Trade unions are calling for pay rises and rent freezes as new research shows housing costs typically exceed the income of low paid workers in the majority of EU capital cities.

An analysis of EU data by the European Trade Union Institute found that the cost of renting a capital city apartment with at most two bedrooms is on average 218 Euro more per month than statutory minimum wages.

The average cost of rent is over 700 Euro more than the minimum wage in Prague, Lisbon and Dublin, while it is over 400 Euro more in Athens, Bratislava, Budapest, and Valletta.

Outside capitals

Workers living outside capitals also face difficulties. When all parts of countries are taken into account, the average cost of renting an apartment accounts for 42% of the minimum wage.

The lowest paid workers in five countries – Malta, Ireland, the Netherlands, Luxembourg and Estonia – spend more than half of their wages on renting an average 1-2 bed apartment, while workers in another twelve countries spent a third or more (see table 2).

The findings come ahead of the launch by the European Commission on Wednesday 6 May of a recommendation on fighting housing exclusion as part of its Affordable Housing Plan.

The European Trade Union Confederation (ETUC) is calling for:

• All member states to fully implement the minimum wage directive, including robust action plans to genuinely promote collective bargaining which will ensure more workers receive fair pay;
• Member state governments to take housing costs into account when establishing whether minimum wage rates are adequate;
• The introduction of rent regulations to freeze housing costs for workers, protect renters against exploitation, and protect vulnerable families from eviction;
• Increased public investment in social housing including through EU investment tools and a revision of state aid rules.

ETUC General Secretary Esther Lynch said: “The disconnect between rent and pay is completely unsustainable. When you add in the rising costs of energy and food, working people are left having to borrow for necessities and with virtually no disposable income – making saving to replace essential household appliances, or a visit to the dentist, an impossibility.

“That’s not only bad for individuals but for Europe’s economy. When working people have money in their pocket they spend it in the real economy. The EU must no longer allow money to be siphoned off through financial speculation on people’s homes.

“We urgently need to give the European economy a much needed boost in demand by freezing rents, raising pay and increasing investment in social housing.”