmentofArchitectureandUrbanStudies,PolytechnicUniversityofMilan.

Acknowledgements

EarlierversionsofthispaperwerepresentedattwoseminarsinMilan(atPolitecnicodiMilano,andOsservatorioNazionalesullepolitichesociali).AnItaliantranslationwaspublishedasSocialCohesionPaper2/2020bytheOsservatorioInternazionaleperlaCoesioneel’InclusioneSociale,ReggioEmilia.TheauthorisgratefultoPaoloGrazianoforcommentsandsuggestions.

LPS–LaboratoriodiPoliticheSocialihttp://www.lps.polimi.it/

Comecitarequestoworkingpaper/Howtocitethisworkingpaper:Matsaganis,M.(2020)Historyandpoliticsoftheminimumwage,inDAStUWorkingPaperSeries,n.02/2020(LPS.09).


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1.IntroductionAnationalminimumwage,setbythegovernmentorbythesocialpartners,currentlyexistsin171of the 186 countries that aremembers of the International LabourOffice (ILO 2017). Italy isamong the very fewexceptions. In 2018-2019, all parties to Italy’s ruling coalition separatelysubmittedanumberofbillsproposingtheintroductionofastatutoryminimumwage1.ThispaperdoesnottakesidesonthedebateaboutthedesirabilityorotherwiseofanationalminimumwageforItaly.Itsaimistocontributetothisdebateindirectly,byshiftingtheperspectivetolessonsfromabroad.

Theminimumwagehasalwaysbeencontroversial,especially(butnotexclusively)shortlybeforeitsintroduction,dividingexpertsandpolicymakerslikefewotherpolicyissues.Tosomeextent,thedecisiononwhether to introduceanationalminimumwageat all – and,once ithasbeenintroduced, whether to raise it, and if so by howmuch – rests on normative considerations(usuallymixedupwithpositiveones).Nonetheless,internationalexperienceteachesusthattheconvictionsofsocialandpoliticalactorsmayevolveinthelightofchangingcircumstances,andthatthisopensuppossibilitiesforpolicyinnovation.

Thecurrentinstitutionalconfigurationoftheminimumwageinanygivencountryisthelegacyofhistoryandpolitics.Thetwoareclearlyintertwined.Notwithstanding,foranalyticalreasonsthenextsectionfocusesonthefirsthundredyearsoftheminimumwage(fromthe1890stothefallof theBerlinWall),whilesection3discussesthepoliticsof theminimumwagefromtheearly1990s to thepresent time in a number of emblematic cases. Section4 concludeswith a briefreflectiononthemainlessonsforItaly.

2.EarlyhistoryConcernwithlowpayisasoldascapitalism(nottomentionearliermodesofproduction),butthehistoryofminimumwage legislation is relatively recent.Our story starts in the1890s, in theAntipodes.

2.1.BelleÉpoqueIn 1894, New Zealand’s parliament passed the Industrial Conciliation and Arbitration Act,becoming the first ever to legislate a national pay floor. The Act’s original intentionwas thecreationofaformalbipartiteinstitutionalframeworkfortheresolutionofindustrialdisputes:theintroductionofaminimumwagewasnotitsprimaryconcern.Nevertheless,theActgraduallyputinplacetheconditionsfortheemergenceofawidelyacceptedsystemfordeterminingminimumwageratesinthecountry.

NewZealandwasfollowedtwoyearslaterbytheAustralianstateofVictoria,whichenactedtheWagesBoardsLaw(1896).“Thislawwasdesignedexpresslytocreatethemachineryforthefixingof legalminimumwages in the sweated industries.” (Holcombe1910,p.575) In thewordsof

1TheDemocraticParty(Pd)haspresentedthreelegislativeproposals,twointheSenate(no.310of3May2018,latersupersededbyno.1132of11March2019),andoneintheHouse(no.947of18July2018).TheFiveStarMovement(M5S)hassubmittedonesuchbillintheSenate(no.658of12July2018).Moreover,thesmaller‘FreeandEqual’party(LeU)haspresentedtwobills(no.862of2July2018intheHouse,andno.1259of30April2019intheSenate).Finally,theopposition‘BrothersofItaly’(FdI)partyontheFarRighthasalsosubmittedaproposaltotheHouse(billno.1542of28January2019).Theintroductionofastatutoryminimumwagewasfirstmentionedinthe‘JobsAct’(Lawno.183of10December2014).


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Sidney and Beatrice Webb, social reformers, active members of the Fabian Society, and co-founders of the London School of Economics, the ‘sweating system’ was characterised by‘unusually low rates of wages, excessive hours of labour, and unsanitary work-places’2. TheAustralian system ‘quickly attracted the attention of European economists’. In the UnitedKingdom,the‘sweatingsystem’hadbecomethesubjectofaninvestigationbyaselectcommitteeof theHouseofLords(1888-1890),but thathadcometonothing.TheLiberal landslideat thegeneralelectionof1906changedthedirectionofgovernmentpolicy:

“Afteradecadeofactivity,duringwhichnoimportantbodyofpublicopinioninVictoriahasdemandedtheabolitionoftheboardsortherenunciationoftheprincipleofalegalminimumwageinthesweatedindustries,thereturnoftheLiberalstopowerinEnglandbroughtministers into officewhowere disposed to give theVictorian systema trialunderthelessfavorable,thomoredistressing,Englishconditions.SelectcommitteesofParliament again sat upon the question, and a competent investigator was sent toVictoriatostudyonthegroundtheoperationofthewagesboards.TheresultwastheTradeBoardsActof1909.”(Holcombe1910,p.575)

Initially,theactappliedtoonlyfour‘sweatedindustries’,wherewagesweredeemedundulylow:domesticchainmaking,ready-madeandwholesalebespoketailoring,paper-boxmaking,andthemachine-madelaceandfinishingtrade.Intheseindustries,WagesBoardswereestablishedasaformofcompulsoryarbitrationonpay,consistingofequalnumbersofemployers’andworkers’representatives, plus independentmembers nominatedby the government (Blackburn1991).Theirscopewasgraduallyexpandedintomoreindustries.WagesCouncils(asWagesBoardswerelaterrenamed)endedupsetting‘alotofminimumwageratesfordifferentoccupations,agesandregionsinthecoveredindustries’(Manning2013,p.58).

