The goal of raising the minimum wage to 1.000 BAM is not to improve workers’ financial status but to pump an additional 700 million BAM into the Federation of Bosnia and Herzegovina’s (FBiH) budget, says Adnan Smailbegovic, President of the FBiH Employers’ Association.
He believes that the FBiH government, as Deputy Prime Minister Vojin Mijatovic claims, will subsidize crafts and small businesses.
“That’s just throwing dust in people’s eyes. What about medium and large companies with 500 or more employees? An increase in the minimum wage also raises other wages. Over the weekend, I spoke with leaders of a large service company. They said if necessary, they would lay off 100-200 workers. Who will be hit first? Young people in their first jobs, who are still learning the trade and need time… Yet the FBiH government insists this decision is, among other things, for the benefit of the youth,” Smailbegovic points out.
He adds that 2025 will bring a price explosion.
“Everyone will manage in their own way. Shopping centers will raise prices, input costs will go up, service prices will increase… Those raising the prices will accelerate inflation, while employment will simultaneously decrease. And who will bear the cost in the end? Citizens, of course,” he says.
He believes this decision will strengthen the gray economy.
“Look, in the FBiH, private companies have an average of 14 employees. This means there is a significant number of firms, usually family-run, with five or six employees. How are they supposed to raise wages, and from what? Additionally, export-oriented companies cannot increase the prices of their products, as they would lose their markets,” he asks.
He emphasizes that he has asked economists and analysts to investigate whether it has ever happened, especially in this part of Europe, that the minimum wage increased by 61.5 percent (from 619 BAM to 1.000 BAM).
“Fifteen years ago, economically strong and stable Slovenia raised the minimum wage by 23 percent, and they spent years recovering from that measure,” Smailbegovic noted.
