The National Minimum Wage (NMW) is not a tool for exercising social policy. It is the minimum wage with which any person over the age of 15 must be paid, regardless of qualifications, experience and abilities.
The Council of Ministers decided on an 8.8% increase in the country’s existing minimum wage – a percentage that raises the NMW to 58% of the National Median Wage, while the corresponding percentages are 48% in the Netherlands, 51% in Germany and 54% in Luxembourg. Obviously some people believe that the Cypriot economy is stronger than the EU’s largest economies.
The intensity of this increase will push up reflexes and almost automatically a huge range of wages.
This will have a twofold effect: On the one hand, those businesses that cannot pass on the disproportionate additional costs to their prices, will be called upon to manage issues of robustness and possibly viability.
On the other hand, those who can, will pass it on to the prices of their products and services, inevitably causing inflationary pressures, with a negative impact on the real incomes of all workers and with unpleasant consequences on the competitiveness of the national economy as a whole.
The Federation of Employers and Industrialists (OEB) will closely monitor the macroeconomic impact of this unprecedented increase in the National Minimum Wage.
