Luxembourg rarely gets much international attention. But last week, the government of the Rhode-Island-sized nation-state made some dramatic policy announcements. Last Thursday, a new ruling coalition announced that the landlocked Grand Duchy would be the first country in the world (just ahead of Estonia) to make its public transit entirely free at point of use.
If that groundbreaking announcement weren’t enough, the coalition also confirmed that it would boost Luxembourg’s monthly minimum wage by €100 ($114), give everyone two more days off a year, and legalize recreational cannabis by 2023. [...]
Right now, for example, public transit is practically free: A two-hour ticket on the railways costs €2 (or €3 in first class), while an all-day pass costs €4. Young people and students, meanwhile, already travel free. These nominal charges only generate €30 million of revenue annually for a system that costs a little under €1 billion to run, so it’s no great leap to dispense with charging at point of use altogether. Dispensing with the need for tickets also cuts the costs incurred selling and checking them, and the revenue shortfall will be partly recouped by cancelling a commuter subsidy. The hope is that the law will ultimately pay off in other ways, by reducing direct costs for citizens and getting cars off the road when they travel. [...]
The minimum-wage raise and extra holidays, meanwhile, might sound like populist pie in the sky to Americans. But in Luxembourg, it’s just an extra cherry on top of an already generous layer cake of progressive working conditions. Working weeks are already short (an average of 1,512 working hours per year in 2015, compared to 1,783 in the U.S. and 1,676 in the U.K.) and conditions especially flexible. Creating a new national holiday and adding a day to the country’s statutory minimum will bring the total number of days off employees must receive (excluding national holidays) up to 26. With the total national holidays now at 11 days, that means all Luxembourg workers can expect 37 paid days off a year. And the minimum wage in Luxembourg is already quite high. With different minimum categories depending on age and qualification, its current lowest rate for workers over 18 is €2,084.54 ($2,364) a month.
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