The minimum monthly wage in Slovakia will increase from €520 to €580 starting in January, it was decided by the government on Wednesday. The lowest gross earnings for each hour worked will rise to €3,333 from the current €2,989. The monthly net income of an employee working for minimum wage will thus increase by €46.39 to €476.39. The Ministry of Labour estimates that the wages of about 191,000 employees will increase as a result of the legislation. The ministry proposed the current wage hike in the wake of failed negotiations between employers and labour unionists over the summer. "Employers wanted less, unionists more," said Labour Minister Ján Richter in September, after the Confederation of Trade Unions advocated a new minimum wage of €607.80 and employers demanded one of €552.20. The figure of €580 approved by the government on Wednesday was thus seen as a compromise.
Not all stakeholders approve, however. According to the Slovak Central Bank (NBS), raising the minimum wage to €580 is a significant increase - the highest in the past 17 years - that could negatively affect employment developments as well as jeopardize competitiveness, especially in regions with higher unemployment and lower wage levels. During the period when the proposal was under consideration, the central bank also pointed out that the current slowdown in Slovakia's GDP growth and the deepening of negative risks must also be taken into account. "In such an environment," said the central bank in its written comments, "a significant increase in the minimum wage could further reduce economic development." The Labour Ministry, however, has disputed the central bank's claims. "The increase in the minimum wage in recent years has not had a negative effect on the unemployment rate. Forecasts of economic development were taken into account when proposing the amount of the new minimum wage," said the Ministry.