2.2.Post-WWIIn1918,twoCanadianprovinces(BritishColumbiaandManitoba)legislatedaminimumwage.Twoyearslater,similarlawswereadoptedinfourmoreprovinces:Ontario,Quebec,NovaScotia,andSaskatchewan(1920).Theseearlyminimumwagelawsonlycoveredwomenandonlysometypesofjobs.Thethinkingatthetimewasthatlabourunions(whichrepresentedmaleworkers)didabetterjobofensuringthatmenearnedalivingwagebybargainingontheirbehalf.

IntheUnitedStates,theCommonwealthofMassachusettshadbeenthefirsttopassaminimumwage statute (1912).Nevertheless, a federalminimumwagewas only adopted a quarter of acenturylater,duringthepresidencyofFranklinDelanoRoosevelt(1933-1945).Speakingshortlyaftertakingoffice,atthedepthoftheGreatDepression,whentheunemploymentratestoodatanastounding 25% of the workforce, the President had used these words to announce hisadministration’sintentiontointroduceanall-encompassingminimumwageatfederallevel:

“InmyInaugural[speech]I laiddownthesimplepropositionthatnobodyisgoingtostarveinthiscountry.Itseemstometobeequallyplainthatnobusinesswhichdependsforexistenceonpayinglessthanlivingwagestoitsworkershasanyrighttocontinueinthiscountry.By‘business’Imeanthewholeofcommerceaswellasthewholeofindustry;byworkersImeanallworkers,thewhitecollarclassaswellasthemeninoveralls;and

2‘Howtodoawaywiththesweatingsystem’.Addressbeforethe24thannualcongressoftheCo-operativeWholesale Societies, held atRochdale in 1892. Published in 1898 as ChapterVI inProblems ofModernIndustry(London:Longmans).CitedbyHolcombe(1910,p.574).


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bylivingwagesImeanmorethanabaresubsistencelevel-Imeanthewagesofdecentliving.”3

Thatannouncement,madeinthecontextofthePresident’sStatementontheNationalIndustrialRecoveryAct(16June1933),thefoundationofRoosevelt’sNewDealplanfortherevivaloftheUSeconomy,sentshiversdownthespineofconservativepoliticians,businessrepresentatives,andorthodoxeconomists,whothoughtitself-evidentthatanationalminimumwagewasboundto‘destroyjobs’.Aswewillseeshortly,thispredictionfailedtomaterialise–thoughthatdidnotstoptheobjectionfromsurvivingtoourverydays.

Fivemoreyearspassedbeforeafederalminimumwage(initiallysetat25centsperhour)couldbefinallyintroduced,asoneoftheprovisionsofthelegendaryFairLaborStandardsActof1938.TheActestablisheda48-hourworkweek,guaranteedovertimepayat1.5timesthenormalrateincertainjobs,andprohibitedtheemploymentofminorsin‘oppressivechildlabor’.Notwithoutreason,RooseveltconsideredtheFairLaborStandardsAct“themostimportantpieceofNewDeallegislationsincetheSocialSecurityActof1935”.Almostimmediately,opponentsarguedafederalminimumwagewasunconstitutional,andchallengeditintheSupremeCourt,whicheventually(1941)ruledinitsfavour(Neumark&Wascher2008).Coveragegraduallyexpanded,fromabout20%oftheworkforceintheearlyyearstonearly80%in1970.

2.3.Post-WWIIAftertheSecondWorldWar,morecountriesadoptedanationalminimumwage,includingnewlyindependentonessuchasIndia(1948)andPakistan(1961).InLatinAmerica,whereminimumwagesystemshadalreadybeenintroducedinMexico(1937),Chile(1937),andBrazil(1938),theywerenowlaunchedinColombia(1955)andArgentina(1964)(Grimshaw&Miozzo2003).

InFrance,anationalminimumwage(SalaireMinimumNationalInterprofessionnelGaranti–SMIG)wasimplementedin1950.Indexedtoconsumerprices,SMIGquicklyfellbehindaverageearnings,boostedbythespectacularproductivitygainsofthepost-wardecades(LesTrenteGlorieuses).In1970,itwasreplacedbySMIC(SalaireMinimumInterprofessionneldeCroissance),adjustmentstowhich were explicitly linked to changes in average gross earnings in manufacture. NationalminimumwagesystemswerealsointroducedinBelgium(1968),andintheNetherlands(1969).

InSouthernEurope,thespreadofminimumwageswasuneven.InPortugal,itsintroductionwasan emblematic reformof theCarnationRevolution,whichoverthrew the authoritarianEstadoNovoregime(1974).InSpain,theminimumwage,first introducedbyGeneralFranco’sregime(1963),wasreformedfouryearsaftertherestorationofdemocracy(1980).InGreece,anationalminimum wage had been legislated as early as in 1936, later became subject to collectivebargaining (1955), and was subsequently set unilaterally by government under the militarydictatorship (1967-1974), until the return of democracy restored the previous system ofminimumwage regulations enshrined innational general collective agreements signedby thesocialpartners.

Theoilcrisesofthe1970s,andtheriseofneoliberalisminthe1980s,haltedtheexpansionoftheminimum wage. A review of this policy instrument published in the Journal of EconomicPerspectives concluded that ‘the minimum wage is overrated: by its critics as well as itssupporters’ (Brown1988, p. 144). In Britain, the Conservative government, having started todismantle the Wages Councils in the 1980s, abolished them altogether in 1993, leaving the

3PresidentFranklinRoosevelt’sStatementontheNationalIndustrialRecoveryAct(16June1933).


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countrywithnominimumwagesexceptinagriculture.Nevertheless,asitturnedout,reportsoftheminimumwage’simminentdeathweregreatlyexaggerated.

3.RecentpoliticsShortly after the fall of the BerlinWall, a number of Eastern European countriesmaking thetransition to a market economy adopted a national minimum wage: Lithuania (1990), thenEstonia,Latvia,Hungary,Slovakia,andtheCzechRepublic(1991).Othershadalreadydoneso:Romania (1949), Bulgaria (1966) andPoland (1970). BeyondEurope, several developing andemergingeconomiesalsoestablishedminimumwagesystems.Chinaadoptedsuchasystemin1994;SouthAfricadidsoaftertheendofapartheidin1997.

Ofthemostrecentdevelopments,twoinparticularstandoutintermsofbroadersignificance:theintroduction of a national minimumwage in the UK (1998) and Germany (2015). These arediscussedinconsiderabledetailbelow,followedbyabrieferupdateofpolicychangesintheUS,Hungary,Greece,andalsoatEUlevel.

