The Federation of Bosnia and Herzegovina's (FBiH) government decision to set the minimum wage at 1,000 BAM starting January 1 has elicited mixed reactions. While union representatives are pleased, experts and business leaders stress the need to reduce social contributions.
FBiH Prime Minister Nermin Niksic dismissed “populist” reactions, stating:
“For the Foreign Investors Council, which I greatly respect, my message is clear: investors who see a 1,000 BAM wage as a barrier should seek ‘banana’ republics where workers are paid a few hundred euros. Bosnia and Herzegovina aims for EU membership, and our actions will reflect that ambition”.
Economic expert and Party for BiH representative Admir Cavalic responded with criticism, comparing FBiH's wage policies to those of other countries, stating:
“The minimum gross wage in the ‘banana republic’ Czech Republic is 1,599.67 BAM. In the technological giant FBiH, it’s 1,744 BAM. What could go wrong?”
The Employers’ Association of FBiH criticized the decision arguing that it is a way to fill the budget, noting it bypassed prior consultations and lacked proper analysis.
“This decision was not on the agenda of the FBiH Economic and Social Council but was unexpectedly introduced under miscellaneous items during the first working session. It was adopted without a written proposal, analysis, or prior consultation with social partners, raising serious concerns about social dialogue and the formal legality of this decision.
The association proposed a compromise: a 1,000 BAM minimum wage, with 650 BAM taxed and the rest tax-free. It said that this proposal aimed to balance worker benefits with stable state contributions but was rejected, indicating a lack of constructive dialogue.
They warned that the 61.5% wage increase could significantly burden employers, forcing many companies to reduce staff or close, with severe economic consequences.
Unions, however, welcomed the decision, expressing hope that other wages would also increase.
“We expect this trend to raise all other wages as well,” said Selvedin Satorovic, president of the Union of Independent Trade Unions of Bosnia and Herzegovina (SSSBiH).
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