Al Jazeera America’s Ned Resnikoff reports on the tension between the EU institution of posted workers–workers sent from one, low-wage, country to work in a high-wage country at the wages of the native countries–and the Nordic welfare state.
“The question is under what circumstances the services offered by a Latvian, Polish or German firm should be sold in Denmark and Sweden,” Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, told Al Jazeera. “There’s an ongoing struggle over whether they should be able to offer those services paying Polish or Latvian wages.”
The struggle concerns a particular category of workers, defined as “posted workers” under EU law. A posted worker is “sent by his employer on a temporary basis to carry out his work in another Member State” according to a fact sheet on the European Commission website.
Under the Posting of Workers Directive, approved by the European Parliament in 1996, workers who are posted to a particular member state get to enjoy that state’s labor protections. A Polish worker posted to Denmark must be paid Denmark’s minimum wage or more.
The problem is that Denmark doesn’t have a minimum wage, at least not legally speaking — nor does Sweden. (Norway, the third of three Scandinavian countries also does not have a legal minimum wage but it is not a member of the European Union.)
Instead of legislating their minimum wages, the Scandinavian countries have their unions bargain for them. Sweden and Denmark may not have minimum wage laws, but they do have effective wage minimums, defined by the collective bargaining agreements their unions negotiate.