"We will endorse a decision that will increase the minimum wage which currently amounts to HRK 2,752 net, to HRK 3,000 net. This is an increase of HRK 248 or nine percent compared to 2018. The gross amount that today totals HRK 3,440 will be HRK 3,750, an increase of HRK 310," Plenkovic said.
Highest one-off increase of minimum wage since 2008
This is the highest one-off increase of the minimum wage since 2008, the prime minister underscored.
Expressed in euros, following the increase the minimum wage will amount to 404 euro net or 505 gross.
Compared to other countries in central and eastern Europe, Plenkovic noted that according to Eurostat figures from July, Croatia's minimum gross wage amounted to 464 euro and was even then higher than in Bulgaria (261 euro), Lithuania (400 euro), Romania (407 euro), Latvia (430 euro) and Hungary (445 euro).
After this increase the minimum wage in Croatia will as of the New Year be higher than in the Cezch Republic (469 euro), Slovakia and Poland (480 euro) and Estonia (500 euro).
About 37,000 people earn minimum wage
Plenkovic noted that according to the Labour and Pension System Ministry's data, about 37,000 people are currently earning a minimum wage.
He recalled that in the first two years of this government's term, the minimum wage was increased twice by five percent, which cumulatively amounts to 10.25%, with an additional 3.3% increase after excluding overtime, Sunday and public holiday hours.
"Prior to that, it was increased during our term by 13.6% compared to 2016. That was the biggest increase until now and with this increase that will mean a total net increase of the net minimum wage during our term of HRK 504 and that is 23.9%," the prime minister underscored.
He noted that the share of the gross minimum wage in the average wage will increase significantly in 2019 to 44.85%.
Compensatory measures for employers
Plenkovic underscored that this measure takes employers into account. Certain compensatory measures are foreseen because the government doesn't want the challenge of increasing labour costs to lead to negative consequences for workers or their employers.
"The minimum wage is usually paid in the textile, timber, leather and metal industries and as such in 2019 we will retain the reduced base wage to calculate contributions by 50% for those workers who were paid a minimum wage in 208 and in 2020, those reliefs will be reduced by one half," he underscored.
In addition to fiscal breaks, the government has prepared a set of measures to preserve jobs and that means that next year we will enable the use of up to HRK 1.5 million in support and in 2020 that support will be even greater in an effort to save jobs and open new ones.
GDP growth based on sound basis
Plenkovic recalled that the 2.8% increase in Gross Domestic Product (GDP) meant that it had grown for the 17th consecutive quarter and that the growth was based on sound foundations, on growing exports and investments.
"We think that the GDP growth, which has continued for 17 quarters in a row is a good signal. Figures that relate to the export of goods and services are also good -- with exports increasing by 5.2% and services by 2.5% while investments have grown for the 15th consecutive quarter," he said.
With regard to industrial production falling after a long period, Plenkovic said that the government has think about consolidating production and exports.
Text: Hina