Housing costs have become the single largest expenditure for European households, accounting for 23.6% of spending on average across the EU, according to Eurostat. But for minimum wage earners in many capital cities, the burden is far heavier: in 19 of the 24 EU countries that have a statutory minimum wage, the average rent for a two-bedroom flat exceeds the gross monthly minimum wage.
The analysis, conducted by the European Trade Union Confederation (ETUC) using EU data, paints a stark picture of the disconnect between wages and housing costs. In Prague, the average rent of €1,710 is equivalent to 185% of the country's gross minimum wage of €924. Lisbon follows closely at 168%, where the minimum wage (paid over 14 months) comes to €1,073 against an average rent of €1,710.
Capitals Where Rent Swallows the Entire Paycheck
In seven capitals, the share of the gross minimum wage needed for rent exceeds 150%: Budapest (159%), Bratislava (158%), Sofia (154%), Athens (153%), and Riga (151%). In these cities, a minimum wage earner would need to spend their entire salary on rent and still require more than half a salary extra to cover it.
Even in capitals where the ratio is below 150%, the gross minimum wage is insufficient to cover rent in many cases. Valletta (143%), Paris (138%), Tallinn (131%), Madrid (125%), Bucharest (122%), Warsaw (117%), Dublin (113%), Ljubljana (105%), and Vilnius (105%) all exceed the 100% threshold. In Paris, for example, the average rent is €2,523, while the minimum wage is €1,823. In Madrid, the figures are €1,721 and €1,381 respectively.
These figures are based on gross minimum wages, meaning the real burden on workers is even higher once taxes and social contributions are deducted. The ETUC notes that the actual disposable income of minimum wage earners is significantly lower than the gross amounts used in the analysis.
Brussels and Berlin Offer Some Relief
Brussels stands out as the most affordable EU capital for minimum wage earners, where the gross minimum wage covers 70% of the average rent (€1,476 rent versus €2,112 minimum wage). Berlin is second best at 76%, followed by Nicosia (85%), Luxembourg City (87%), and The Hague (96%).
“High housing costs and low wages are driving people into poverty and the economy towards a recession,” said ETUC general secretary Esther Lynch. “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.”
Country-Level Picture Less Dire
When looking at national averages rather than capital cities, the situation appears less severe. In many EU countries, the gross minimum wage is sufficient to cover the average rent outside the capital. However, the share of income spent on rent still far exceeds the EU average of 23.6% for housing and utilities.
Among 16 EU countries analysed by ETUC, the share of the gross minimum wage required for rent ranges from 33% in Poland (€1,139 minimum wage versus €376 average rent) to 61% in Malta. France fares better at €1,823 versus €695, and Greece outside Athens shows €1,027 versus €408. In Spain, the minimum wage of €1,381 covers an average rent of €660.
The ETUC is calling for all EU member states to fully implement the minimum wage directive, including robust action plans to promote collective bargaining. It also urges governments to take housing costs into account when setting minimum wage rates and to increase public investment in social housing, including through EU investment tools and a revision of state aid rules.
Around 13 million workers across 21 EU countries earn the minimum wage or less, according to Eurostat. The share is significantly higher in several member states, underscoring the urgency of the issue. As the cost-of-living crisis continues to squeeze households, the gap between wages and rents in Europe's capitals shows no sign of narrowing.
