– The government’s proposition to increase the minimum wage to 2000 PLN gross is a bad idea and will harm those who it is intended to help – say Employers of Poland.
Social partners were presented with the government’s proposition regarding the minimum wage in 2017: 2000 PLN gross. This is significantly more than suggested not only by Employers of Poland (1862 PLN), but also by the unions (1970 PLN).
Recent years were a time of very dynamic minimum wage growth. Only in the period between 2007 and 2015, the minimum wage increased by 87 percent, while the average wage increased by 45 percent. Even in a nominal perspective, no Central European country has a higher minimum wage than Poland.
According to Employers of Poland, if the minimum wage continues to be increased at this rate, it may have a negative impact on the labour market as its value approaches – or, in the future, maybe even exceeds – the value of half the national average wage. Employers of Poland argue that an increasingly large group of employees will be exposed to the risk of being laid off, as the costs of their labour exceed their employers’ gains. Otherwise, continued employment would generate losses for the employer. As a consequence, rather than increase the wages of the worst-paid, the increase in minimum wages exposes them to unemployment and exclusion from the labour market.
Another possible consequence of a far-reaching increase in minimum wage is an increase in prices. If a given job is indispensable and may not be replaced with automatic labour, then the costs of increased wages will be borne by clients, whose relative purchasing power will, in turn, decrease.
It is worth noting that the new minimum per hour wage, which applies to the self-employed and those on contracts of order, will increase proportionately to the increase in monthly minimum wage. This means that on January 1st 2017, when it comes into force, it will be almost 13 PLN (12.97 PLN) instead of 12 PLN. Considerably increasing a rate which is not yet in force and the consequences of which are unknown is risky move.
Employers of Poland