After the decision of the Government of FB&H to submit the Proposal of the General Collective Agreement to the Constitutional Court of FB&H on review of the constitutionality, Prime Minister of FB&H Fadil Novalic said that the increase of the minimum salary from the current 380 BAM to 420 BAM is unacceptable for the Government of FB&H.
Novalic is considering that certain parts of the General Collective Agreement represent a danger to the heating of FB&H for economic growth in the upcoming years, which would solve all of our problems.
“This year we have an increase of 3.2 %, next year we are expecting growth of 3.6 % and growth of 4.2 % in 2018. This is the stage of heating of the economy, because we need an increase of 6 % in order to overcome our problems,” said Novalic.
He considers that the proposed collective agreement is representing a danger for a significant part of the economy, especially for small and medium businesses with up to 50 employees, which are the source of 85 % of revenues in the FB&H.
“Any increase of the minimum wage that is higher than 3 % is socially dangerous. The last increase of 5 % from 2013 led to a fall in revenues in the FB&H. Here we have proposed 12.8 %,” said Novalic, adding that the increase in minimum wage is a danger for budget since certain social benefits are linked to the minimum wage.
The Prime Minister believes that the General Collective Agreement that was achieved between labor unions and employers would be harmful for macroeconomic growth and that it represents an invasion on the authority of the Government of FB&H, especially in relation to determining the minimum wage.