The Slovenia Times

Economy minister calls for sustainable minimum wage solution


In his first reaction to the Left-sponsored bill proposing to raise the minimum wage, Počivalšek said that "minimum wage correction depends on the level of Slovenia's economic development".

"It's at a high level today and business can afford a rise in the minimum wage much easier than at the time of unemployment. The price of labour force is increasing of its own accord with the higher level of employability," Počivalšek said at a session of the Council for Competitive and Stable Business Environment.

Featuring representatives of the ministry and major business associations, the body provides guidance on government policies and measures.

According to a press release from the ministry, council members agreed with the minister in principle, in particular with the reasoning that the minim wage needed to be raised if Slovenia was to generate a higher value added.

"No doubt it's the employees who represent value added of a company so we all agree that a decent job calls for decent pay," the minister said.

Business representatives on the body argued that the minimum wage should be raised in a well thought-through and predictable manner and gradually.

The bill proposed by Left and backed by the ruling coalition in principle, proposes to increase the minimum wage, currently at EUR 638 net, to EUR 667 in 2019 and EUR 700 in 2020.

After that the formula for calculating the minimum wage would change to determine that it must be 20% above minimum living costs. The amount would not include any benefits.

At present, the minimum wage changes annually at the proposal of the labour minister and in consultation with social partners.

The minister's advisory body was of the opinion that wage policy should be changed in social dialogue and as part of a tripartite pact whose goal they said should be to support joint efforts aimed at preserving realistic wage growth and allowing the economy to develop and become more competitive.

"If there is an increase in the minimum wage, it must be a step in the right direction, which for me is a direction that will be effective in the long run both for companies and employees," the minister said.

The minister called on the council to conduct a detailed analysis of the effects of the rise in the minimum wage.

"I want the proposal to be equipped with concrete figures before the government makes its opinion," Počivalšek said, adding that one of the things taken into consideration should be the impact on competitiveness.

He repeated that all legislative proposals should be subject to a SME test to assess their effect on businesses, especially on small and medium-sized ones.

The proposal for higher minimum wage was on the agenda of the Economic and Social Council on Friday, but substantive debate has not started because employers would want to meet PM Marjan Šarec first to present their grievances.

In questions time in parliament yesterday, Šarec said he agreed the minimum wage should be raised, but would like the rise to be agreed in social dialogue. He regretted that employers were opposed.

The Employers' Association today repeated its arguments against the proposal sponsored by the Left, while noting that despite the promise to obtain an analysis before the bill was passed, Počivalšek also told them today that the bill was linked directly to the supplementary budget for 2019.


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