On Tuesday, Minister of Labour Marc Spautz, Minister of Social Security Martine Deprez, and Minister of the Economy Lex Delles are meeting with social partners to discuss the minimum wage. Employers held their talks in the morning, while trade unions are scheduled for the afternoon.
The trade unions have been calling for a structural adjustment for some time, while employers argue that a minimum wage increase would be unsustainable.
The minimum wage has recently returned to the forefront of discussions. An EU directive stipulates, among other requirements, that the minimum wage should stand at 60% of the median salary or 50% of the average salary. According to the OECD, Luxembourg’s minimum wage in 2023 was at 57% of median income and 45% of the average. Additionally, the rising cost of living has kept the issue of a minimum wage increase on the agenda for some time.
As of March 2022, approximately 65,000 people earned the minimum wage, whether skilled or unskilled. The unskilled minimum wage currently stands at around €2,700, while the skilled minimum wage is €3,240.
These figures are not fixed, however. The minimum wage is regularly adjusted through two separate mechanisms. First, wage indexation automatically raises wages. Second, a legally mandated minimum wage adjustment takes place every two years, regardless of how the economy or other wages develop.
In an interview with the Luxemburger Wort last Saturday, Minister of Labour Marc Spautz confirmed that calculations by the General Inspectorate of Social Security (IGSS) forecast an increase of 3.8% effective 1 January 2027.
For the trade unions, the automatic adaptations are not sufficient. They are calling for a structural adjustment of the minimum wage. According to their calculations, the unskilled minimum wage would need to be raised by 12.7%, equivalent to approximately €300 per month – well above the adjustments already planned through indexation or the statutory two-year review.
The newspaper Lëtzebuerger Land reported that the government parties have accepted the statutory minimum wage increase of 3.8% and assume that this will meet the threshold set by the EU directive. At a press conference last Friday, however, the trade unions dismissed this approach as unserious, arguing that it would not be enough. According to the unions, the current minimum wage is insufficient to afford a decent life in Luxembourg. They noted that it does not cover the reference budget calculated by the National Institute of Statistics and Economic Studies (STATEC), a shortfall reflected in the rising number of working poor, i.e., people who remain at risk of poverty despite being employed.
Following the talks on Tuesday morning, Michel Reckinger, president of the Luxembourg Employers’ Association (UEL), told RTL that a minimum wage increase would not be sustainable. Instead, employers would prefer direct aid to support those facing financial hardship.
Reckinger pointed out that sectors such as the skilled trades and hospitality are already struggling. Two weeks ago, the Federation of Craftspeople went as far as calling for the abolition of the skilled minimum wage – a proposal quickly dismissed by Labour Minister Spautz.
Reckinger explained that during Tuesday’s meeting, the UEL and the government discussed the criteria by which minimum wage adjustments should be calculated. These criteria, in line with the EU directive, are intended to evaluate the economic situation of the country, businesses, and individuals. The social partners are expected to review these evaluations in a tripartite meeting and determine an adjustment accordingly.