3.1.TheUnitedKingdomIn the runup to the1997general election, thenationalminimumwage featured large, as theLabourPartycampaignedonapledgetointroducesuchapolicyifelected,whiletheincumbentConservativePartyfirmlyopposeditonthegroundsthat‘minimumwagesdestroyedjobs’.

OntheBritishLeft,support foranationalminimumwagehadnotbeena foregoneconclusion(Rutteretal.2012).Untiltheearly1980s,mosttradeunionistsharbouredseriousreservationsaboutthedesirabilityofthepolicy.UnionleadersatthemightyTransportandGeneralWorkers’Union(TGWU) fearedthatastatutoryminimumwagewouldunderminecollectivebargaining,andbyimplicationlabourunionsthemselves.Incontrast,theNationalUnionofPublicEmployees(NUPE)andtheLowPayUnitthinktankarguedinfavourofanationalminimumwage.

Attitudesbegantoshiftasunionmembershipdeclined,whileevidencemountedthatearningsinequalitieswidened.In1984,theScottishTradeUnionCongresspassedaresolutioninfavourofaminimumwage;twoyearslater,theTradesUnionCongress(TUC)votedforthesameprinciple(againstopposition ledby theTGWU). In1985, theLabourPartypasseda conferencemotionsupportinganationalminimumwageoftwothirdsofmalemedianearnings.The1992Labourmanifestocameoutinfavourofthepolicy,buttheConservativeswereabletoclaimthatanationalminimumwage(which,attwothirdsofmalemedianearnings,wouldhavebeenthehighestinthedevelopedworld)wouldbedisastrousforemployment,famouslyclaimingthatitwoulddestroybetween 750,000 and 2,000,000 jobs.When Labour lost the 1992 general election by a largemargin,thefeelingwasthatthepolicyhadbeenanelectoralliabilityfortheparty.

Nevertheless,ratherthanturningawayfromminimumwages,Labour(underanewleadership)setaboutrefiningthedetailsandbuildingsupport.In1995,thepartycommittedtocreatingaLowPayCommission,madeupofrepresentativesofemployersandemployees,andofindependentexperts,whichwouldadvisethegovernmentontheappropriatelevelofthenationalminimumwage. In the meantime, academic opinion had also shifted, as new research challenged theconsensus that ‘theminimumwagedestroyed jobs’.Evidencebegantopour in that, in theUS,increasestotheminimumwagehadnoeffectonemploymentforthoseagedover25,andonlyasmalleffectforthoseunder25,whichwasevensmallerifyoungerworkersweresubjecttoalowerminimumwage(Card&Krueger1995).Similarly,intheUK,scholarsanalysedtheeffectoftheabolitionofWageCouncilsandconcludedthatithadnotincreasedemployment(Dickensetal.1999).


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The Labour leadership also felt emboldened by the realisation that the principle of having anationalminimumwagewasnolongercontroversial.EventheConfederationofBritishIndustry(CBI)seemedpreparedtolenditssupport.Aslateas1995,theCBIhadbeenarguingthat“evenalow minimum wage would reduce job opportunities and create major problems for wagestructures in a wide range of companies”. By 1997, it had changed track claiming that “theappropriateandfeasiblepurposefortheNMWistocreatea‘floor’tothelabourmarket.”(Metcalf1999).

Labour’s landslidevictory the1997general electionpaved theway for theNationalMinimumWageAct,whichcameintoforceon31July1998,implementinganationalminimumwagefrom1April1999:

“Butratherthanlegislatedirectly,thenewgovernmentsetupanindependentLowPayCommissioninJuly1997tomakerecommendationsontheappropriateformandlevelthattheminimumwageshouldtake.[…]Theinitialminimumwagewassetatamodestlevelof£3.60perhour–about40%ofmedianhourlyearnings,reflectingafeelingthatitwasbesttostartlowandevaluateitseffectsratherthanruntheriskofsettingittoohigh.”(Manning2013,p.58)

AsofApril2020, theNationalLivingWage(as isnowcalled)stoodat£8.72(€9.85)perhour,equivalenttoabout60%ofmedianearnings.Asearlyas2000,theConservativePartydroppeditsoppositiontothepolicy,whilelaterConservativegovernmentsraiseditslevelconsistently(andfasterthanaverageearnings).Inthesameyear,morethanhalfoflargeemployersrespondingtoan Ipsos Mori opinion poll came out positive about the nationalminimumwage (only a fifthopposed it). In2010, thenationalminimumwagewasvoted themost successfulpolicyof theprevious 30 years in a survey of Political Studies Association members. As for the Low PayCommissionitself,itwasthoughttobe“themostsuccessfultripartitebodyestablishedinthelastthree to fourdecades”4,praisedacross thepolitical spectrum(from theTUC toTheEconomistmagazine),andimitatedabroadfromIrelandtoGermany(LPC2019).

3.2.GermanyTheintroductionofanationalminimumwageinGermanyfromJanuary2015wasnotwhatmostobservers would have predicted if asked only a few years earlier. The obstacles seemedinsurmountable.Tostartwith,theverynotionofanationalminimumwagethatisstatutory(i.e.fixedbyParliamentthroughthelegislativeprocess)wasinconflictwiththesacredprincipleofTarifautonomie(i.e.therightof labourunionsandemployerassociationstosetwagesthroughcollectivebargainingwithoutgovernmentinterference),onwhichindustrialrelationsinGermanyhave rested since 19455. Furthermore, powerful employer lobbies rejected the idea andcampaignedvigorouslyagainstit.Finally,mostlabourunionswerealsoopposedfromthestart,andsomeremainedscepticaluntiltheend.Ontheothersideofthebarricades,supportersofanationalminimumwagenumberedmerelysomelabourunionsactiveinlow-wagesectors,atiny

4SirIanMcCartney,MinisterofStateattheDepartmentofTradeandIndustryatthetimeoftheintroductionofanationalminimumwage,speakingata‘PoliticsFirst’eventonEnsuringtheminimumforworkers(30November2017).5AsWelskopp(2012,p.171)haspointedout,“theexperienceofWeimarandNationalSocialismconvincedtheauthorsoftheGermanBasicLaw(Grundgesetz)tograntconstitutionalstatustotherighttoorganize(tobothemployeesandemployers)andtoengageinindustrialdisputesforeconomicimprovement.Article9,section3,becamethelegalfoundationoftheso-called‘collectivebargainingautonomy’(Tarifautonomie),which meant that the state only guarantees the legal framework for agreements, which employeeorganizationsandemployershavetonegotiatewithoutstateinterference”.


