Over 1/3 of employers are planning layoffs and price increases if minimum wage goes up

The Serbian Employers’ Union has not yet proposed a specific amount by which the minimum wage should be increased, but it underlines that the most important parameters for businesses in Serbia are the growth of gross domestic product (GDP) and inflation.

“The unions have come forward with their proposal. We haven’t yet presented a specific amount, but we always emphasize that the most important parameters for businesses in Serbia are the growth of GDP and inflation,” says Ljiljana Pavlović, a member of the negotiating team from the Serbian Employers’ Union (UPS).

Negotiations on the new minimum wage, which will be applicable from January 1, 2025, began yesterday. Union representatives are demanding that the minimum wage be higher than 60,000 dinars. The government has not yet provided an official proposal, but unofficially, Serbian President Aleksandar Vučić hinted that the minimum wage next year could be between 51,000 and 52,000 dinars.

Pavlović says that at the first meeting of the minimum wage negotiations, they considered the parameters used to determine the minimum wage.

“We received the latest data from the Ministry of Finance regarding GDP growth, the value of the average consumer basket, inflation, and all other parameters important for the negotiations,” she said, adding that they did not receive a specific range for the minimum wage increase from government representatives.

Pavlović also recalled that the Union typically conducts a survey among employers before negotiations.

“According to the data we received from employers, about 35% of them are against higher minimum wage and believe that it will negatively affect their business. One of the first measures they would implement in that case is to reduce the number of employees and increase the prices of their services and products,” she said.

Pavlović also mentioned that employers still expect some intervention from the government in the form of increasing the non-taxable amount or reducing taxes and mandatory social contributions if there is a significant increase in the minimum wage.

Speaking about the union’s proposal to raise the minimum wage above 60,000 dinars, she noted that that proposal is not realistic at this time and that she doesn’t think the minimum wage can go up by 31.32%.

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