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East-west divide in EU minimum wage

Minimum wages vary widely from country to country in the European Union, with a sharp divide between Eastern and Western European members, the EU's statistics bureau Eurostat said Monday.

In January 2007, 20 of the 27 member states of the EU had national legislation setting statutory minimum wages. Luxembourg required employers to pay the highest minimum wage, €1,570 ($2,100) per month, while the lowest minimum wage was in Bulgaria, at €92 euros ($123).

When adjusted to take into account differences in purchasing power, the disparities between the Member States are reduced from a range of one to seventeen (in euro), to a range of one to seven (in PPS2) with Luxembourg (1 503 PPS/month) the highest and Romania (204 PPS) the lowest. It should be noted, that the proportion of employees receiving the minimum wage also differs greatly between Member States, ranging from less than 1% in Spain to 17% in France.

Looking at the level of the minimum wage in euro, Member States fell into three broad groups. In Bulgaria (€92/month), Romania (€114), Latvia (€172), Lithuania (€174), Slovakia (€217), Estonia (€230), Poland (€246), Hungary (€258) and the Czech Republic (€288), minimum wages were below €300 per month in January 2007.
Portugal (€470), Slovenia (€522), Malta (€585), Spain (€666) and Greece (€668 in July 2006) fell into a second group, with minimum wages of between €400 and €700 per month.
In France (€1 254), Belgium (€1 259), the Netherlands (€1 301), the UK (€1 361), Ireland (€1 403) and Luxembourg (€1 570) minimum wages were over €1 200 per month.

The Irish hourly minimum wage rose to €8.30/hour with effect from 1 January 2007 and will rise to €8.65 with effect from 1 July, 2007. The 12-month rise will amount to 13%. For comparison, the federal minimum wage in the USA was €676 per month in January 2007.

Proportion of employees receiving minimum wages ranged from 1% in Spain to 17% in France. The proportion of employees on minimum wages in 2005 was 2% or less in Spain (0.8%), Malta (1.5%), Slovakia (1.7%), the UK (1.8%) and the Czech Republic (2.0%) and more than 10% in France (16.8%), Bulgaria (16.0%), Latvia (12.0%), Luxembourg (11.0%) and Lithuania (10.3%). In the USA, 1.3% of employees received the federal minimum wage.

In 2005 and among the Member States for which these data are available, minimum wages represented between a third of the average monthly gross earnings in industry and services in Estonia, Romania, Latvia, Poland and Slovakia and a half in Ireland, Luxembourg, Malta and Bulgaria.
In the USA the federal minimum wage corresponded to 32% of the average monthly gross earnings. (