Negotiations between the Trade Unions, employers and the Government of the Federation of Bosnia and Herzegovina continue on the increase of the minimum wage in the Federation of Bosnia and Herzegovina.
The first proposal of the Federation of Independent Trade Unions of Bosnia and Herzegovina was that the minimum wage in the Federation of Bosnia and Herzegovina be calculated according to professional training, and that for workers with primary school it should be 1,200 KM, secondary school 1,400, higher 1,500 and higher vocational training 1,600 KM.
However, yesterday the representatives of the FBiH Employers’ Association and the FBiH Government rejected this proposal at a meeting, so the union made a new one.
They proposed that the minimum wage in the Federation of Bosnia and Herzegovina be 70 percent of the average wage in this entity.
The Government and employers have not yet given an opinion on this proposal, but they will do so at the meeting on Thursday.
The minimum salary of up to 1,600 KM is not realistic
Nermin Nikšić, the Prime Minister of the Federation of Bosnia and Herzegovina, also spoke, who during his guest appearance at TVSA said that the union’s wish for the minimum wage to be from 1,200 to 1,600 KM is not realistic at this time.
– It’s great to have desires, I’m aware that they are also needs, but I want to remind you how we got to what we have now. Last year, we decided to undergo a shock therapy because the previous discussions did not bear fruit. Then there was the fear of employers, and now they say that it was an excellent decision by the Government. There were strong analysts that we will be left without 25,000 jobs, and even protests were organized due to the increase in the minimum wage. This year, in order to compensate for that, more than 100 million KM was given as an incentive to businessmen – said Nikšić, who also reminded of the two decrees on the payments of the non-taxable part.
He reminded that the minimum wage has increased from 619 KM to 1,000 KM and that we should not expect the same shock therapy now.
– We will go with the increase as much as the reconciliation formula says. If it is 20, 30, 50 or 100, how much does the formula say is realistic. We have to wait for some more statistical data – said Nikšić while visiting TVSA.
Populism will cost us the most
Muharem Karamujić, a professor at the Faculty of Economics in Sarajevo, points out for Faktor that it is good that the social partners gave up on the original proposal because it is not a realistic possibility for the economy.
– Populism will cost us more. Perhaps it would be realistic to align wages with inflation or the consumer basket. Will it have economic consequences? They want big ones too. GDP will decrease again immediately. Not everyone will experience this in the same way because not everyone has the same experience – said Karamujić.
He pointed out that it is better to borrow money and invest it in reducing income tax in the Federation of Bosnia and Herzegovina.
– The reduction of contributions would have a favorable effect on the economy in Bosnia and Herzegovina, so that then there would be no problem to meet the demands of unions and workers, but to make a profit in the economy – concluded Karamujić.
The minimum wage should be adjusted to the cost of living
Igor Gavran, an economic analyst, points out for Faktor that since the amount is somewhat lower than earlier proposals, it is easier to make it feasible and regardless of this advantage, nothing is feasible without a proportional reduction in contributions.
– If there is no such thing, even the current minimum net salary will not be sustainable for many, especially small businesses, and again the Government will have to continue with budget payments, the so-called help. The essence is not the amount of the increase, but the way to make it bearable for employers and sufficient workers – explains Gavran.
He points out that the minimum wage should be adjusted to the cost of living and similar parameters.
– Alignment with the average does not make sense because it is part of the average salary. Well, every time the minimum increases, the average increases immediately, and that’s why it’s not logical. As a criterion for the first time, it may make sense, but further alignment should be based on other criteria. For example, with a combination of the cost of living, the results of business operations, the ratio of the burden of the price of labor and others – concludes Gavran, he writes Factor.
