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Planned minimum wage increase to hit SMEs sector hard

Planned minimum wage increase to hit small and medium businesses hard

12:53, 23.05.2024
  mz/rl;   TVP World, tvn24, biznes.gov.pl
Planned minimum wage increase to hit small and medium businesses hard A Family and Social Policy Ministry proposal to hike the minimum wage to 60 percent of the average salary has triggered alarm in the business sector, with one economist warning it could be “terrible” news for entrepreneurs.

A Family and Social Policy Ministry proposal to hike the minimum wage to 60 percent of the average salary has triggered alarm in the business sector, with one economist warning it could be “terrible” news for entrepreneurs.

Photo by Michal Fludra/NurPhoto via Getty Images
Photo by Michal Fludra/NurPhoto via Getty Images

Podziel się:   Więcej
If implemented, the project could see the minimum wage increase from the current level of 4,242 złoty (€994) a month to 5,150 złoty (€1,200) by 2025.

The ministry clarified that the minimum wage and hourly rate for 2025 will be set according to existing rules. Under an EU directive, member states must choose one or several “indicative reference values” for the minimum wage, such as 60% of the median wage or 50% of the average wage.

“The Ministry of Family, Labor, and Social Policy prefers to set the indicative reference value at 60% of the average wage,” the ministry said.

The ministry added that while this value serves as a guideline, it does not mandate an exact match in the minimum wage. The 60%, it continued, is a directional figure, encouraging progress towards it without enforcing a strict requirement.

But this has failed to allay fears that businesses will have to pay more. This could be especially hard for small firms that have been hit hard by increasing costs and high interest rates, which have left them with little financial wiggle room.

Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs, said that the plan could add an extra 850 złoty (€199), bringing the monthly minimum wage to 5,150 złoty gross (€1,200) by next year.

Sławomir Dudek, president and founder of the Institute of Public Finance, wrote on social media: “Well, entrepreneurs need to buckle up; the rollercoaster of setting the minimum wage has started with a kick. We have the first testing of public opinion, and it’s out of the cannon.”

In his view, if the ministry is indeed working on raising the minimum wage to 60% of the average salary, it could amount to “terrible” news for companies, as “policymakers are preparing a tsunami for entrepreneurs.”

All of this could be more unwelcome news for Polish firms.

According to Dun & Bradstreet Poland, a financial research firm, from the beginning of the year to mid-May, 90,600 businesses in Poland have suspended their operations, with fewer than 900 resuming. The rest remain suspended or have been removed from the registers.
źródło: TVP World, tvn24, biznes.gov.pl