The Voice of the Workers No. 1
summary of content

Minimum wage – summary of content

The first issue of the regional newsletter “The Voice of the Workers” is dedicated to the minimum, i.e., the lowest wage or salary – probably a topic that preoccupies and concerns the largest number of people in the countries of the region, especially workers and their families. In addition to thematic texts, the newsletter also published news about the most important activities, initiatives and actions of the trade union headquarters of the countries in the region – members of the regional trade union network Solidarnost.

The thematic texts were written by professional members or the members of the information services of the trade union headquarters, while the authors of the news are journalists, members of the media union engaged for the purposes of the newsletter. All the texts were edited by members of the Voice of the Workers Editorial Board.

General observations in the thematic texts are the following:

• The minimum/lowest wage or salary in the countries of the region is regulated by the labour law (Montenegro, Republika Srpska and Serbia) or a special law (North Macedonia, Slovenia and Croatia), with the exception of the Federation of Bosnia and Herzegovina where it is regulated by a government by-law;
• In none of the countries of the region is the minimum/lowest salary, i.e. wage, sufficient to purchase a trade union consumer basket;
• The amount of the “minimum” is not regularly adjusted to inflation, i.e. the increase in the cost of living;
• The relations between the minimum/lowest and the average salaries differ significantly by country in the region;
• Private employers often abuse the legal norms on the nature and length of the payment period of the minimum/lowest wage/salary;
• In most countries, there is a noticeable trend of growth in the number of workers who are paid the minimum/lowest wages or salaries.

Similarities and differences in the regulations for determining the minimum/lowest wage/salary in the countries of the region:

In the Federation of Bosnia and Herzegovina, its government, after consultation with the Economic and Social Council, determines the lowest salary based on the lowest labour price determined by the collective agreement and the labour regulations. Adjustment of the lowest salary is done once a year, no later than December 31 of the current year for the following year. According to the government decree on calculation methodology, the lowest salary is adjusted as the sum of 50% of the growth in consumer prices and 50% of the growth of the gross domestic product in B&H in the current year for the period January – September, and according to the data of the Federal Bureau of Statistics.

In Republika Srpska, an entity of Bosnia and Herzegovina, the lowest salary is determined by the government, on the proposal of the Economic and Social Council (representatives of the government, representative trade unions and employers’ associations), in the last quarter of the current year for the following year. If the EEC does not reach a consensus on the amount of the lowest salary, the final decision is reached by the government, taking into account the movement of wages, the growth of production and the standard of living. All increases are added to the amount of the lowest salary. The amount of the minimum wage is determined once a year, but due to extraordinary circumstances (sudden increase in inflation), each of the social partners can propose an extraordinary adjustment of the amount.

In North Macedonia, the minimum wage is adjusted every year. The Law on Minimum Wage stipulates that the minimum wage is adjusted to a 50% increase in the average net salary paid for the previous year and to a 50% increase in the cost of living index. At the same time, the minimum salary cannot be lower than 57% of the average net salary paid in the Republic of North Macedonia. In order to prevent the danger of layoffs, the possibility of financial assistance to companies that cannot pay the minimum wage – but up to a year at most – is provided.

In Slovenia, the minimum wage is determined as the sum of the minimum cost of living increased by 20 percent (maximum 40 percent) and the amount of taxes and contributions for mandatory social insurance for an employee who does not receive benefits for dependent family members in the year for which the minimum wage is determined. The amount of the minimum wage applies from January 1 of each year, and its amount is determined by the Minister of Labour after prior consultation with trade unions and employers. The law foresees the annual adjustment of the minimum wage with the increase in the cost of living, i.e. with the percentage of annual inflation. When harmonising, the economic conditions in the country or economic growth, the movement or growth of wages, employment trends can be taken into account.

In Croatia, the Law on Minimum Wage regulates that its amount, after consultation with social partners, is proposed by the minister responsible for labour, while the final decision is made by the government for the following calendar year, once a year and no later than October 31. When determining the amount, the “increase in the share of the minimum wage in the average gross wage” is taken into account. The minimum wage cannot be set at an amount lower than the amount for the previous year. The criteria used by the minister when proposing the “minimum” are the rate of inflation, the movement of wages and unemployment, the overall state of the economy, whereby special attention is paid to industries with low wages and vulnerable workers.

