A pay crisis is looming

Following lengthy disputes between trade unions and employers, the Luxembourg government has approved a two-stage increase in the minimum wage. The OGBL, together with the LCGB, had insisted on an immediate monthly increase of almost €300 before tax. However, the authorities rejected this proposal.

Currently, the minimum pre-tax income for an unskilled worker is €2,703, and for a skilled worker €3,244. As part of the first phase, a 2.5% increase will be implemented in the second quarter of 2026, which will also apply to civil servants and pensioners. In the second phase, from 1 January 2027, minimum salaries will rise by a further 3.8%, reaching €2,876 for unskilled workers and €3,451 for skilled workers.

Despite the upcoming changes, participants at a recent OGBL rally at Neumünster Abbey claim that the proposed measures are not enough to offset the rapid rise in property prices. According to activists, the cost of renting a two-bedroom flat in the commune of Rumelange, located near the town of Esch, can reach €2,100 a month. At the same time, even at the lower end of the market, rents are around €1,200–1,300, which violates the standard economic rule that housing costs should not exceed one-third of a family’s total income.

Single-parent families and young people remain particularly vulnerable in the current situation. Trade union representatives have noted a trend whereby young workers are forced, due to the high cost of living, to move to border regions in neighbouring countries or to share accommodation. For some groups of people, the cost of utilities and rent already accounts for 80% of their earnings, forcing them to seek additional temporary work.

Public discontent points to a hidden crisis in a country traditionally associated with the high incomes of bankers and traders. Commentators point out that the real Luxembourg also consists of employees in the retail sector, cleaning companies and the catering industry, whose financial difficulties remain unnoticed behind the façade of economic prosperity.