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15 minutes recalls that on Wednesday the government approved the state budget project for 2021. It also focuses on the monthly minimum wage (MMA), which should rise to € 35 “on paper”: from € 607 to € 642.
READ MORE: The government approves next year’s budget: budget deficit – 5%, but new taxes and the thirteenth pension are not yet planned
It is true that the government gave up the opportunity in December this year to reconsider the issue.
If the economic forecasts of the Ministry of Finance in December are worse than in autumn, the Tripartite Council will have until December 11 to issue a new recommendation.
It would be reconsidered if the projected unemployment rate in 2021 was above 8.5% and average wage growth was less than 2%.
MMA raising for business will unleash at least $ 65 million. euros
However, companies have traditionally been unhappy with this and believe that given the current economic uncertainty, wage increases should be avoided. Andrius Romanovskis, president of the Lithuanian Business Confederation (LVK), estimates that this increase in the minimum wage for companies will cost 65 million. euros.
“The monthly minimum wage is a tax. The state says: the employer pays. During today’s meeting of the Government of the Republic of Lithuania, Finance Minister Vilius Šapoka said that raising the MMA would cost the state 13 million LTL. 20,000 budget workers. The remaining 100,000 MMA will have to increase their activity. The price, according to my calculations, is 65 million euros. Whenever the pandemic affected more, those whose wage costs are attributable to the MMA, on January 1. will receive a “Christmas” gift, wrote the president of LVK on Facebook.
A.Romanovskis 15 minutes He said that not all employers would start raising wages but would simply lay off some employees or change their working conditions.
“In aviation, for example, everything came to a halt and there was a choice to lay off everyone or stay through service contracts – individual activities. But when it comes to layoffs, small and medium-sized businesses will be hit the hardest. It will be a cost and everything for large manufacturers or large companies ”, he is convinced.
Photo by Luke April / 15 minutes / Andrius Romanovskis
In addition, A. Romanovskis noted that by increasing the minimum wage, employers will be forced to increase wages and those who earn a little more.
“The multiplier effect far exceeds 65 million. Of course, if a person’s salary is 1000 euros, the change in the minimum wage does not affect him. But if he is in the field of low income, the employer must raise the salary not only to the one who earns the minimum, but also to the other. Then he calculates if he can do it. ” 15 minutes he said.
State institutions criticized
Romanas Motiekaitis, director of the cleaning services company Ideali švara, also negatively assessed such a government move. In his opinion, it is not the minimum wage that should be increased, but the personal income tax (PIT) that should be reduced.
“It just came to our knowledge then. Automatically, this is the key as profits increase. There is a floor called ‘Sodra’, which also rises. We did not raise the price of the service, but here it increases. The state itself does not know what he is doing “. 15 minutes he said.
R. Motiekaitis assured that raising the MMA by 35 euros would have a significant impact on the company. He also had comments for the public sector.
“The price of the service is not increasing, therefore it is very difficult to increase (salaries, Aut. Past). Everybody wants cheaper. The state also offers offers at the lowest price. What is it? This is a tragedy, especially in cleaning jobs. If there was no “Sodra” floor, then I still understand, Bala has not seen, you can talk to customers.
But now it automatically increases here, the “floor” also increases, the employer has to pay for the one who does not work full time. Va is the problem here, nobody thinks about it and shows it to everyone equally. The government itself is pushing not to clean every day, to reduce working hours. And who will pay for it? “, I ask.
123RF.com nuotr./Valymas
According to R. Motiekaitis, the company is currently in equilibrium “on the brink”.
“At the beginning, the turnover was significantly reduced, now it has normalized to the previous situation. But now it will fall again a little bit, because everyone will close a little bit, they will stop working ”, the interlocutor is convinced.
According to Sodra, Ideali Švara employs 50 people and in August 2020, the median salary was 342.01 euros.
It will raise the prices of services, waiting for a wave of customer bankruptcies
Arūnas Jaseliūnas, general manager of Ainava, who is also engaged in cleaning services, also negatively assessed the government’s desire to increase MMA. He said this is not the best time to do it.
“Cleaning services are always minimal and we have to raise prices every year, which annoys our clients and is a great inconvenience for us to rewrite a thousand contracts. That minimum is less likely to increase, but more. This would be much easier, as the company has a lot of technical work to do. ” 15 minutes I speak.
According to A.Jaseliūnas, the competition between cleaning services companies is enormous and each one of them fears raising the prices of services. Furthermore, he said, the company has yet to return to the pre-quarantine period.
“The turnover is not what it was yet, it is not that the business is going through the best moments. We were hoping there would be no minimal increase this year, but the party wants to please the people. This is not to say that it is an electoral stunt, but he could have sustained it this year. It is not clear what will happen and it is not clear what times lie ahead. The fact that there are bankruptcies in the business, some of our clients go bankrupt and that will also affect us ”, he is convinced.
123RF.com nuotr./Atlyginimas
I.Ruginienė: companies say the same thing every year
Inga Ruginienė, president of the Lithuanian Trade Union Confederation (LPSK), was skeptical of commercial statements that due to the current situation, pay should not be increased next year. According to her, the businessmen repeated this last year, when the country’s economic situation was extremely good.
“It’s the same thing again today, and to the extent that I’m involved in the minimum wage debate, businesses talk absolutely the same thing,” she said.
Josvydo Elinsko / 15min nuotr./Inga Ruginienė
According to I.Ruginienė, economists should be listened to more and if they see opportunities to increase MMAs next year then they should be taken into account.
“All the more because the formula was agreed in the Tripartite Council. We have said that we will not politicize, we will turn this issue into a simple mathematical calculation, and as a confederation we have done it. We see an opportunity to go up to 663 next year,” said the interlocutor.
In the national tripartite agreement it was agreed that the MMA in Lithuania cannot be less than 45%. average salary and more than 50 percent. average salary.
It is true that the Government gave up the opportunity to reconsider the size in December this year, and this, according to I. Ruginienė, is quite doubtful. The interlocutor assured that back in June of this year, LPSK agreed to postpone the issue of raising the minimum wage until September, because they wanted to see what the economic forecasts would be.
“It just came to our notice then. The month of September came and we saw that nothing had changed, the indicators were only improving and we calculated accordingly. What is the purpose of raising again? Employers expect another government and a sudden change in economic forecasts? Will it be favorable and what they need, and then it will be easier to adjust that number? If that’s the reason, it could be, “summarized I. Ruginienė.
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