Piletić: The minimum wage will rise to 1250 euros gross by 2028

The minimum wage in Croatia will rise to 1250 euros gross by 2028, announced the Minister of Labor, Pension System, Family and Social Policy, Marin Piletić, at the 17th Lider Conference Day of Big Plans. The government has received a third consecutive mandate from Croatian citizens based on what it promised them, so employers will have to factor in this cost in the future.

The minimum wage is 970 euros gross this year, and it has increased over the last two years. Compared to Slovenia, in 2016 we were at 73 percent of the Slovenian average wage and 52 percent of the minimum wage. Today it is 75 percent, while the average is 90 percent.

The labor market is better than ever, with 73 thousand unemployed, compared to 180 thousand during the first mandate of the HDZ government, while there are 1.8 million employed. He believes that the wages in recent years are a source of pride for everyone, as the average wage has increased from 750 euros about ten years ago to 1400 euros last month.

He added that the Croatian Employment Service (HZZ) allocates 180 million euros annually to stimulate the labor market through various programs.

– When we talked about increasing the minimum wage last year, employers requested compensatory measures, which were provided by the HZZ. However, the interest was negligible, with funding requested for only 6000 workers.

Regarding labor legislation, at the request of employers, the control of the application of collective agreements will be strengthened to prevent unfair competition. With the establishment of the e-collective database, 65 percent of workers in Croatia are covered by collective agreements, which is also an increase in recent years. He added that by the end of August this year, the number of issued work permits for foreigners decreased by 13 percent, while a trend of extending permits was observed at 20 percent.

Where will we be in ’41?

Economic growth has not stopped despite Robert Gordon’s claim on October 16, 1973, that it had. Velibor Mačkić, envoy of the President of the Republic of Croatia and special advisor for economics, reminded of his words, adding that it has not stopped due to technological advancement. He also spoke about the polarizations in our, as well as in the global society, and how this affects the economy.

– We must ask ourselves where we will be in about 15 years, what our vision is. We are growing, but we need to know what we want. We need to see what the economy on the periphery can do. For example, one of the measures might be to facilitate enrollment for foreigners in our universities. Not only to have potential experts, but they could also work jobs for which we import labor during their studies – said Mačkić.

According to him, for balance in political and economic life, it is important what the institutions are like, how we stand with innovations and investments. None of the listed factors in our country is commendable. We must already ask ourselves where we will be in ’41, i.e., in 16 years.

Despite this, the economy is in full swing, said Matej Bule, chief advisor to the Minister of Finance. The growth model is stable and sustainable. Before the financial crisis in 2009, it was based on budget deficits and foreign trade exchanges, and today it is decreasing. Moreover, we have had a budget surplus since 2014, as well as surpluses in commodity exchange, thanks to EU membership.

– Croatia is a leader in drawing European funds, unlike ten years ago when we poorly drew money – said Bule.

Regarding fiscal and administrative relief, in the last ten years, employers have been relieved by 2.3 billion euros.

He also spoke about the main determinants of the last round of tax reform aimed at digitalization, modernization, and innovation.

The Central Population Register is a strategic project, and thanks to it, it will be possible to maintain a unique electronic record of work and records of inactive persons. An acceleration of the probate process is also expected, and analyses of the labor market, calculations of the development index, and the shaping of regional development policies will be prepared, as well as the implementation of social policy measures. He particularly emphasized the upcoming changes in fiscalization 2.0, from which both the state and employers will benefit in the long term.