Showing posts with label Salaries. Show all posts
Showing posts with label Salaries. Show all posts
Saturday, August 10, 2013
Minimum wages in Europe
The Wirtschafts- und Sozialwissenschaftliches Institut of the Hans Böckler Foundation published its 2013 report on minimum wages. 21 of the 28 member states of the EU have them set by law (in Germany no general minimum wage exists, it is set only in some professions).
The report compares the hourly minimum wages of EU and also third countries. Of course an average would not make sense (even when the number of people earning minimum wage would be known and used for weighting. Comparison and developments are worth looking at, however. 12 EU member states increased the minimum wage the 1st January 2013 (and two others late 2012) while Greece cut it by 23 percent. Portugal, Ireland, Romania and the Czech Republic froze their minimum wage. In Western Europe is the hourly minimum wage between 8.65 and 10.83 Euro, while in the Mediterranean countries between 3 and 4.06 Euro. Eastern European countries are the only ones paying below 2 Euro, while Slovenia is higher than the Mediterranean bunch, with 4.53. The lowest is the minimum earning in the two countries joining in 2007 (the newest member, Croatia has no minimum wage set) and in the three Baltic countries. Hungary precedes Slovakia and the Czech republic, just below 2 EUR (1.95 in Hungary, 1.94 in Slovakia and 1.91 in the Czech Republic.
Of course the comparison has to be adjusted to purchasing power parity. Hungary's price level is 61.9 percent of the EU in 2012 (compared to 74.6 of the Czech Republic and 71.6 of Slovakia (see: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00120). This will give 3.15 EUR in PPP for Hungary, while 2.60 for Slovakia and 2.67 for the Czech Republic, i.e. the Hungarian real minimum wage is higher. It is said by many economists and apparently data show that they are right, that increasing it in Hungary is not a good idea.
In other cases, the order did not change by using purchasing power parities. It is worth mentioning Greece: 3.60 EUR compared to 3,36 in Portugal. but lower than Spain (4.09). So despite the strong cut in Greece, and that it fell behind Malta and Spain with this cut, it is still within the range of similar countries.
The foundation also keeps a Database of minimum wages.
Another interesting page summarising information and opinions about the minimum wage.
Saturday, February 2, 2013
Salaries of officials
The fight around the EU budget and the salaries of eurocrats continues. It has yielded some very interesting side-branches.
A huge proportion of the EU budget is going back to the member states, although not to those who pay them in (The Guardian tried to set up a flowchart showing where the money goes but of course the euros (and pounds and kronas) are not earmarked. However, there are net payers (the richer countries) ant net recipients (who actually spend a significant part of the money received in the richer states), as one aim of the EU is to equalise the level of development in its members - out of solidarity but also out of plain self-interest. No one of the states will openly tell another one "I do not want to pay for you" although citizens and some journalists - in particular in the context of the debt crisis - do say things like that.
So what remains is the administration. Without echoing the allegations of the staff unions who see an intention to weaken the European public service, and without denying that efficiencies can be gained (where can't they?), this endeavour is not well placed in the eyes of an impartial observer (which I am not). The 2004 reform brought huge savings and the Commission is now proposing a further cut of 5% in staff numbers (and to reallocate staff internally to fulfil new tasks coming from accession, the economic governance package and a number of other projects aiming at competitiveness for Europe, research, etc.) as part of a wider package to cut other benefits of the officials (which are fixed in a regulation voted by the Council and the European Parliament). Negotiations on this proposal stalled as the member states did not accept the proposals. The EU budget is about 1.3% of the total GDP of Europe and administration is less than 6% within this. So big savings cannot be expected.
Salaries of eurocrats seem to be a stumbling block. In 2004, a special levy (starting at 2.5% and increasing every year till 5.5%/ was introduced on top of the taxes and social security contributions paid by the officials. This was tied to a method of calculating the annual salary adjustments. This method tied the increase of the salaries to the increase of salaries of public servants in the richer member states (to avoid that the increases in the member states due to higher inflation and the catch-up effect, as salaries there were lower than in Western Europe, should result in a higher increase). Of course the data have first to be available and so the changes take effect a year later. So after the crisis, there was still one year where the salary increase fell out higher than the member states thought justified (surprisingly, not in 2008 but in 2009) and then the member states did not want to apply the algorithm, referring to an exception clause in the regulation, for the case of an unexpected and serious crisis. The Court of Justice later found that that year the crisis was not sudden and not severe enough in its consequences to justify the application of the exception clause. The year after the cut in national public salaries had its effect on the calculation and the 0.1% increase was approved by the member states. The year after, they refused to apply the method again, and similarly in 2012.