In Serbia, the minimum wage is determined by the decision of the Social and Economic Council of the Republic of Serbia. If the SEC does not make a decision within 15 days since the start of the negotiations, the government reaches a decision on the minimum labour price within additional 15 days. The minimum labour price is determined per working hour without taxes and contributions, for the calendar year, no later than September 15, and is applied from January 1 of the following year. The minimum price of work cannot be lower than its amount for the previous year. In the last 10 years, in the process of negotiating the “minimum” wage, the Social and Economic Council has adopted a decision on its amount only twice. In all other years, that decision was made unilaterally by the government using the right granted to it by the Labour Law.

In Montenegro, according to the Labour Law, the minimum wage cannot be lower than 30% of the average wage in the previous half-year, according to official data determined by the state authority responsible for statistics. The amount of the minimum wage is determined once a year by the government on the proposal of the Social Council of Montenegro, based on criteria such as the general level of wages in the country, the cost of living and economic factors, which include the requirements of economic development, the level of productivity and the need to reach a high level of employment. By amending the Labour Law in December 2021, it was defined that the net amount of the minimum wage cannot be lower than 450 euros.

Nominal and real value of the minimum/lowest wage/salary

In the Confederation of Independent Trade Unions of Bosnia and Herzegovina, it is not clear what data the government of the Federation of B&H used when they determined that the lowest salary for the year 2022 would be 543 KM (277 euros), because the cost of living had increased several times, especially due to the pandemic. This is best evidenced by the data that in January 2020, the union consumer basket for a family of four cost 1,965.96 KM (1,005.18 EUR), and in July 2022, it cost 2,668.32 KM (1,364.29 EUR). That is why the union points out that the amount of the lowest salary set by the government is not even enough to purchase a sufficient amount of food for a month for the worker and his family. In fact, that minimum wage does not even cover a quarter of living expenses, and it is received by a quarter of employees in the FB&H. At the same time, the average salary in the FB&H amounts to 567.53 euros and covers 41.6% of the trade union consumer basket.

By the decision of the government of Republika Srpska, the lowest salary for 2022 was increased from the original amount of 590 KM to 650 KM (333 euros) and thus reached only 56% of the average salary.The union consumer basket for July 2022, according to the calculation of the Confederation of Trade Unions of the Republika Srpska, cost 2,278.15 KM, which means that the lowest salary was only enough for 28.60% of its value. And we are talking about the expenses of a four-member family for food, housing and communal services, current household maintenance, clothes and shoes, hygiene and health care, transport, education and culture. It is thus obvious that the amount of the lowest salary in Republika Srpska does not even cover the food costs of the average household.

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In North Macedonia, following the persistent demands of the Federation of Trade Unions of Macedonia, expressed through organised protests and through social dialogue, the government increased the amount of the net minimum wage to 18,000 denars (293 euros) in March 2022. Although the value of the union minimum consumer basket in the same month amounted to twice as much – 36,768 denars (about 600 euros), it was a significant increase compared to the previous value of the “minimum” determined in August 2021, when it amounted to 15,194 denars (247 euros). According to trade union data, the new adjustment of the “minimum” was achieved in favour of at least 80,000 workers. The permanent requirement of the FTUM is that the minimum salary is at least 60 percent of the average salary, which in May 2022 was 36,465 denars (about 590 euros).

In Slovenia, the gross minimum wage in 2021 was 1,024.24 euros, which was 52% of the average gross salary (1,969.59 euros). The Association of Free Trade Unions called on the government (ZSSS) in mid-2021 to adjust the minimum wage to the increase in the cost of living by at least ten percent. At the beginning of 2022, the government increased the amount of the minimum wage by the lowest legally possible amount of 4.9% (1,074.43 euros), in accordance with the calculation of the minimum cost of living, which is carried out every six years based on the Social Security Act. The union’s argument was that the current amount of the minimum living expenses of 613.41 euros was based on the calculation from 2017 and therefore did not reflect their real value. The position of the trade union headquarters is that because of this, even the Law on Minimum Wage does not fulfill its basic purpose. The government responded to this request by the AFTUS (ZSSS) by announcing that the new calculation of the level of the minimum cost of living will be completed in the fall of 2022.

