According to the law, next year minimum wage is to go up for at least 88 zł. However, this rise can mean problems for many companies and for the self-employed, as the minimum wage is connected to the amount of insurance premium and, for example, kindergarten fee.
Minimum wage has to rise accordingly to the law and it will rise for certain. However, it is not sure how big it will be in 2014. It has to rise for at least 88 zł, which stems from the premises concerning next year’s national budget, and from the model, included in the minimum wage act. It would be better if it did not rise more, as this means specific effects for both the employers and the employees – comments Piotr Rogowiecki, Office Director of Polish Union of Loan Funds.
What will happen if the wage will rise drastically?
If the minimum wage will rise, the employees will earn more as long as they will be employed. If their employment will become unprofitable, they will simply lose their jobs. Rise of the minimum wage can mean that some of the companies will leave the market, as strain on their finances, caused by the insurance fees, will become too much – explains the Office Director.
Currently about 3% of the employees are working for the minimum wage. Its rise will not influence significantly the use, it has however an effect on many other indexes.
For example, the fee for public kindergartens in Warsaw is connected to the minimum wage, as are the social insurance fees paid by the self-employed. It is also important to remember that if someone today earns 2,000 zł and the minimum wage would amount to 1,900 zł, then that person would also want a pay rise. It will cause a rise in pay pressure, which, when not connected to economic indexed, would be harmful for the economy. Of course the wages should go up, and I hope they will soon, but it must be fortified by economy, not by administrative decisions – says Piotr Rogowiecki.
Rise of the minimum wage is dependent on the price rise, but also one the further GDP rise, estimated by the government.
If the government will estimate too optimistic GDP, and the real one will be lower, than the minimum wage will rise too much. If it will estimate a low inflation, and the real one will be higher, then the minimum wage will rise too little and the employees will be wronged. The Ministry of Finance often has problems with budgetary forecasts – stresses the expert.
The amount of the minimum wage is settled by the trilateral commission considering social and economic affairs – which is, the meeting of the government, the employers and the labour unions. In 2013 the amount is 1600 zł gross.