Meanwhile, the method of salary adjustment and the special levy expired (they were tied to each other). The Commission proposed to extend these two elements of the staff regulations for another year, independently from the status of the negotiations on the budget and the Staff Regulations. The Council refused that which meant that the special levy (which gradually increased to 5.5%) also expired and all officials of the European institutions got a salary increase of about 5.5%. This was pinpointed in a number of articles in the press. One of them got a surprising reaction from a European Official who stated that he/she is a secretary and earns 700 euros a month. As the salary table of the officials is public, it is easy to establish that this means at least a grade 8 official. Given that secretaries start at grade 1 and the average time to jump a grade is 3-5 years (in reality, it can be longer), this means that this person works in the EU since 20-30 years and is still a secretary. Draw your own conclusion. If you want to see the Staff Regulations, you can find it here
By the way when member states - and in particular David Cameron, outraged about EU salaries compared to his own - complain about 1-2% of salary increases and "perks" of EU officials, Commonwealth officials received a 3.8% salary increase and have much more sumptuous perks - but this is Britain's favourite child, as opposed to the EU.
So what remains is the administration. Without echoing the allegations of the staff unions who see an intention to weaken the European public service, and without denying that efficiencies can be gained (where can't they?), this endeavour is not well placed in the eyes of an impartial observer (which I am not). The 2004 reform brought huge savings and the Commission is now proposing a further cut of 5% in staff numbers (and to reallocate staff internally to fulfil new tasks coming from accession, the economic governance package and a number of other projects aiming at competitiveness for Europe, research, etc.) as part of a wider package to cut other benefits of the officials (which are fixed in a regulation voted by the Council and the European Parliament). Negotiations on this proposal stalled as the member states did not accept the proposals. The EU budget is about 1.3% of the total GDP of Europe and administration is less than 6% within this. So big savings cannot be expected.
Salaries of eurocrats seem to be a stumbling block. In 2004, a special levy (starting at 2.5% and increasing every year till 5.5%/ was introduced on top of the taxes and social security contributions paid by the officials. This was tied to a method of calculating the annual salary adjustments. This method tied the increase of the salaries to the increase of salaries of public servants in the richer member states (to avoid that the increases in the member states due to higher inflation and the catch-up effect, as salaries there were lower than in Western Europe, should result in a higher increase). Of course the data have first to be available and so the changes take effect a year later. So after the crisis, there was still one year where the salary increase fell out higher than the member states thought justified (surprisingly, not in 2008 but in 2009) and then the member states did not want to apply the algorithm, referring to an exception clause in the regulation, for the case of an unexpected and serious crisis. The Court of Justice later found that that year the crisis was not sudden and not severe enough in its consequences to justify the application of the exception clause. The year after the cut in national public salaries had its effect on the calculation and the 0.1% increase was approved by the member states. The year after, they refused to apply the method again, and similarly in 2012.
Meanwhile, the method of salary adjustment and the special levy expired (they were tied to each other). The Commission proposed to extend these two elements of the staff regulations for another year, independently from the status of the negotiations on the budget and the Staff Regulations. The Council refused that which meant that the special levy (which gradually increased to 5.5%) also expired and all officials of the European institutions got a salary increase of about 5.5%. This was pinpointed in a number of articles in the press. One of them got a surprising reaction from a European Official who stated that he/she is a secretary and earns 700 euros a month. As the salary table of the officials is public, it is easy to establish that this means at least a grade 8 official. Given that secretaries start at grade 1 and the average time to jump a grade is 3-5 years (in reality, it can be longer), this means that this person works in the EU since 20-30 years and is still a secretary. Draw your own conclusion. If you want to see the Staff Regulations, you can find it here
By the way when member states - and in particular David Cameron, outraged about EU salaries compared to his own - complain about 1-2% of salary increases and "perks" of EU officials, Commonwealth officials received a 3.8% salary increase and have much more sumptuous perks - but this is Britain's favourite child, as opposed to the EU.
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