The signatories of the Living Wage Declaration addressed representatives of the Government of the Republic of Serbia, Ministry of Labor, Employment, Veteran and Social Issues, Ministry of Finance and the Serbian Association of Employers regarding the ongoing negotiations on the 2023 minimum wage. See the entire letter below.
Dear Sirs,
As signatories of the Living Wage Declaration, actively fighting poverty and promoting the economic and social rights of female and male workers, we are hereby addressing you regarding the ongoing negotiations on the minimum wage.
The announced 14% increase, along with a rise in the non-taxable salary components, is neither sufficient nor adequate in the current situation. The minimum wage must cover the real cost of living and ensure workers a dignified life.
As you are well aware, rising inflation has made it even more difficult for a large number of people, especially those with the lowest income, to satisfy their basic existential needs.
During the last year negotiations on the minimum wage, the trade unions demanded that the 2022 minimum wage be increased by 20% and equated to the minimum consumer basket, which at that time amounted to 39,000 dinars. Even though the Social and Economic Council decided in 2018 that the minimum wage should cover the minimum consumer basket, this has not happened yet. Last September, the Government of the Republic of Serbia decided to increase the minimum wage by only 9.4%, setting the average monthly minimum wage received by full-time workers at only 35,000 dinars.
In the meantime, inflation went up and prices rose. Part of the increase in the minimum wage of 9.4% was annulled by inflation even before it came into force, in the last quarter of 2021. The National Bank of Serbia announced that total inflation in July of this year was 12.8%, projecting that it will reach 14% in September. Anyone who goes to the grocery store today knows that for the same amount of money, we can buy far fewer groceries than a year ago. As usual, the poor are the first to be hit by the crisis. They spend the largest part of their income on food, and food prices have gone up by more than 20% so far. The real value of the minimum wage has continued its decline (m-o-m).
Once again, the current economic trends confirm that the minimum wage must be adjusted at least twice a year. This would mean that the increase in wages would have to take place already in September so that workers could catch up with the rising living costs, especially taking into consideration the beginning of the new school year and the large costs it brings with it for parents, the announced electricity price increase, necessity to purchase firewood and get prepared for the coming winter.
We urge you to start taking into account the real cost of living so that workers can be provided with a living wage, not a survival one.
The minimum consumer basket is not an adequate measure of the cost of living in Serbia. As you are aware, the minimum consumer basket is determined based on a survey and only shows the consumption of 30% of the poorest households in Serbia. The fact that the minimum consumer basket is not a good parameter is also shown by its substance. Namely, the current calculation implies that a family of three has only 660 dinars available for food per day. It also implies that a family of three has 128 dinars per month for education and 1,500 dinars for healthcare costs. If the consumer basket tells us something, it is the fact that the poorest segments of our society are on the verge of survival. Therefore, it must not be used as a starting point when setting the minimum wage.
The living wage, on the other hand, means that workers and their families can meet the basic needs: food, clothing, housing, public transport, utility and telecommunication costs, education, health care, leisure and culture, including discretionary income, that is, the possibility of saving 10% of the salary. The living wage is paid for work performed during regular working hours and does not include overtime, bonuses and meals allowance. The calculation of the international network Clean Clothes Campaign, which conducted research on the cost of living in the region of Central, Eastern and Southeast Europe, including Serbia, indicates that the living wage in Serbia in 2021 was 114,752 dinars. This figure grew in 2022.
We would like to remind you that the right to a living wage is recognized as a human right in the United Nations Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, the European Social Charter of the Council of Europe and numerous other international documents ratified by the Republic of Serbia. It should be stressed that the Constitution of the Republic of Serbia states that we are a society based on social justice, that human dignity is inviolable, that everyone has the right to free development, the right to respect of his person at work and fair remuneration. Moreover, the Labor Law stipulates that the minimum wage shall meet the basic social and existential needs of workers and their families.
The Serbian Business Registers Agency has published that our economy has been recording increasing profitability. The BRA report states that in 2021 companies in Serbia generated profit of 5.7 billion euros. That is a growth of 79.3% compared to the previous year. Therefore, the money is there. The only question is whether there is a will to redistribute it so that the poorest segments of our society can step out of poverty.
Redistribution of wealth to the poor is the basis of any humane society that cares about people. That is why we believe that increasing the non-taxable salary components is not a good measure because it exempts all salaries without exception – both the lowest and the highest. Our position is that progressive taxation is a more adequate and socially responsible measure. Thus, the lowest wages would be tax-free, while the tax would be gradually increased with the increase in the level of wages.
Bearing in mind everything above, we, the signatory organizations of the Living Wage Declaration, appeal to you to accept the fact that the minimum wage must be determined twice a year starting from September the 1st, that the minimum wage must be adjusted to real cost of living of workers in accordance with the calculation of the living wage, and that the priority of our society must be the adoption of an economic development strategy that will emphasize the dignified life of female and male workers, as well as ecological and social sustainability. The first step in this direction would be to respect the views and demands expressed by the unions regarding the increase in the minimum wage.
SIGNATORIES:
United Trade Unions of Serbia “Sloga”
Centre for Politics of Emancipation
Center for Dignified Work
Center for Democracy Foundation
Social-democratic Club
Ministry of Space
Sustainable Development Center
“Zajedničko” –Platform for Theory and Practice of Social Goods
A 11 – Initiative for Economic and Social Rights
Coalition for Solidarity Economy Development
Alternative Girls’ Center
Centre of Modern Skills
Liceulice (Face of the Street)
ASTRA
Public Policy Research Centre
ROZA – Association for Women’s Labor Rights
Reconstruction Women s Fund
FemPlatz