EMPLOYER organisations slammed Labour Minister Sotiroulla Charalambous’ proposal to increase in the minimum wage, saying it would make life harder for already-ailing businesses.
The ministry’s order provides for the entry level wage to increase from €855 a month to €870. It also suggests that the minimum wage given after six months of service increases from €909 monthly to €924.
If approved by the cabinet, it will come into effect retroactively as of April 1.
The head of the Employers’ and Industrialists’ Federation OEV, Michalis Pilikos, yesterday said the decision would discourage businesses from employing new staff, making the problem with unemployment worse.
“We believe the Labour Minister’s suggestion is wrong, it is not justifiable at all considering the condition of the economy and it will not encourage many businesses to employ more staff, at a time when we speak of very high unemployment rates,” said Pilikos. “We could at least keep it at the same levels for 2012.”
The €15 increase in itself isn’t massive, said Pilikos. “But it is added to a chain of some other also small amounts that preceded it, in the form of taxes or one-off contributions, at a time when we are not doing well.”
He said Cyprus’ minimum wage was not to be laughed at, as it attracted many EU workers, especially from member states, which recently joined the Union where salaries are four to five times lower than in Cyprus.
Small shopkeepers union POVEK was equally disapproving.
“We are categorically against the Labour and Social Insurances Ministry’s proposal to increase the minimum wage for the fifth year running,” said POVEK.
It added that from €743 in 2008, the minimum wage increased by 25 per cent to €924 in 2012.
The association, small shops and thousands of shop owners are “certain this proposal will not solve any of the crisis’ problems, but exacerbate them further”, it added.
It called for POVEK to participate in the Labour Advisory Board, “so the voice of thousands of small businesses can be heard on matters and issues that involve them and for whom decisions are made without them”.
POVEK urged President Demetris Christofias and the cabinet to reject Charalambous’ proposal and re-examine it when the economic climate makes it more feasible.
But Charalambous yesterday said all factors had been taken into account when deciding the minimum wage with the Labour Advisory Board, adding that employers seemed to be forgetting the agreement signed between ministry, employers and trade unions to pay workers their Cost of Living Allowance (CoLA) as of January 1.
“The special agreement… stated that CoLA should be given for 2012 and 2013, but not pay rises,” the minister explained. “The CoLA for January 1, 2012, is 1.71 per cent – this is what the €15 represents. We are effectively trying to maintain the purchasing power of these workers’ wages.”
She added, “We took into consideration the condition of the economy, we also took into account the professions that are covered by the minimum wage order, we took into account the positions that were submitted by the sides during the dialogue”.
Source: Cyprus Mail