The minimum wage in Serbia in the course of 2022 amounted to a net amount of around 35,000 dinars (296 euros), which was 20 percent lower than the value of the minimum consumer basket (41,757.70) and even 60 percent less than the average consumer basket (80,891.41 dinars). The minimal was then equal to half of the average salary (70,920 dinars). There is no official record of the number of workers who receive the minimum wage, and trade union estimates are that between 350,000 and 400,000 workers live on the “minimum wage”. It is also estimated that the number of workers receiving the minimum wage had not changed significantly in the last five years, until the Covid-19 pandemic, when that number increased.

In Montenegro, with a minimum salary of 450 euros in January 2022, 66.1% of the consumer basket could be paid, while the average salary was sufficient for the entire amount of the basket. Changes on the international as well as the domestic scene (primarily double-digit inflation) have a negative impact on the movement of these parameters, so that already in June 2022, the value of the minimum wage fell to 59.98% of the price of the consumer basket, and the value of the average wage to 94.36%. According to trade union data, since the introduction of the “Europe Now” program (January 2022), approximately 61,000 employees receive the minimum wage in Montenegro.

The minimum salary in Croatia for 2022 was HRK 4,687.50 gross (EUR 623), or HRK 3,750 net (EUR 498). In January 2022, the prescribed net amount of the minimum wage reached the level of half of the average net wage (HRK 7,378, EUR 980) and 60 percent of the median net wage (HRK 6,175, EUR 820). However, due to the continuous growth of the average salary, as opposed to the minimum, whose amount is adjusted at the beginning of the year, the gap between those two income categories has increased. Official data on the price of the consumer basket do not exist, and trade unions estimate that its minimum monthly value for a household of four would be around HRK 7,800 (€1,036). While in 2018, approximately 37 thousand workers received the minimum wage, in 2022 this number increased to approximately 52 thousand, which is more than 4.7% of the total number of employees.

News on trade union activities in the region

The Federation of Trade Unions of Macedonia announced the news about its first free mobile application – My Workers’ Rights, which was used by 12,612 workers in the first half of the year, and which was created with the support of the European Trade Union Confederation as part of the “Trade Unions for a Just Recovery” project.

The Confederation of Free Trade Unions of Macedonia reported on the successful strike of educators organised by the Independent Union of Education, Science and Culture (SONK). Pressured by the strike, the government requested that the dispute be resolved peacefully and accepted the request: Teachers received an 18.4 percent salary increase.

The news of the Association of Free Trade Unions of Slovenia is about activities related to harmonising the costs of transportation of workers to work and allowances for meals during work, as well as efforts to stabilise public health, which according to the union is on the verge of collapse.

The Confederation of Independent Trade Unions of Bosnia and Herzegovina informed about its activities as part of the campaign for the adoption of the Law on the minimum wage “10 for 1000”, in order to improve the economic and social position of workers threatened by the rising cost of living.

The Confederation of Trade Unions of the Republika Srpska has informed about the successful completion of long-term negotiations of branch unions with social partners on the increase of the lowest salary and earnings in certain sectors (administration, public services, healthcare, etc.).

The Confederation of Autonomous Trade Unions of Serbia and the Confederation of Trade Unions “Nezavisnost” announced the news of a joint public meeting in front of the Palace of Serbia in Belgrade, where they protested price increases and demanded a significant increase in the minimum wage.

The Union of Free Trade Unions of Montenegro reported on the activities of its trade union organisation in the Port of Bar, which demands that the privatisation of that company be avoided and the interests and rights of port workers be protected. In the news of the Union of Free Trade Unions of Montenegro, the activities of that headquarters in the field of safety and health at work were pointed out, primarily in terms of preventive action.

The Union of Antonomous Trade Unions of Croatia announced the news about the real reduction of the minimum wage, which fell to the level of half of the average wage in the country, and the activities of branch unions to improve the financial position of workers through collective negotiations.

Author of the summary: Svetozar Raković – journalist and editor of website Nezavisnost.org (Editorial board of The voice of the Workers – VoW)