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minoritywithintheemployerconfederation,andcertainpersonalitiesontheinternaloppositionofthesocialdemocraticparty(SPD).

Atfirstsight,thebalanceofpowerbetweenthetwocampsappearedheavilytiltedinfavourofopponents of a national minimumwage. And yet, proponents eventually won the day. Whatdetermined this unexpected outcome was the gradual change in attitudes of key players,reinforcedby,andfeedingbackinto,shiftsinpublicopinion.

Viewschangedbecausefactsdid.ForhalfacenturyaftertheendofWorldWarII,theshareoflow-wage workers was lower in Germany than in most advanced economies. That was certainlyassociatedwithlabourunionstrength,butonlypartlyso.Afterall,theuniondensityrate(i.e.theshare ofwaged and salaried employeeswhoweremembers of a labour union)was lower inGermany(33.7%onaveragein1960-1990)thanitwasintheUK(44.7%).Nevertheless,theunioncoverage rate (i.e. the share of employees covered by collective bargaining agreements) wasconsistentlyhigherinGermany,whereitremainedstableat85%in1960-1990,thanintheUK,whereitpeakedat80%in1979,beforeitfellrapidlyto54%in1990andaslowas36%in1995(Visser2013).Theextensionoftheprovisionsofcollectiveagreementstoallemployerswhoweremembers of the associations that signed them, including those employingworkerswith littlebargainingpower,enabledGermanunionstopunchabovetheirweight.Inadditiontothat,unionsenjoyedunparalleledlegalsafeguards,includingMitbestimmung(‘co-determination’),i.e.therightofworkerstoelectrepresentativestothesupervisoryboardofdirectorsatcompanylevel6.Thatallbegantounravelsinceaboutthemid-1990s.

Fourfactorscontributedtotheriseoflow-wagework.Thefirstwasthegeneraltrendtowardsoutsourcingofproductionactivitiesonceundertakenwithinalargefirmtosmallersupplierswerewagesandstandardsweregenerallylower.

The second factorwasGermanunification (1990). In the federal statesof the formerGermanDemocraticRepublic,notonlywereworkerspaid lessonaverage than in theWest, but firmsprovedlesswillingtojoinanemployerassociationandengageincollectivebargaining:

“AfterthesuddenshockofthedeindustrialisationoftheEastGermaneconomyandtheensuingrapidriseinunemployment,manycompaniessawanopportunitytosetwagesunilaterally without negotiating with the trade unions. Certain sections of theemployers’ campwere openly preaching the benefits ofwithdrawing from collectiveagreements and supported this trend by offering membership of the employers’associationswithout a concomitant requirement to adhere to the relevant collectiveagreement.ThisnewexperienceofbeingabletoleavetheGermancollectivebargainingsystem without any major industrial disputes, while still finding favour among theemployers’associationsandsomesectionsofthepoliticalworld,wasanopeninvitationtoimitatorsthroughoutthecountry.EventhemightyIGMetall[Metalworkers’]unionwasforcedtocontendwithemployers’associationsthatsuddenlyrefusedtonegotiate,particularlyinsectorsdominatedbysmallfirms,suchasvehiclerepairsandservicing.”(Bosch2018,p.24)

The third factorwas the creation of a European SingleMarket (1993), guaranteeing the freemovementofgoods,services,capitalandlabour:

“Inthe1990s,constructionfirmsfromothermemberstatessoughtasliceofGermany’spost-unificationbuildingboom,andtheywerehighlycompetitive,astheycouldbringin

6Workerrepresentativesaccountforalmosthalfofallmembersofthesupervisoryboardofdirectorsinlarge companies (employing over 2,000 workers), and for one third in companies with 500-2,000employees.


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postedworkersfromstateswhereprevailingwagesweresignificantlylower.Rulingsbythe Court of Justice of the European Union confirmed that these firms were validlyexercising the freedomtoprovideservices in the internalmarket,and indicated thathoststatescouldinsistonlyoncompliancewithminimumwagesandworkingconditionswhichapplieduniformlyacrossthesectorinquestion.”(Mabbett2016,p.1244)

ThefourthfactorweretheHartz labourmarketreforms,introducedin2003-2005bytheSPD-Green coalition government led by Chancellor Gerhard Schröder. Notably, the level of (non-contributory) unemployment assistance benefit, paid to the long-term unemployed after theexhaustionof(contributory)unemploymentinsurance,wassetataflatrate,unrelatedtopreviousearnings,plusanadditionalrentsubsidy.Moreover,thereformsderegulatedtemporaryagencywork, and introduced ‘mini jobs’. The latter are similar to part-time jobs (in the sense that amaximumof30hoursaweekapplies),butarelesscostlytoemployers(astheyaresubjecttoalowerrateofsocialinsurancecontributions),andalsopopularwithworkers(astheyarebelowthethresholdforpersonalincometaxandemployeesocialinsurancecontributions).Whileminijobsarewidespreadinservices(suchascatering,retail,anddomesticwork),temporaryagencyworkisfavouredbymanylargeandmedium-sizedfirmsinmanufacture.Deregulationcausedthenumberofworkersemployedthroughtemporaryagenciestomorethantriple,from282,000in2003to1millionin2017(Bosch2018,p.25).

Thecombinedeffectoftheabovewasasharpriseinlow-wagework:

“Becauseoftheabsenceofastatutoryminimumwageuntil2015,payatthebottomendof the earnings distribution plunged sharply downwards, so that by 2010,when theintroductionofastatutoryminimumwagewasbeingvigorouslydebated,theaveragegapbetweenthepayoflow-wageworkersandthelow-wagethresholdwasgreaterinGermanythaninanyotherEUcountry.”(Bosch2018,pp.25-26)

