Towards a European Theory of Justice and Fairness

creating a new integrative perspective on justice and fairness

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Vulnerable Groups’ Claims for Redistribution – Austria: Are universal minimum wages an instrument to foster income redistribution?

This post is part of the series of blogs explaining country-specific research papers. This series investigates how the non-realization (or limited realization) of distributive justice claims experienced by the most vulnerable and marginalized groups in society are dealt with in Austria, Hungary, the Netherlands, Portugal, Turkey, and the United Kingdom.

The study conducted by the Austrian team deals with the distribution of wages between labour market sectors. Thereby, special consideration is given to the low wage sector which has grown over the years. The Austrian paper seeks to evaluate the low wage sector as it is today, as well as the working conditions within it. Concretely the research seeks to investigate which groups are over-represented, and whether a universal minimum wage may contribute to fostering distributive justice. The low wage sector is closely correlated with bad working conditions, characterized by lacking time autonomy, lacking worker’s participation and/or job insecurity. Based on these insights, a human rights-based approach was employed to assess the realization of the right to work and its elements in the low wage sector.

The findings of the Austrian report derive from desk research and guideline-based interviews with different experts in the field. The most common definition of low wage is based on the median income in a country – the threshold for low wages is two thirds of the median income. Despite this common definition of low wages, the desk research found different and partly contradicting accounts and statistics on the size of the low wage sector and its development over the years. Various statistics and studies indicate an over-proportional representation of women – Austria has one of the most unjust forms of income distribution along gender lines within the European Union. In Austria the low wage sector is clearly female-dominated. Also young persons under the age of 25 and persons with low qualifications are over-represented.

In Austria, it is predominantly women who work in services related to persons, such as cleaning, gastronomy and care work. These occupational areas are generally less valued than occupational areas classically dominated by men, like for example production. Traditional gender roles see women working in private households or for their families, hence the undervaluation of female dominated labour is explained in the literature by the close link to unpaid care and household work. According to experts, this is one of the factors contributing to the difficulty in reaching fair valuing and employment conditions for women.

When it comes to distributive justice, migrant women are even more disadvantaged in the labour market, especially if they do not speak German well. These women dominate occupational fields with low pay and overall face the worst working conditions, for example in the cleaning sector. Migrant women thus face a more vulnerable situation in the low wage sector than non-migrant women. As they additionally are confronted with barriers in the recognition of their qualifications from their countries of origin, migrant women are often forced to take on jobs in the low qualified and low paid labour market. Furthermore they are less informed about workers’ rights and entitlements – thus there are also structural barriers in how they are represented in worker’s protection organizations. Often the resident permits of third country nationals’ are linked to the permission to work, which additionally weakens their position towards employers and their capacity to negotiate working conditions and wages in their own interests.

Cleaning is considered the most unattractive occupation within the female-dominated low wage sector. Not only are wages low, but there are also precarious working conditions with lacking time autonomy and little to no prospects for promotions. While in some male-dominated sectors heavy, burdensome work is acknowledged and compensated with surcharges, this is often not the case in the female-dominated low-wage sector. While for example metal workers receive surcharges, care workers who conduct physically and mentally demanding work do not receive compensation through higher wages. In child care for example, workers are confronted with a high noise level and have a great responsibility. These aspects are not taken into account when it comes to wages, which leads to grave injustice in the labour market.

However, the findings of the research conducted also show low-wage sector employees do not perceive their earnings as unjust compared to the wages of high-wage sector employees. It seems that the main source for feelings of injustice when it comes to wages is in the direct comparison with other employees working in the same company.

When it comes to whether the introduction of a universal minimum wage might foster justice in income distribution, it should be stated that most EU member states indeed have already introduced a general minimum wage for their respective labour markets. Austria, where collective wage agreements hold a prominent role, introduced a sectoral regime, foreseeing minimum wages for the wide majority of economic sectors. To some extent such minimum wages vary depending on sector. Until 2020, initiatives have been taken to implement a universal minimum wage of 1500€. Those experts interviewed argue that a universal minimum wage can only be seen as one (of many) tools to iron out injustices in the labour market. There are too many other factors influencing wages, such as heavy work surcharges, discriminatory work assessment, etc. which would not be evened out by a universal minimum wage. Consequently, these experts argue for a combination of collective agreements, wage transparency and minimum wages to most efficiently ensure a just distribution of income and to thus foster justice at the labour market.

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