Challenging the EU Downward Pressure on National Wage Policy

In-work poverty has increasingly become a problem of major concern for many EU Member States. In the opinion of many, a common European wage standard could represent a desirable and effective solution. However, Article 153(5) TFEU excludes the EU from competence on “pay,” preventing EU institutions from taking any binding action to that end, while attempts to address the issue by soft law or by coordinated wage bargaining have proven to be weak and ineffective. Even so, the exclusion of EU institutions from exercising competence in the area of “pay” has not prevented them from acting within the present framework of European economic governance so as to issue recommendations aimed at cutting or freezing national minimum wages and public-sector wages or keeping their growth in check (wage moderation). The article thus considers whether there is room for challenging the EU encroachment on national wage policies as a way to restore to national governments and social partners the freedom to address the question of wages according to their own best judgment