Minimum wage to rise by 4.9%

Ljubljana – The statutory minimum wage in Slovenia is to increase by 4.9% to EUR 1,074 gross as of 1 January, reflecting the increase in inflation last year, the Labour Ministry has announced.

Minister Janez Cigler Kralj decided that the minimum wage for 2022 would be adjusted in equal amount to the rise in consumer prices in the past year after a second round of talks with social partners on Wednesday.

Under the minimum wage act, the wage is adjusted once a year at least to the rise in consumer prices. Available data from the Statistics Office shows annual inflation ran at 4.9% in December.

In a press release, the ministry said the minister’s decision reflected the current macroeconomic forecasts, the uncertainty surrounding the Covid-19 pandemic and talks with the social partners.

The rise is much lower from the one proposed by the trade unions, who are disappointed, while the Chamber of Commerce and Industry (GZS) suggested it was too high and should be subsidised by the state.

The unions proposed a rise of 10.65% to EUR 1,133.35, Lidija Jerkič, the head of the ZSSS, the country’s largest trade union association, told the STA.

They believe the rise should reflect not just the rise in living expenses but also economic growth, real wage growth, the fall in unemployment and in particular the most recent price hikes.

Jerkič said they also believed the rise should be more substantial because the minimum wage amount was based on minimum expenses from 2016, since when “these have increased substantially”.

Meanwhile, the GZS said such a rise would be a major burden on businesses, in particular energy-intensive industries and small businesses.

They propose for the state to return part of the money raised through higher wage by granting a subsidy of EUR 30 per employee a month to the worst hit companies, following the model applied in 2021.

The GZS noted that the minimum wage had already risen by 8.9% last year despite consumer prices falling by 1.1% from December 2019 to December 2020, which meant the minimum wage rose by about a tenth in real terms.

The chamber also noted that Slovenia already has one of the smallest differences between the minimum and average wages in the EU. Data from 2019 shows the at risk of poverty rate of those in a job in Slovenia is 3.4%, 15-fold lower than for the unemployed, which shows the minimum wage does it job, said the GZS.

Meanwhile, Branko Meh, the head of the Chamber of Trade Crafts and Small Business (OZS), said they advocated for decent pay and decent work and were not preoccupied that much about the minimum wage.

“However, we do understand large companies, to which a five to ten percent rise in minimum wage means a substantial amount. Some are warning they will be forced into layoffs given such a rise,” said Meh.

GZS executive director Mitja Gorenšček noted that the minimum wage could increase further once the government-sponsored bill raising the general income tax relief is adopted.

The new amount of minimum wage is expected to be released in the Official Gazette on 20 January and will apply for work done from 1 January.