Meat products and fruits have long been luxuries for workers earning minimum wages. After the Government of the Federation of Bosnia and Herzegovina (FBiH) decided to set the minimum wage at 1.000 BAM, fierce reactions followed. While employers demand the withdrawal of the decision, workers insist that the amount should be even higher, as thousands struggle to survive.
The minimum wage in the FBiH has been increased by 381 BAM starting this month, and the decision is valid until the end of the year. The government will provide subsidies for contributions to artisans and small businesses to help preserve potentially at-risk jobs.
“We believe that even this increase is insufficient. There are 270.000 people in the FBiH who now have reason to hope for better days. These 270.000 people earn less than 1.000 BAM,” emphasized Fahrudin Sahovic, president of the Alliance of Independent Trade Unions of Tuzla Canton (TC).
The Association of Employers in the FBiH claims the decision was neither the result of dialogue nor made transparently.
“This decision, instead of encouraging growth and development, could have counterproductive effects, including mass layoffs, fewer new jobs, reduced competitiveness of the domestic economy, the absence of already scarce foreign investors, and additional pressure on an already overburdened business community,” the association stated in a press release.
The Confederation of Independent Trade Unions of BiH responded to employers’ reactions.
“We know the real problem is that for decades, they’ve been registering workers at minimum wages to evade paying taxes and contributions. They don’t consider how this cheats the state, from which they always expect help and support, while simultaneously humiliating workers both as employees and future pensioners,” stated the Confederation of Independent Trade Unions of BiH.
Economics professor Bahrija Umihanic noted that reducing contributions and finding alternative models should have been the priority, warning that this approach could lead to product price increases.
“This will lead to inflation, and within three months, workers who now receive at least 1.000 BAM will be able to purchase fewer products than they could for a lower wage,” Umihanic cautioned.
Price increases have long been a daily occurrence, pushing the working class to the brink of survival. According to data, business entities generated 69.4 billion BAM in revenue in 2023, with profit per employee the previous year amounting to nearly 11.000 BAM.
Until now, the minimum wage has not increased by even a single BAM. As the country faces a labor shortage, warnings of layoffs are also emerging.