Aslabourunionscametotermswiththeirimpotencetopreventlow-wagework,theirpositionvis-à-visminimumwagesbecameconsiderablymorenuanced.Whenin1999theFoodandAlliedWorkers’ Union (NGG) first proposed the introduction of a statutory minimum wage, “themanufacturingunions, […]mostofwhosememberswerestillongoodwages, […]vehementlyrejectedany legal intervention”.The creationof theUnitedServiceWorkers’Union (ver.di) in2001gavenewimpetustothefightforaminimumwage.In2002,“ver.diurgedtheestablishmentofwagefloorsintheformofcollectivelynegotiatedindustry-wideminimumwages”(Bosch2018,p.26).Thestrategyofextendingtoallworkersinagivensector(e.g.construction)thepayminimaagreedbysocialpartnersinsectoralcollectivebargainingwascompatiblewiththeprincipleofTarifautonomie,andthereforemoreacceptabletounions.Butitseffectivenesswasdubious.Eventhough the 1996 PostedWorkers Act, based on the European PostedWorkers Directive, hadenabledgovernmentstoimposeuniversalapplicationatsectorallevel,thusovercomingemployerresistance,coveragegapspersisted:

“[The Posted Workers Act’s] efficacy in establishing sectoral minimum wages hadlimitationsthatcouldnotbesurmountedbylegislation.Somelow-wagesectorshadnoGermany-wideagreementeligible forextension,whileothershadseveralagreementsmade with competing unions, including agreements of doubtful validity.” (Mabbett2016,p.1245)

In2004,SPDChairmanFranzMünteferingpointedoutthatastatutoryminimumwagewouldbean effective solution, insisting that the party would only campaign for it if the unions alsosupportedit.TheChairman’sgambitwaswidelyseenasachallengetotheunions(Mabbett2016,p.1250).UnionshadopposedtheHartzreformsonthegroundsthattheyreducedpayforlow-wageworkers,manyofwhomwerenotevenunionised.Iftheycaredaboutworkersatthemercyofemployers,nowwastheirchancetoprovetheymeantit.


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Unions were split three ways. IG-Metall, the metalworkers’ union (the largest in Germany),proposedusingtheprovisionofthe1952MinimumWorkingConditionsActthatacommitteemayinvestigatewhetheraminimumwageisrequiredwhennocollectiveagreementwasinplace.IG-Bau, the construction workers’ union (the fourth largest), favoured the extension of sectoralminimumwagesagreedbythesocialpartnersunderthe1996PostedWorkersAct.Instead,NGG,theunionofcateringworkers,andcruciallyver.di,theserviceworkers’union,therisingstarinGermany’s unionism7,metMüntefering’s challenge arguing for the introduction of a statutorynationalminimumwage.

Intherunuptothe2005parliamentaryelection,theChristianDemocrats(CDU/CSU)campaignedon a pledge tominimum conditions and pay, secured through collective bargaining sector bysector,andreinforcedbyuniversalapplication.Meanwhile,within thesocialdemocraticparty(SPD), the salience of the national minimum wage began to rise, as its introduction wasincreasinglyseenasanecessarycorrectivetothefalloutfromtheHartzreforms.The2005SPDelectionmanifestoproposed the introductionof a statutoryminimumwage ‘if social partnersfailedtoagreepayminimainallsectors’.

Atits2006conference,theTradeUnionConfederation(DGB)adoptedasimilarpositionastheSPD,ontheinitiativeofver.di,butthistimealsowiththesupportofIGMetall.(Thetwounions,with approximately 2.3 million members each, accounted for 70% of all German unions.) IGMetall’schangeofheartwaspartlyself-interestedandpartlyaltruistic.Ontheonehand,low-wagework was no longer other unions’ problem: tens of thousands of metalworkers (and unionmembers)wereactuallyemployedbysub-contractors,or suppliedby temporaryemploymentagencies.Ontheotherhand,theunionreachedoutbeyonditsmembershipbasetoyoungerandfemaleworkers, for instancecampaigningfor improvedchildcareandrepresentationofdigitalworkers.Thepolicychangeinfavourofanationalminimumwagewaspartofthatshift8.

Furthergesturesofclasssolidarityfollowed:

“[Thethirdlargest]ChemicalWorkers’Unions,whosemembersareemployedprimarilyinlargecompanies,continuedtorejecttheminimumwage,butdeclareditselfwillingtostopvoicingitsopinionpublicly,sothatinternalsolidaritywasnolongerinjeopardy.”(Bosch2018,p.27)

Bythatpoint,followingthe2005election,SPDandCDU/CSUhadformedaGroßeKoalition.Theconservative-social democratic coalition government explored possibilities for the universalapplication of wage floors at sectoral level, based on the extension of collective agreementsbetweenthesocialpartners.Tworouteswerepursued.Ontheonehand,the1996PostedWorkersActwasamended,itsscopebroadenedandproblemscausedbyconflictingcollectiveagreementssmoothedout.Ontheotherhand,the1952MinimumWorkingConditionsActwasalsoexplored,asIG-Metallhadproposed.

Nevertheless,expectationsofprogressfollowingthatapproachweresoonfrustrated:

“The hopes that the parties to collective bargaining would negotiate acceptableminimumwagesinalllow-wagesectorsundertheirownsteamwerenotfulfilled.Onlyin industries with a long tradition of national collective agreements and close

7Forabriefperiodinthemid-2000s,ver.dihadmoremembersthanevenIG-Metall,trailingcloselybehinditeversince.SeeDGB-Mitgliederzahlen2000-2009(www.dgb.de/uber-uns/dgb-heute/mitgliederzahlen).8Eitherway,itworked:againstabackgroundofcontinuoushaemorrhageintotalunionmembership,withtheunionconfederationDGBlosinganother98,000membersbetween2010and2015,IGMetallactuallygained34,000membersoverthesameperiod,reversingadecades-longtrend.Formoreinformation,seeDGB-Mitgliederzahlen2010-2019(www.dgb.de/uber-uns/dgb-heute/mitgliederzahlen).


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cooperationbetweenthesocialpartnerswereindustryminimumwagesagreed.Inthesectorswiththemostlow-wageworkers,suchasretailing,hotelsandrestaurantsandthemeatprocessingindustry,theemployersandtheirassociationsweresofragmentedthatnominimumwageagreementsevermaterialised.”(Bosch2018,pp.27-28)

In2009-2013,progresswasstalled.Followingthe2009parliamentaryelection,CDU/CSUformedagovernmentwiththefree-marketFDP.Theconservative-liberalcoalition’sMinistryofLabourcommissionedanumberofstudies,whichfailedtoprovideanyevidencethatsectoralminimumwages,someofwhichratherhigh,hadadverseemploymenteffects.Onthebasisofthat,boththeLabourMinister,aChristianDemocrat,andChancellorAngelaMerkelherself,cameoutinfavourofsectoralminimumwages(Bosch2018,p.28).The2011CDUconferencepassedamotioninsupport of minimum wages differentiated by region and industry, although it remainedambivalentaboutwhethertheywouldbestatutoryorbasedoncollectiveagreements(Mabbett2016,p.1246).

