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Economists are terribly upset whenever raise of minimum wages is mentioned, and keep claiming that increased costs reduce competitivity of our economy, and consequently loss of jobs. Foto: Pixabay

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Unionists would raise minimum wage - salvation, or ruination?

Productivity of jobs is crucial
19. April 2017 ob 12:46
Ljubljana - MMC RTV SLO

The unionists are calling for a new joint request for raise of minimum wage to € 646.53 net. The economist and analysts at the Chamber of Commerce and Industry of Slovenia (GZS) Bojan Ivanc warns that the proposal is irrational, as it would endanger 50,000 jobs.

The Independent Unions of Slovenia (NSS), representing industrial labourers which are as a rule chained to assembly lines earning minimum wages, are convinced that no employed person should face the risk of social exclusion. Therefore, they appealed to all the unions of Slovenia to join the new action, and in the name of all the employed people file a new bill on minimum wage which would demand that the basic minimum wage should not amount to less than 60% of the average wage, and should not fall below the threshold of social exclusion for the previous year in the Republic of Slovenia. Their calculations show that the minimum wage should amount to € 646.53 net, as stands in their initiative.

The Union's s proposal would introduce the system of "uravnilovka", i.e. equalisation of pay, and pose a threat to jobs in activities with low added value, explained the economist and main analyst at the GZS Bojan Ivanc. "Tying the lowest basic wage to minimum wages would cause it to change in line with minimum wage, and consequently all the wages in the society would increase. Benefits are also tied to the basic wage, while minimum wage already contains certain benefits, therefore such comparison is unsuitable from systemic point of view. It would result in large wage inflation, which the Slovenian economy wouldn't be able to bear," he explained.

The Unions disagree. Economists are terribly upset whenever raise of minimum wages is mentioned, and keep claiming that increased costs reduce competitivity of our economy, and consequently loss of jobs. "How is it possible that billions of Euros have disappeared, a number of companies went bankrupt, and billions of Euros have been made available for bank rehabilitation - while a couple of tens of Euros for minimum wage would cause destruction of the country," Rastko Plohl, president of the NSS posed a rhetorical question.

Gorazd Kosmač, MMC; translated by G. K.