Annual inflation in Bosnia and Herzegovina slowed down in June from 5.6 percent in May to 4.2 percent, according to the latest report by the Agency for Statistics of Bosnia and Herzegovina. However, living costs have not decreased. Monthly expenses further burden the household budget and worsen citizens’ living standards.
Adis Kečo from the Confederation of Independent Trade Unions of Bosnia and Herzegovina said that the union has been warning about the stagnation of living standards of workers and citizens, both in the Federation of Bosnia and Herzegovina and across the country.
According to him, many factors contribute to this situation, including the global economic movements and instability in the Middle East, which also affect Bosnia and Herzegovina through price increases in oil derivatives and other products.
“Our data shows that the union consumer basket for a four-member family currently stands at 3,200 BAM, while the average wage in the Federation of Bosnia and Herzegovina is around 1,700 BAM. The most concerning thing is that more than 50 percent of the value of the union consumer basket is spent on food. It is an alarm that requires reaction from the authorities,” Kečo said.
Speaking about measures adopted by the Government of the Federation of Bosnia and Herzegovina, which also includes the possibility for employers to pay up to 300 BAM tax-free, Kečo believes this is an attempt to mitigate the consequences of the price increase, but warns the problem is that it is a voluntary measure.
“The question is how often employers use that option. We still don’t have precise data, but the Tax Administration could say how many employers have used this measure and how many workers received the allowance. This will also show how socially responsible and socially compassionate employers are to their workers,” he said.
He added that previous measures, such as price freezing on certain products, did not bear expected results.
“Due to the increase in living costs, all increased salaries have practically been wiped out by inflation, colloquially said. This makes daily life more difficult for citizens and workers,” Kečo said.
Workers without Collective Contracts in Difficult Position
When asked which workers are most affected by price increases, Kečo said it was difficult to single out specific sectors, but that those not covered by collective agreements are particularly vulnerable.
“Workers who are not covered by collective agreements are in a significantly more disadvantaged position because the employer determines their rights and obligations through rulebooks and employment contracts. In such cases, the union cannot protect their rights the way it can when a collective agreement exists,” he said.
He emphasized that for this reason it is important to increase the coverage of collective agreements so that workers can have job security and better protection of their rights.
Price Increases Outpace Wage Growth
Kečo believes that collective agreements have improved the position of employees, but warns that it is difficult to estimate how much, given constant price increases.
“The question is whether the wage increases through collective agreements can actually follow the pace of price increases we are witnessing almost daily,” he said.
He reminded that the gas price increase is expected, which will further burden household budgets, and warned that the union consumer basket will most likely be higher in August.
“In addition to price increases, the new school year follows. Parents will have to buy things for school, which will represent another blow to household budgets,” he concluded.