In themeantime, thecampaignof theunionsand thesocialdemocrats inoppositiongatheredsteam.Publicopinionalsoshifted:in2014,asurveybyARD-Deutschlandtrendrevealedthat90%ofrespondentssupportedanationalminimumwage.Tradeunionsthemselvesenjoyedgreaterpopularity:opinionpollsrevealedthattwiceasmanyvotersviewedthempositivelyastheydidnegatively,whileafewyearsearliertheoppositehadbeenthecase9.

Afterthe2013parliamentaryelection,anotherGroßeKoalitionwasformed.Withthefree-marketFDP,at4.8%ofthevote,failingtowinanyseats,andthesocialdemocratsbackingovernment,the way for a national minimum wage was wide open. SPD made its entry into a coalitiongovernmentwithCDU/CSUconditionalonthe immediate introductionofastatutoryminimumwage. The Christian Democrats, who had campaigned against a national minimum wage,eventuallygaveground.Forthenextfouryears,AndreaNahles,SPDGeneralSecretary,becameFederal Minister of Labour and Social Affairs, overseeing the implementation of the nationalminimumwagefromJanuary2015.

Theleveloftheminimumwagewassetat€8.50perhour,equivalenttoabout48%ofmedianearnings.SubsequentincreasesareunanimouslyproposedbytheMinimumWageCommission,madeupofsixmemberswithvotingrights(representingunionsandemployerassociationsinequalnumbers),twonon-votingexpertsfromacademia,andanindependentchairmanproposedby the social partners and appointed by the government. The practice of theMinimumWageCommissionhasbeentokeepalowprofile,followingthepacesetbycollectivebargaining,raisingthenationalminimumwagebythesamerateastheaveragepayriseagreedbysocialpartners.AsofJanuary2020,theGermanminimumwagestoodatarelativelymodest€9.35perhour,onlytheseventhlargestintheEU10.

3.3.TheUnitedStatesIntheUS,thefederalminimumwagehasnotbeenraisedsinceJuly2009,andcurrentlystandsat$7.25(€6.55)perhour,orapaltry32.7%ofmedianearningsin2018(Schulten&Lübker2020,p.123).Inflation,thoughrelativelylow,haserodeditsrealvalueby16%.In1968,atitspeakin

9Theexactfigures,reportedinMabbett(2016,p.1251),were40%vs.20%in2012,and23%vs.45%in2003.10Luxembourg(€12.38perhour),France(€10.15),theNetherlands(€10.14),theUK(raisedto€9.85inApril 2020), Ireland (€9.80), and Belgium (€9.66) all featured a higher national minimumwage thanGermany.TheremainingEUmemberstates,fromSpain(€5.76perhour)downwards,trailedatadistance.SeeSchulten&Lübker(2020,p.121).


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real terms,thefederalminimumwagehadstoodat$11.75perhouratcurrentprices(Cooper2019)11.

InNovember2013,DemocratsintheSenateproposedaMinimumWageFairnessActtoamendthe1938FairLaborStandardsAct.Thenewlawwouldgraduallyraisethefederalminimumwageto$10.10perhouroveraperiodoftwoyears.ThebillwaspassionatelysupportedbyPresidentBarack Obama, but failed to rally all Democrats in Congress, and was strongly opposed byRepublicansbothintheSenateandtheHouseofRepresentatives(wheretheyheldthemajority).

Since then, most of the action has been at state and city level. In 21 states, only the federalminimum wage applies – although in one of those states, the Commonwealth of Virginia,legislation has already been approved to raise the state minimum wage. Elsewhere, higherminimumwagesapply:

“Inthe29otherstatesandtheDistrictofColumbia,minimumwagesrangefrom$8.25(inNevada,foremployerswhodon’tprovidehealthbenefits)to$16.39(forthelargestemployers in Seattle). […] In eight of the states with higher-than-federal minimumwages,somecitiesandcountieshaveadoptedlocalminimumwagelawsthatprovideforhigherratesthanthestateminimum,accelerateschedulesforfutureincreases,orboth.Our research found46 such citiesand counties–mostof them (32) in theLosAngelesandSanFranciscoBayareasofCalifornia.”(Desilver2020)

InNewYorkCity,theminimumwageiscurrently$15perhour.

InJanuary2019,SenatorBernieSandersandRepresentativeBobbyScottproposedtheRaisetheWageAct,abillthatwouldgraduallyraisethefederalminimumwageto$15perhourby2024.Thebillwasbackedby181Democrats in theHouseofRepresentatives, includingtheSpeakerNancyPelosi,and31DemocratsintheSenate,includingMinorityLeaderChuckSchumer.InApril2019,sixcandidatesfortheDemocraticPartynominationfortheNovember2020USpresidentialelection,includingElizabethWarren,AmyKlobuchar,KamalaHarris,andBetoO’Rourke,duringaforumwithunionworkers,publiclyendorsedtheRaisetheWageAct.ThebillwasapprovedintheHouse,butdefeatedbytheRepublicanmajorityintheSenate.JoeBiden,theDemocraticPartynominee, iscurrentlycampaigningonapledge to “increase the federalminimumwageto$15acrossthecountry”and“willsupportindexingtheminimumwagetothemedianhourlywagesothatlow-wageworkers’wageskeepupwiththoseofmiddleincomeworkers”12.

3.4.HungaryInApril2000,PrimeMinisterViktorOrbán,thepopulistleaderofthenational-conservativeFidesz(HungarianCivicAlliance), announced thathisgovernmentwouldnearlydouble thestatutoryminimumwageover thenext twoyears, from25,500 forints (€98at that time)permonth to50,000forintsin2002.Asaresultofthat,theHungarianminimumwagewasraisedfromoneofthelowestintheworldtooneofthehighest.Theratiooftheminimumwagetomedianearningsincreasedfrom35%to55%(Harasztosi&Lindner2019).

Orbán’s announcement tookeveryoneby surprise, sincenopolitical partyhadmentioned theminimumwageintherunuptothe1998parliamentaryelection.Fideszlostthe2002election,butOrbánbecamePrimeMinisteragainin2010,aposthehasheldeversince.Underhisbrandof

11Cooper’sestimates(2019)havebeenupdatedtoApril2020usingthelatestConsumerPriceIndex(CPI-U)figuresprovidedbytheU.S.BureauofLaborStatistics.12FormoreinformationonJoeBiden’selectoralplatform,seehttps://joebiden.com/empowerworkers/.


