An increase in wages that leads to new problems. In short, this is the picture that has been coming from Republika Srpska since the beginning of the year and the increase of the lowest salary. What should be positive and encouraging news for everyone, could lead to new problems for workers, given that there are increasingly loud announcements about job cuts, new price increases and the worsening of an already poor standard of living. New hope or new problems?
In the four billion BAM reported net profit and how much economic entities achieved in the last year – there is, say the union, the key to increasing workers’ wages. Estimates are that at least another third of the profit remained in the gray area. The public was divided by the question – what will the RS Government’s decision on increasing the minimum wage bring?
“It will bring two things. One is that workers who receive the lowest salary and do the simplest work will initially have their salary increased by 200 marks – that amount will also be increased due to past work, that is, we have increased the amount of hot meals that belong to all workers, including those who receive the lowest salary . Another thing is that the lowest salary pushes all other salaries”, explains Ranka Mišić, president of the Trade Union of RS.
The President of the Union of Employers of the RS, Saša Trivić, states that through increased VAT – due to inflation – the Government will receive more money from employers who are in the gray zone, will receive less money from those who will fire workers, will spend more money for part of the public sector that must raise salaries: “These are all effects that are economic, inevitable and that we announced, but here, the Government decided to make such a decision, and only they know why.”
Can the economy, which is already on the brink of extinction, withstand this – ask the Union of Employers and the Chamber of Commerce of the RS, who submitted an initiative to the Government to suspend this decision, justifying it by explaining that this decision will entail a series of negative effects Analysts they claim that this is a way of throwing dust in their eyes, stating that there will be no increase in the standard of living because the workers, who are also the end consumers, will be greeted by an increase in prices. Employers have the same attitude.
“On the domestic market, I see a big challenge and problem to break through the projected inflation rates in the pressure to increase the minimum labor price. The government of the RS made a decision to increase the minimum labor price from BAM 700 to BAM 900, out of economic logic,” says economic analyst Miladin Stanić.
Trivić adds that some employers will not have a problem because they will pass on their costs to customers, but that there are already companies that are laying off workers because they are unable to transfer the amount of the lowest salary to the end customer: to the customer that his service has become more expensive by 30 percent and we already have companies that have started laying off”.
Cities located close to the border with Serbia, such as Bijeljina, may lose a large part of their trade income due to the procurement of goods from Serbia. Some artisans have already raised the prices of their products. The price of bread in the Banja Luka region has already increased – in Semberija it is at a standstill for now, but only thanks to the current supply of bread grain.
“These stocks are not large, they are smaller quantities, but even the announced increase in the price of oil and oil derivatives will further increase the price of labor, which will only add fuel to the fire of this decision of the Government. What we can expect are certainly price increases,” warns Radenko Pelemiš, president of the Association of Bakers of the Bijeljina region.
The wave of price increases is also spreading to the production of meat and milk, an increase in the prices of basic foodstuffs is expected, followed by an increase in prices in catering facilities.
“There must be an increase in prices, there is no other way to compensate for everything that needs to be paid. Again, this reduces the possibility of sales, the purchasing power decreases, and then it also reduces the possibility of positive business – everything pulls each other back”, points out Milenko Zupur, owner of the meat industry and catering establishments.
From the Government to the employers, from the employers to the citizens, who at the end of each story pay the guild. With this decision, economists believe, there could be more work for the inspection authorities, considering that it opens up more opportunities for “illegal work”.