Serbia has established the minimum wage for 2025 at 53,592 RSD, reflecting a 13.7% increase from the current rate. This decision comes after intense negotiations led by Miloš Miljković from the “Nezavisnost” union, who stated that this amount represents the maximum achievable outcome. Professor Milojko Arsić from the Faculty of Economics in Belgrade expressed concerns that such a substantial increase may not be sustainable in the long run.
The new minimum wage of 53,592 RSD will cover the minimum consumption basket, which amounts to 53,000 RSD. Unions, including “Nezavisnost” and the Union of Autonomous Trade Unions of Serbia, had pushed for a minimum wage of 61,858 RSD. Prime Minister Vučević highlighted that this decision is the first in six years to be made through dialogue within the Social Economic Council (SES) rather than through unilateral government action. In euro terms, the minimum wage now exceeds 450 euros. The debate continues about whether this figure represents the upper limit of negotiations and why more could not be achieved.
Miljković explained, “At this stage, this was the maximum we could secure. Negotiations imply that these are not the final positions of all parties involved, and compromises were expected. We had a limit, which was aligning the minimum wage with the minimum consumption basket. This was the red line that couldn’t be crossed.”
He added, “While we reached our goal from last year, there is no room for celebration. This sets a solid foundation for future negotiations. Our target is to reach 650 euros by 2027.”
Miljković noted that with an increase of 8 to 10 percent, the target would have been unfeasible, but with the current increase of nearly 14 percent, it is attainable.
However, Professor Arsić cautioned that a 14 percent increase should not become the standard due to economic sustainability concerns. He said, “We need to assess the minimum wage from both the perspective of workers living on it and the economy’s ability to support it. The minimum wage in Serbia is relatively high compared to the EU, falling into the upper third when compared to other European countries.”
Arsić stressed the importance of creating economic conditions that ensure high productivity and added value at work. He said, “In Europe, wages are rising quickly due to a labor shortage, both in Serbia and the EU. I estimate that such a large increase will not be sustainable. If wages grow faster than the four percent economic growth, it could lead to higher prices due to increased wage costs. This is partially happening in Europe, where wage growth exceeds production.”
He mentioned that wages sometimes grow faster than production, leading to a redistribution of income from employers to employees, which may have been necessary for Serbia. However, such a trend cannot continue indefinitely, he warned.
Regarding the feasibility of a 650 euro minimum wage by 2027, Arsić expressed doubts. “While measuring in euros is less significant as prices are rising, the key is how purchasing power increases. Over the past 25 years, Serbia has experienced significant wage growth, but this growth has not been consistent. Currently, a four percent annual wage increase relative to economic growth seems realistic.”
Miljković revealed that the unions’ target of 61,000 RSD was based on analyses and the European Commission’s directive, which suggests aligning minimum wages within the range of 50 to 60 percent of the average net wage. With the average net wage at slightly above 96,000 RSD, the unions’ demand represents about 55 percent of the average net wage.
Miljković also noted that around 114,000 people currently receive the minimum wage, although this number might be slightly higher. Many who earn just above the minimum wage are not included in this count. With a median wage of 74,000 RSD and a total workforce of 2.4 million, approximately 1.2 million people earn up to 74,000 RSD. He emphasized the need to focus on increasing other wages rather than celebrating the current adjustment.
He criticized the widespread practice of paying only the minimum wage even when employers are financially stable, contrary to the legal requirement that the minimum wage should apply only in cases of financial difficulty.
Professor Arsić described the alignment of the minimum wage with the minimum consumption basket as a “symbolic result.” He stressed that this change will impact only a limited number of people, while overall wage levels are influenced by labor market conditions. The government needs to create an environment conducive to increasing average wages.
The Union of Trade Unions of Serbia “Sloga” condemned the minimum wage agreement for 2025 as a “shameful act” and a surrender by the unions involved in the SES. “I can’t help but laugh at this. As a union, we do not comment on the actions of other unions. However, those who, along with employers, particularly in state companies, work to undermine the ‘Nezavisnost’ union are criticizing us. They think we’re unaware,” Miljković responded.