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‘illiberal democracy’,Hungary (togetherwithPoland)hasbeenbackslidingon the rule of lawtowardsanovelkindofelectoralauthoritarianism(Kelemen2017).

Theincreasetotheminimumwagephased-insincetheearly2000shasnotbeenchallengedbyany major party. In 2018, its value as a proportion of the median wage stood at 51.8%.Nevertheless, in nominal terms, at €2.85 per hour in 2020, the Hungarian minimum wageremainedoneofthelowestintheEU(Schulten&Lübker2020,pp.121-123).

3.5.GreeceReductions to the value of theminimumwage, thoughnot unusual in real terms (when theirpurchasingpoweriserodedbyinflation),areratherrareinnominalterms.Theonlyexceptionknowntothisauthoristhe3%reductionofthenationalminimumwageintheNetherlandsin1984(Salverda2008,p.23).Incontrast,undertheprovisionsofGreece’seconomicadjustmentprogramme,inadesperatebidtoarresttheriseinjoblessness(23.2%atthetime),thenationalminimumwagebecamestatutoryinFebruary2012,anditsvaluewascutfrom€740to€586permonth(i.e.by22%innominalterms),whileasub-minimumwagewasintroducedforworkersagedbelow25(at€511permonth).

Thenationalgovernment,atthetimeaconservative-socialistcoalition,ledbyLucasPapademos(formerlyVicePresidentoftheEuropeanCentralBankandGovernoroftheBankofGreece)wasdistinctlylackinginenthusiasmforthechange,whichwasneverthelesspushedthroughontheinsistenceofthe ‘Troika’ofthecountry’s lenders(theECB,theEuropeanCommission,andtheInternationalMonetaryFund).Thesocialpartners,hithertoresponsibleforsettingthenationalminimumwagethroughcollectivebargaining,werenotevenconsulted(Matsaganis2012,p.418).

Subsequentlegislationprovidedthatthegovernmentwasresponsibleforchangestothenationalminimumwageafterconsultationwiththesocialpartnersandarecommendationbyacommitteeofindependentexperts,butthatprocedurewouldnotbeactivatedbeforethecountryexitedtheeconomic adjustment programme, and in any case not before January 2017. As it turned out,Greece exited the last of the economic adjustment programmes (the third) in August 2018.Consultationswith the social partners and others began in September 2018, the independentexperts’committeesubmitteditsreportbytheendoftheyear,andthedecisiontoincreasethenationalminimumwagewastakeninJanuary2019,effectivefromFebruary2019.

The independent experts’ committee, having reviewed this evidence and the internationalliteratureontheeffectsoftheminimumwageonemployment,earnings,andfirms’labourcosts,recommendedthattheminimumwageberaisedbybetween5%and10%,andtheyouthsub-minimumbeterminated(KEPE2018).Thegovernmentofthetime,acoalitionoftheradicalleftwiththenationalistrightasjuniorpartner,ledbyAlexisTsipras,optedforanationalminimumwageat€650permonth13forallworkers,equivalenttoariseof11%(27%forthosebelowtheageof25).

IntherunuptotheparliamentaryelectionofJuly2019,KyriakosMitsotakis,the(liberal)leaderoftheconservativepartypledgedthatfutureincreasestotheminimumwagewouldbetwicetherateofGDPgrowth.Headdedthatthelevelofthenationalminimumwagewouldberaisedto€750“withintwoyears”.Aftertheelection,fromwhichtheconservativesemergedvictorious,the

13 Confusingly, since theminimumwage is payable14 times a year, international comparisons cite thehigherfigureof€758permonth(650multipliedby14dividedby12equals758).Inhourlyterms,itstoodat€3.76in2020.Asaproportionofmedianearnings,itstoodat47.5%in2018(Schulten&Lübker2020,pp.121-123),thoughitwasexpectedtorisetoover52%aftertheFebruary2019increase.


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MinisterofLabourconfirmedthegovernmenthopedtoraisethenationalminimumwagefrom2020onwards.

3.6.TheEuropeanUnionIn January 2020, the European Commission published a consultation document on legislativeactiontoestablishfairminimumwagesinEurope(EC2020).Inherlettertothesocialpartners,CommissionPresidentUrsulavonderLeyenexplainedshesought“alegalinstrumenttoensurethateveryworkerinourUnionhasafairwage”,underliningthat“minimumwagesshouldbesetaccording to national traditions, through collective agreements or legal provisions”. She alsoreferredtoPrinciple6oftheEuropeanPillarofSocialRights(jointlydeclaredbytheEuropeanParliament,theCounciloftheEuropeanUnionandtheEuropeanCommissioninNovember2017):

“Adequateminimumwagesshallbeensuredinawaythatprovideforthesatisfactionoftheneedsoftheworkerandhis/herfamilyinthelightofnationaleconomicandsocialconditions,whilstsafeguardingaccesstoemploymentandincentivestoseekwork.In-workpovertyshallbeprevented.”EPSR(2017,p.15)

Onthesameday,NicolasSchmit,EuropeanCommissionerforJobsandSocialRights,launchedthefirstphaseofaconsultationprocessforthisinstrument,askingsocialpartnerstoexpresstheirviews on the need for action at the EU level and indicate whether they are willing to enternegotiationsornot.Amoreconcreteproposalonthescopeandshapeofthislegalinstrument,initiatingthesecondconsultationphase,istofollowsoon.

TheCommission’sinitiativesignifiedabreakwithpreviouspolicy.DuringtheEurozonecrisisoftheearly2010s,theTroika(towhichtheEuropeanCommissionerwasaparty)hadinsistedthattheminimumwageshouldbefrozen(inPortugalandinIreland)orevencut(inGreece)inordertoimprovecompetitiveness.Inasimilarvein:

“[The]country-specificrecommendationsforcountrieswithcomparativelyhighrelativelevels of minimum wages, such as France and Portugal, have until most recentlyrepeatedlycontainedprovisionsdesignedtoensurethatminimumwagedevelopmentsdonotharmcompetitiveness.”(Müller&Schulten2020,p.1).

