How was the minimum wage increase received by businesses? - Zekja: Production costs are expected to increase by 15%
The decision to increase the minimum wage is raising concerns among businesses, which warn of a knock-on effect on the cost structure. Although the government has promised compensation for employees paid the minimum wage, private sector representatives say the real impact goes beyond this measure.
Florjan Zekja Business representative:
"Despite the fact that the government has promised to compensate for the increase in the minimum wage, workers who are on minimum wage, which is a practice followed earlier when the salary was increased by 40 thousand lek, nevertheless, this disrupts our salary management and the salary system because the moment you give a new salary of 50 thousand lek to a worker without experience or who does not produce, then a worker who bears the entire productivity or production of the business, normally you will also increase it for him. And if there is an increase of 15% for the worker without experience, normally it will also be for the worker with experience."
The increase in the minimum wage does not only affect low-wage workers, but extends across the entire salary hierarchy, leading to an immediate increase in operating costs.
"So it leads to an artificial increase in all production costs by 15%. As is known, especially in the manufacturing sector, the main item is the wage item. So it is an increase that will lead to an excessive increase in terms of management and normally, this will be added to other costs, which we must take into account that with the movement of the euro, with the euro exchange, with the disorder that the euro exchange has brought us, many other items that were paid in euros have also increased. The increase in transportation and all of this leads to an annual increase in our management that is not low, but is over 15-20%. "
If these increases are not accompanied by long-term supportive policies, the effect could be reflected in prices, investments, and employment, especially in the manufacturing sectors.
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