Sylvain Hoffmann, Director of the Chamber of Employees (CSL), explained that relations with the outgoing Labour Minister Georges Mischo had been difficult, saying representatives of working people had been far from satisfied with him, to put it mildly.
As a result, the CSL had issued a string of negative opinions on draft laws in recent months. With Marc Spautz now taking over the ministry, Hoffmann said the CSL hoped for a social dialogue on equal footing and for long-awaited projects, such as the minimum wage directive and the platform work directive, to finally move forward.
Hoffmann welcomed the fact that the new national anti-poverty plan had at last been published, noting that the CSL had been calling for such a strategy for many years. The 106 planned measures, he said, showed the scale of the need, and the EU Commission had repeatedly criticised Luxembourg’s shortcomings in social policy.
He praised the increase in child benefit by roughly 15% (€45) a month for younger children and €60 for older ones; but, argued that the government could have brought the measure forward from 2027 to 2026, given its importance. He stressed that social inequalities among children were a major driver of educational inequalities later in life.
Hoffmann regretted that the section of the plan relating to employment, which he described as absolutely central to tackling poverty, was weak. He insisted that Luxembourg must transpose the EU minimum wage directive, pointing out that the country has the highest rate of “working poor” in Europe.
According to Hoffman, low-income parents inevitably create low-income conditions for their children, and raising the minimum wage would directly benefit young people too. He noted that the minimum wage currently sits below the at-risk-of-poverty threshold, below the National Institute for Statistics and Economic Studies (STATEC) reference budget and below EU recommendations, and therefore “urgently” needs to be increased.
He also criticised attempts, such as those argued by former Labour Minister Mischo, to downplay the issue with alternative calculation methods.
The plan includes a measure specifically targeting households containing someone aged 65 or over or already retired, but Hoffmann said the CSL would have preferred a straightforward increase in the minimum pension.
He argued that it was unreasonable for someone who had worked for 40 years to end up at risk of poverty in retirement. Hoffmann said that raising the minimum pension would particularly benefit women, who still tend to have much lower pensions and are over-represented among those receiving the minimum rate. He added that a higher minimum pension would also have helped cross-border workers, whereas the current measure applies only to residents.
Hoffmann also said he had expected more concrete measures in the area of housing. While administrative simplification was welcome, he argued that the plan failed to tackle structural issues.
Affordable housing remained insufficient, and the budget contained little to change that, he said. He criticised the lack of measures against speculation and the absence of incentives to bring land onto the market. He acknowledged that projects were in the pipeline, but urged action against empty plots and vacant homes. Rents, he added, had soared in recent years, and the plan provided no concrete tools to address this.
Finally, Hoffmann stressed that discussions about poverty must include discussions about wealth, which he says the plan does not address. He pointed to several options, such as higher taxation of top incomes under the forthcoming single tax scale, and increased taxation of capital gains, which are often lightly taxed, or not taxed at all. in Luxembourg compared with wages.
He argues that Luxembourg should consider taxing wealth, whether through inheritance tax, or a form of wealth tax, saying the country is “extremely weak” on this front and concludes that the OECD also pointed this out.
