Saturday, March 2, 2024

STATE-SPONSORED MINIMUM WAGE PAYMENTS ARE COMING TO AN END

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Serbian Minister of Finance, Mali, announced that the last payment, amounting to 18,000 dinars (150 euros) will be made on September 8. Meant at mitigating the hard consequences of the corona-virus pandemic, it will be paid to more than one million workers, employed in 235,000 enterprises. It’s the second payment within the last of the two “assistance packages”, each payment equaling 60% of the statutory minimum salary. There were five of them since the corona crisis started, and they were all paid from the budget, the total value of the expenditure exceeding 130 billion dinars (1.1 billion euros).
It cannot be denied that the government lavishly assisted the business and the employees, as its program worth 5.8 billion euros is – judged by Serbian criteria – a gigantic expenditure. Its implementation prevented the realization of the catastrophic scenarios, which could have ended up with closure of many companies and mass dismissals – something which in certain countries has already been happening. Here, a great part of the business kept on working and each worker in SMEs got at least five times a sum equaling 60% of the minimum wage. The financial assistance was decisive in safeguarding the macroeconomic stability and maintaining the rate of employment almost unchanged. All this, however, might easily change in autumn, when the economy, after months of government support, will be left on its own- and that’s what the unions are mostly afraid of.
The total public assistance has amounted to 12.5% of our GDP and, as it seems, it helped preventing a precipitous fall of production and a sudden growth of unemployment. In the first six months of the crisis, the GDP surprisingly decreased by only 0.9%, which is a result that can be envied even by some more developed economies. However, the highly unforeseeable effects of the pandemic and the general negative inputs of the world market, make unions feel much more skeptical about the promised “rosy future”, especially taking into account the general neoliberal mentality of the leading government officials.

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