Minimum wage in Serbia far below the costs of dignified existence

Foto: Nemanja Jovanović / Kamerades

The public will learn the official minimum wage for the next year no later than mid September. However, although the Social and Economic Council has just entered negotiations, it is already certain that the minimum wage will be set below the cost of the minimum consumer basket.

Even if the minimum wage for the next year reaches the sum of 34 000 RSD (290 EUR), which the trade union representatives are pushing for, it still won’t be enough to provide a dignified existence.

According to the Labour law, the minimal wage is set by the Social and Economic Council, which gathers representatives of the Government, representative trade unions and employers’ representatives. The law prescribes the minimum wage be set according to the “existential and social needs of the employee and their family”, and the financial value of the minimum consumer basket appears as the economic standard of the said needs.

The minimum wage in Serbia is currently set at 27 000 RSD (230 EUR), while the financial value of the consumer basket is around 37 000 RSD ( 315 EUR). According to the current data close to 350 000 employees earn a minimum wage.

It is important to point out that the articles of the Labour law, including the minimum wage norm, refer only to “employees” – the category of workers with employement contracts. Such restrictive legislation fails to acknowledge the rising number of workers engaged through different flexible agreements, or without any, who earn less than minimum wage in a large number of cases.

The very existence of a standard such as the “minimum” consumer basket, the financial value of which will, according to the announcements, remain above the minimum wage, is telling of the state’s attitude towards the people living in Serbia.

The minimum consumer basket has little to do with the actual life of people in Serbia. It assumes that one lives in their own accommodation. In reality, many are forced to rent apartments, which pushes their housing costs significantly above the sum attributed for this purpose by the official statistics.

Is a monthly expenditure of 124 RSD (1 EUR) enough to cover the cost of education? Even if we assume that a worker earning a minimum wage has no need for education, what happens if he or she has children? The given sum certainly fails to cover even the basic needs, and is far below the price of textbooks.

Health services might be covered by the 1400 RSD (12 EUR) a month set by the consumer basket, if you happen to be lucky enough that neither you nor any of your family need healthcare. However, in case of sickness, regardless of the fact that you as an “employee” (earning a minimum wage) have a right to healthcare, the cost of any treatment will very soon exceed sum set by the statistics.

How much do we need?

According to last years’ research, the minimum wage that would provide a dignified life in Serbia should be somewhere near 78 000 RSD (660 EUR).

Such a salary, received for work within the standards of a working week, could provide for the minimal needs of a family, including food, housing, healthcare, transport, education and savings for unplanned expenses.

The said 78 000 RSD would somewhat exceed the financial value of an average consumer basket (72 000 RSD), which falls closer to the needs of the population compared to the minimum consumer basket.

The minimal wage in Serbia will be officially known no later than 15th of September. Unfortunately, it is already quite certain that it will not significantly contribute to satisfying the “existential and social needs of an employee and their family”.

Translation from Serbian: Iskra Krstić

This article was originally published in Serbian on Aug 19, 2019.

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