Negotiations on increasing the minimum wage in Serbia have officially begun, with the Ministry of Finance proposing a two-stage raise that would bring the minimum wage to around 550 euros starting January 1. Both employers and unions have expressed cautious optimism, but underline several challenges ahead.
Ljiljana Pavlović from the Union of Employers of Serbia explains that while most employers agree there is room for a wage increase, this must be accompanied by adequate government support. Employers highlight high business costs, especially related to wages, as a major obstacle. Small businesses, in particular, feel less benefit from recent tax relief measures, which tend to favor larger companies. Some employers have suggested that the minimum wage itself should be exempt from taxation to lessen the financial burden.
From the union side, Aleksandar Radojević of the Association of Independent Trade Unions welcomes the news but points out that the raise will mostly benefit vulnerable workers and the public sector, where wage growth often lags behind that of professional roles. He also emphasizes that the minimum wage should not be used as the sole benchmark for salaries, advocating instead for attention to the average wage. Radojević warns that public sector employees may experience the smallest relative increase, which could deepen wage disparities.
The increase in the minimum wage is expected to push up wages throughout companies, especially for low-skilled workers who often earn the lowest salaries. However, many employers report difficulty in financing wage increases for all employees without state assistance.
Snežana Radukić, an economics professor from the Faculty of Economics in Niš, notes that negotiations between unions and employers are complicated by differing approaches to determining minimum wage levels. Unions argue for a wage tied to the consumer basket to protect living standards, while employers call for increases aligned with economic realities such as GDP growth and inflation. Radukić cautions about the risk of “monetary illusion,” where nominal wage increases do not translate into real purchasing power due to inflation. She stresses that wage growth must be realistic and sustainable within the economy’s capacity. The government’s role, she says, is to act as a neutral mediator protecting the interests of both employers and workers.
Currently, more than half of the minimum wage in Serbia is spent on basic necessities like food and utilities, highlighting the urgency of raising wages to improve living standards. The outcome of these negotiations will be crucial for many workers who struggle to cover essential expenses.
