Slovenian Chamber of Commerce Proposes Linking Wages to Productivity

By , 07 Mar 2019, 18:00 PM Business
Slovenian Chamber of Commerce Proposes Linking Wages to Productivity eng.gzs.si

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STA, 6 March 2019 - The Chamber of Commerce and Industry (Gospodarska zbornica Slovenije - GZS) has proposed a reform of the pay system in the corporate sector for 2019-2025 centred around tying wage growth to productivity gains, echoing its long-standing position that pay should be more performance-based.

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Under the proposal unveiled on Wednesday, average gross wages would increase by nearly a quarter by 2025, provided that annual productivity gains almost doubled compared to 2014-2018, from 2.7% to 4.8%.

The goal of the proposal is to increase value added per employee to EUR 60,000 and exports to EUR 50bn. In that case, the average gross wage would be EUR 2,000, GZS director general Sonja Šmuc said.

Slovenia's exports amounted to EUR 31bn last year, the average private sector gross wage was at EUR 1,647 in December, whereas value added per employee was EUR 43,000 in 2017, the latest year for which data are available.

"Assuming appropriate productivity gains, the average gross wage could rise by EUR 370," GZS chief economist Bojan Ivanc said.

Related: Find out the average pay for various jobs in Slovenia

To achieve the required productivity gains, Slovenia has to step up investments in research and development and improve vocational education, according to Šmuc.

At the same time, wages in the public sector must grow at a slower pace than private sector pay, and the retirement age must gradually converge towards the EU average.

"It is time to talk about this now, not when we already have major problems funding pension," Ivanc pointed out.

The GZS has sent its proposal to all social partners and will now try to reach a consensus. Negotiations are expected to start next week.

Meanwhile, employers and trade unions have voiced reservations about the proposal. An exception is the ZSSS, Slovenia's biggest trade union confederation, which believes the goals could be reached.

Marjan Trobiš, the head of the Employers' Association, expressed surprise that the proposal was presented as having the backing of the entire business sector.

He said that his association had only gotten the text yesterday and had not yet had the chance to become fully acquainted with the document. He is also surprised that negotiations are to start as early as next week.

Igor Antauer, the secretary general of the Trade Crafts and Small Business Employers' Association, said that the proposal had not yet been coordinated among employers.

"It's a shame that somebody was in a hurry ... and that they did not check what would happen to all segments of the private sector not just the industries represented by the GZS."

Pergam trade union head Jakob Počivalšek said that the document was not aiming to raise salaries but to limit them and enable higher pay for managers.

Počivalšek said he was not against investing in R&D and training, but that the proposal provided no guarantees that this would actually be the case and the funds would not be spent on higher pay for top managers.

Lidija Jerkič, the head of the ZSSS, is not as critical. "These goals are nothing new. They can be reached but will require a restructuring of the industrial sector." She added that it was high time to reach an agreement on private sector pay.

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