Cyprus Mail

Discussion kicks off on minimum wage

Lawmakers and trade unions on Tuesday began discussing various proposals for the establishment of a national minimum wage, ostensibly aimed at raising people’s living standards.

Three separate bills have been tabled to the House labour committee, while the government said it is initiating studies – with technical support from the EU – on designing a viable minimum wage policy.
The studies should be completed around November 2019, the labour ministry’s permanent secretary Christos Malikkides told MPs.

He recalled that President Nicos Anastasiades, as part of his 2018 election plank, had pledged that once employment was restored to pre-crisis levels of under 5 per cent, the government would discuss with employers’ organisations the possibility of setting a minimum wage for all professions.

The unemployment rate currently stands at 7.4 per cent.

In parliament, left-leaning trade union PEO called for a statutory minimum wage but qualified that it should apply solely to those working in sectors not covered by collective bargaining.

The syndicate said the 2013 crisis has led to an even greater transfer of wealth from the poor to the rich, adding that employers have taken advantage of suppressed wages to exploit their workers.

It went on to warn that “if the situation remains unchanged, the clear undermining of social cohesion could lead to social alienation and turmoil.”

In a statement, the Citizens Alliance cited a series of data to demonstrate how the vast majority are not reaping the benefits of the economic recovery.

It said the financial crisis has hit the private sector the hardest, both in terms of lower salaries and in terms of loss of jobs.

The Citizens Alliance deployed its main talking point: the two-tier system of employees.

In the public sector, the lowest pay scale (A1) starts at €1,100. The party said that the gap between the mean salary in the public sector and the mean salary in the private sector was over €1,000.

“We believe this social injustice should cease to exist,” it said.

In 2017, the party added, the state set €724 as the poverty line, whereas currently 11 per cent of gainfully employed persons receive wages ranging from €500 to €700.

The Citizens Alliance called for a swift solution, arguing that a ‘structured dialogue’ with stakeholders – as demanded by trade unions – could take years.

About 75 per cent of employed people in Cyprus are not covered by collective bargaining agreements, it noted.

The party also dismissed concerns that setting a minimum wage would increase unemployment.

It said that the experience of Germany has disproved this claim. Two years ago, Germany introduced minimum wage laws, but the measure did not lead to joblessness as feared.

Cyprus does not have a minimum wage law. It does have a minimum wage requirement for certain occupations, which is revised annually by a cabinet decree that comes into force on April 1 each year.

A minimum wage rate or €870 per month is required for shop assistants, nurses’ assistants, clerks, hairdressers and nursery assistants.

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