minimum wage increase

Minimum wage increase sparks concern among SMEs over margins, layoffs and pricing

The announcement of a forthcoming minimum wage increase has reignited debate over labour-cost sustainability in Serbia’s SME-dominated economy. While higher wages are politically and socially popular, their economic transmission is uneven — particularly in sectors with limited pricing power and thin margins. For many small and medium-sized enterprises, labour costs already represent a disproportionate share of operating expenses. An abrupt increase in minimum wages compresses margins unless offset by productivity gains, price increases, or cost reductions elsewhere. In practice, many…