Lower wages and layoffs; Serbian economy in full-on crisis

The crisis has seriously affected Serbian companies financially. This has been confirmed by more than half of the national companies (54%) according to the latest research of the Serbian Employers’ Union and the International Labour Organization. As noted, small companies have the most problems, especially those with up to 10 employees.

Many of them have already reduced their salaries, usually between 10 and 20%, and some have had to opt for a more drastic cut, up to 30%. Many workers have been made redundant and, according to official figures, about 15,000 people lost their jobs in the period from March to mid-June. Redundancies are still in progress, very often for people with a fixed-term job contracts, and a new wave of wage cuts is expected from July.

The latest official figures show that wages are already lower compared to the pre-crisis period. Although salaries in the public sector have not been reduced, the average April salary is about 750 dinars below the March salary. This is due to the situation in the private sector and the introduction of emergency measures that have practically frozen the entire economy. The average salary in April was 58,932 dinars and the average salary in March was 59,681 dinars.

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“Those companies who had to lay off employees, have already done so. Now the key is to keep the skilled workers, because in a situation where you have lower earnings, the reduction of salaries may be a preferable solution to new layoffs,” says one company owner.

Some state measures, such as the disbursing three-month-worth of the minimum wage to companies, have certainly prevented a drastic drop in wages and avoided mass redundancies. The state will pay the last 30,000 dinars of the minimum wage on July 7, and this will be the key moment when a large number of companies will have much less money for payroll.

The question now is whether companies for which the state minimum wage was a part of the salary will be able to pay the full amount themselves in the future. An even bigger dilemma is what will happen to the workers for whom state aid represented the full salary, and there were many such workers in sectors such as commerce, catering, agriculture, production…

The automotive industry is also seriously affected. The management of Fiat Chrysler’s plant in Kragujevac had to take unpopular measures on several occasions, and due to the lack of work at the beginning of June decided to extend the forced holidays for almost 2,400 employees until 12 June.

The president of the Association of Free and Independent Trade Unions of Serbia (ASNS), Ranka Savić, says that the situation is not easy for workers or employers alike.

“Between 200 and 300 workers lose their jobs in Serbia a day. Most of them are people with fixed-term job contracts. The question is what will happen after the state disburses the last minimum wage, which concerns more than one million workers, Savic told Blic daily.

She also estimates that this crisis will be incomparably larger than forecast in March.

“Serbia is not an isolated island and is largely dependent on the EU; their crisis in production is also ours, which means lower wages and more layoffs,” the expert concluded.

(Blic, 30.06.2020)




This post is also available in: Italiano

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