BusinessEurope, theEU-wideemployers’confederation, indicatedthat there isroomtodiscussEuropeancoordinationofminimumwages,specifyingthatthisshouldbedoneviaalreadyexistinginstruments(suchastheEuropeanSemester),ratherthanbyimposingstrictrulesonmemberstates.Onitspart,theEuropeanTradeUnionConfederationrespondedpositively,confirmingthatitis,inprinciple,opentocommencingnegotiationswithemployers.However,tradeunions(andtheir national governments) in Sweden and Denmark, two of the four member states wherenationalminimumwagesdonotexist14,andpayminimaaresetbysectoralcollectiveagreements,rejectedtheCommission’s initiative.OpponentstoanationalminimumwageamongEuropeantradeunionsarguethat“legallybindingrequirementswouldsignificantlydistortthequalityandefficiency of their social dialogue, could include a target that is too low orwould reduce theincentives for bothworkers and employers to pursue social dialogue” (Dhéret&Palimariciuc2020,p.6).

Diversityinnationalwage-settingmechanismsispartofthedifficulty.Apartfromthememberstatesmentionedabovewhereanationalminimumwagedoesnotexist,inanothertwo(Austriaand Finland) minimum wages are set by national agreements between trade unions and

14Theothertwo,CyprusandItaly,werelessnegativeastheyhavealreadybegunconsultationswithaviewtoestablishinganationalminimumwage.


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employers,whileinafurthertwo(BelgiumandEstonia)theyaresetbycollectiveagreementsandthenextendedandmadebindingbylaworministerialdecree.Intheremaining19memberstates,nationalminimumwagesarestatutory,i.e.setbythegovernment,followingconsultationwiththesocialpartnersornot,accordingtoafixedindexationruleornot.

4.ConcludingremarksWhatarethelessonsfrominternationalexperience(and,indirectly,theimplicationsforItaly)?

Tostartwith,nationalpathwaystowardsestablishinganationalminimumwagearesteepedinthe specific circumstances of each country. The policy solutions adopted have historicallydependedontheparticularnatureoftheproblem,ofteninheritedorleftunresolvedbypreviouspolicysolutions, introducedtoaddressotherproblems.Thereexistnooff-the-shelfrecipesforpolicymakerstoapplyintheirownsetting.Lessonsfromabroadareusefulasfoodforthought,from which to draw inspiration and upon which to reflect, not as passe-partout to useunthinkingly.

Havingsaidthat,thenationalhistoriesoftheminimumwagepresentedheredorevealstrikingsimilarities. Both in the UK and Germany, employer associations were hostile, conservativepoliticiansopposed,andunionfederationssuspicious(oroutrightnegative).Supportersoftheminimumwagewerefewandfarbetween,tobefoundinprogressivethink-tanks,labourunionsin low-wagesectors,andsmallenclaveswithinthepoliticalLeft.Countriesstumbledupontheminimumwageafterkeysocialandpoliticalactorsrecognisedthatin-workpovertywasaseriousproblem,andallothersolutionstodealwithitprovedineffective.Nevertheless,onceanationalminimumwagewas inplace, it soonceased tobeacontested issue:as fearssubsided, formeropponentswholeheartedlyembracedit,orgrudginglyresignedtoit,andmovedon.

Amongthefearsthatprovedunfounded,theprospectofmassivejoblossesfeaturedprominent.Itsoonbecameclearthattheintroductionofanationalminimumwage,andsubsequentincreasestoitsrealvalue,failedto“killmillionsofjobs”,asbusinesslobbiesandconservativeeconomistshadpredicted.On the contrary, betterpay allowed firms to retainworkers (thereby reducinghiringcosts),whilehigherwagecostsprovidedemployerswithan incentiveto invest inworkorganisationandworkers’skills(therebyraisingproductivity).

Similarly,theexistenceofanationalminimumwagedidnotremoveworkers’motivationtojoinaunion,didnotundercutcollectivebargaining,anddidnotcausewagestoconvergedownwardstowardstheminimum,asunionshadfeared.Onthecontrary,bycampaigningforbetterpayandconditionsof low-wageworkers,manyofwhomwerenoteven theirmembers,unionsgavealessonofclasssolidarity.Eventhoughthatwaslargelydisinterested,itdidbringmaterialbenefitstounions:theirpublicimageimprovedbothamongworkersandamongcitizensatlarge,theirprestige andmoral standing rose, their haemorrhage in terms ofmembership halted or evenreversed.

Theevidenceshowsthatminimumwagehas improvedpayforhundredsofthousandsof low-wageworkers,andhasreducedearningsinequalities(Manning2013,Brutteletal.2018).Ontheotherhand,someofthehopesassociatedwiththeintroductionofanationalminimumwagewerenotfulfilled,norcouldtheyhave.Manyoftheindividualslivinginpovertyarenolongerofworkingage,oraremembersofhouseholdswith‘lowworkintensity’,orworkas(formally)self-employed.


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In view of that, no minimum wage can improve the living standards of the elderly, of theunemployed,oftheunder-employed,offreelancers,ofgigworkers15.

Finally,asregardspoliticalactors, inboththeUKandGermany(and,evenmoreso, intheUS)policypreferencesvis-à-vistheminimumwagetendtofallneatlyalongtheLeft-Rightaxis,withprogressives supporting the introductionof, andsubsequent rises to, theminimumwage,andconservativesopposingit(atleastinitially).Nevertheless,asthecaseofHungarydemonstrates,deviation fromthispatternarealsopossible.National-populistson theauthoritarianrightareperfectlycapableofrecognisingtheminimumwageasasalientissuewithsymbolicpotential:aneasywaytoscoreapointagainstlabourunions,leftparties,and‘cosmopolitanelitesindifferenttotheplightofordinarypeople’whomtheyaspiretorepresent.

Progressiveswoulddowelltotakenote.

15Note,however,thatcallshavebeenmadetotreatgigworkersasemployeesasregardsbasiclabourrights(e.g. sickness and maternity leave), including minimum pay. In the UK, the Taylor Review of modernworkingpracticeshasproposedtheextensionofthenationalminimumwagetothoseworkinginthegigeconomy.Apparently,theinstitutionalmechanismfordoingsoisalreadythere:“Governmentshouldadaptthepiecerateslegislation[…],asisalreadythecaseforsomeoccupationswhereitisnotpossiblefortheemployertodeterminehoursworked”(TheTaylorReview2017,pp.37-38).InItaly,Boerietal.(2018)havesuggestedthatplatformsshouldpaygigworkers,suchasthosemakingfooddeliveries,nolessthananhourlyminimumwage(andpostpayinformationonline).


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manos matsaganis (politecnico di milano

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