*Update 01.09.2023: the social minimum wage for Luxembourg is now 3085.11 EUR gross (or 2570.93 EUR for unskilled workers).**Update: see our June article on the good example being set by the Parliament.* Original article: Many colleagues struggle today with the high level of inflation and the increased costs of living. But already before the current economic crisis, the situation was difficult for colleagues in Luxembourg with a low salary. While money can’t buy happiness, it does certainly help: Luxembourg’s levels of happiness have also fallen. Luxembourg has the highest minimum wage in Europe, with a minimum of 2 936.48 EUR for qualified workers (as of 1 February 2023 – the corresponding inflation index has a value of 898.93 points and 100 points equal an amount of 326.66 EUR). It goes without saying that with such a high minimum wage, the cost of living in Luxembourg is also extremely high. Indeed, Eurostat calculates that a hypothetical correction coefficient for Luxembourg would reach a value of 124.8 (table on page 13), placing it among the top 5 correction coefficients in the EU [1].

It is against this backdrop that one must look at the salaries of our colleagues at the bottom end of the salary grid. Indeed, some colleagues in Luxembourg earn less than the national minimum wage – which forced the Commission to pay them an extra allowance, so that these colleagues earn at least the minimum wage. However, in doing so, the Commission considers that the expatriation allowance (16%) forms part of the salary. With a minimum amount of more than 620 EUR for this allowance (Article 69 staff regulations), this inclusion makes a substantial difference and renders many colleagues ineligible for the extra allowance.

In a recent meeting of the Staff Committee of the European Parliament, Mr. Alessandro CHIOCCHETTI, Secretary-General of the European Parliament, considered that the inclusion of the expatriation allowance and the foreign-residence allowance (4%) for the calculation of the minimum wage should be revised, meaning that these allowances should be excluded from the calculation of the minimum wage.

Generation 2004 has sent a note to DG HR, asking that the Commission follow up and exclude the expatriation allowance for the calculation of the minimum wage. This would benefit the colleagues at the bottom of the salary grid and be a true social measure, with limited budget impact. Generation 2004 finds it rather embarrassing that the European Commission needs to introduce an extra allowance so that it pays at least the minimum wage to colleagues who can work in several languages and often have moved across Europe to help build the European project. We therefore urge the Commission to adapt this measure.

As we said before, maybe we should change the slogan ‘Luxembourg – a great place to work’ into ‘Luxembourg – where we will help you to apply for social aids because we cannot be bothered to pay you a decent salary’. Admittedly, this slogan doesn’t have the same ring to it, but at least it’s an honest statement.

In any case, we will keep you posted and as always, we appreciate your feedback.

If you appreciate our work, please consider becoming a member of Generation 2004.

[1] In October 2022  Eurostat stated that NATO and EFTA use a correction coefficient of 124.6 for Luxembourg p.6). We continue to advocate for a housing allowance, as do the Heads of Administration (Chefs d’Administration) of EU institutions and bodies based in Luxembourg (CALux). A 25% boost in salary to the lowest paid might still leave them unable to afford accommodation within a reasonable commuting distance.

We remind you that the winners of our Wild West of Teleworking competition (May 2021) were from Luxembourg. Some examples gathered at that time were:

• a Contract Agent (CA) colleague (FGII) spending >44% of take-home pay on the cheapest flat available after moving from a flat share (Luxembourg)
• another colleague not being considered for a rental property (again in Luxembourg) because take-home pay (AST3) is not even close to the 3 x (rent + charges) increasingly insisted upon by landlords.

Also, check out cost-of-living benefit and the energy allowance.