The football business shows well how underestimating a well-performing and efficient player can bring other costs. The player may either simply leave for another team, or, if restricted with a contract – underperform to the level only required by the payment.
Wage debates are always heated, no matter if it is an employee asking their boss for a rise, or union negotiations. Anyway, in the past year or two, the wage question became one of the leading topics of public debate in Slovakia.
Prime Minister Jüri Ratas (Centre) has said that he does not have any red lines or issues on which it’s not possible to compromise. The fact that it’s possible to compromise on truly anything, including a lack of political responsibility, is confirmed by the actions of the current government on a weekly basis.
In Slovakia, the minimum wage has become a political evergreen of every autumn. However, its growth has been rapidly increasing in recent years. Moreover, the former Slovak prime minister has proposed a new law, which will set the minimum wage at 60% of an average wage of the previous year.
In Slovakia, non-monetary transfers are often forgotten due to the contributions system – this is set up so that only self-employed know, with exaggeration, how expensive it is. Most employees have no idea that the employer pays an additional 35% to their gross wage.
French President Emanuel Macron addressed the citizens of the EU is a special letter, entitled “For European renewal”, published simultaneously in select media in all member states. This move by Macron is not surprising.
The ruling politicians are unfortunately going in the opposite direction. While a person working for a minimum wage in 2015 paid 29% in taxes and levies, with the planned minimum wage, they will pay more than 40% next year.
Countries and organizations have often suggested ideas and changes based on the US economic/healthcare or educational system. Even though there are elements which we can learn from and desire to implement, some other parts of that system might seem much less attractive and desirable.
A minimum wage problem is a thought experiment that is not easy to comprehend. The fact is that people are different. Some people create enormous wealth and others do not produce much. If their added value or created wealth in a month does not reach the minimum wage, the government forbids them to work.