Fair wage and minimum wage, what is the difference?

For the opposition, albeit with distinctions, the wage issue in Italy would be improved by the introduction of a legal minimum wage, i.e. a minimum wage set by law below which one cannot fall. For the government, on the other hand, one way to raise wages is through the so-called fair wage, which peeped into our legal system with the 1 May decree. Let us try to clarify, beyond the political controversy.

Let us start with the novelty. Article 7 of the Meloni government's decree, which started its parliamentary process in the Chamber of Deputies, established that the employee's total economic treatment cannot be lower than that defined by the national collective agreements entered into by the employers' and workers' organisations that are comparatively more representative at national level. In order to apply this parameter, reference is made, for the purpose of identifying the aforementioned comparatively most representative organisations, to the reference production sector and category, in relation to the main or prevailing activity exercised by the employer and to the size and legal nature of the latter, and, for sectors not covered by collective bargaining, to the sector (covered by a collective agreement) most closely connected to the activity actually exercised by the employer, taking into account the size and legal nature of the latter. Not only that. It is also provided that access to the benefits provided for by the Decree of 1 May is subject to the condition that the remuneration paid is not less than that determined on the basis of the above criteria.

In other words, according to the government, it is collective bargaining that constitutes the instrument for determining fair wages and it is always it that must ensure that workers receive an overall economic treatment appropriate to the quantity and quality of work performed. As explained by the Minister of Labour, Marina Calderone, in our newspaper, 'the just wage introduces a different perspective than the simple minimum wage. It does not only look at the hourly wage, but at the overall quality of the economic and regulatory treatment constructed by collective bargaining: thirteenth month, fourteenth month, severance pay, contractual welfare, leave, bilaterality and training. The fair wage enhances the quality of bargaining, recognising the role and quality of industrial relations'.

Well, having clarified what the just wage is (or rather, what it would like to be), let us see what the differences are with the minimum wage. The starting point is that the legal issue (and the ensuing trade union-political controversy) stems from the fact that in our legal system there is no minimum level of remuneration fixed by law, but Article 36 of the Constitution recognises the right of the worker to a remuneration proportionate to the quantity and quality of his work and in any case sufficient to ensure a free and dignified existence for himself and his family. Then came an EU directive on the introduction of an adequate minimum wage for workers.

The minimum wage may be set by law (legal minimum wage), by national collective bargaining, or by a combination of the legal source and collective bargaining. Currently, the minimum wage exists in all EU Member States: in 21 countries there are legal minimum wages, while in six Member States (Denmark, Italia, Cyprus, Austria, Finland and Sweden) minimum wage protection is provided exclusively by collective agreements. The all-Italian debate also revolves around other issues, such as the level of the minimum wage, the procedures and criteria to be established for the periodic adjustment of the minimum wage and the involvement of trade unions and employers' organisations in setting the minimum wage. We have not introduced a statutory minimum wage precisely because of the very broad coverage of collective bargaining (Cnel data).