Event Title

The Impact of Minimum Wage on Social Schemes - The Case of Kosovo

Session

Management, Business and Economics

Description

Setting the minimum wage is a legal responsibility, which must be accompanied by a Government Decision, based on a proposal from the Economic and Social Council (SEC).

So the important issue is estimating how much it should be? It is estimated by many studies that a minimum wage at a level higher than 60% of the average wage, causes serious negative effects in terms of price increases and job cuts. Currently in Kosovo, the minimum wage of 170 euros, over the age of 35 is at the level of 36.50% of the average wage of 466 euros per month in 2020, published by KAS. While the salary of 130 euros is as much as 27.90% of the average salary. If the level of 60% of the average salary was taken, then the minimum wage in Kosovo should be 280 Euros.

The decision on the minimum wage, in a chain, also affects the categories of citizens involved in social schemes (war veterans, families without employees, etc.). The dilemmas about the budget burden, informal employment and the effect it has on social schemes have created an illegal situation for more than a decade regarding the implementation of the Labor Law. Minimum wage setting (MW) has been used as an important policy instrument used by governments to stabilize the labor market and also to improve working conditions. There has consistently been debate about the impact of the minimum wage, while poor quality enforcement has been repeatedly cited as a major challenge.

Keywords:

Minimum Wage, Average Wage, Labor Law, Kosovo.

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-550-47-5

Location

UBT Kampus, Lipjan

Start Date

30-10-2021 12:00 AM

End Date

30-10-2021 12:00 AM

DOI

10.33107/ubt-ic.2021.523

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Oct 30th, 12:00 AM Oct 30th, 12:00 AM

The Impact of Minimum Wage on Social Schemes - The Case of Kosovo

UBT Kampus, Lipjan

Setting the minimum wage is a legal responsibility, which must be accompanied by a Government Decision, based on a proposal from the Economic and Social Council (SEC).

So the important issue is estimating how much it should be? It is estimated by many studies that a minimum wage at a level higher than 60% of the average wage, causes serious negative effects in terms of price increases and job cuts. Currently in Kosovo, the minimum wage of 170 euros, over the age of 35 is at the level of 36.50% of the average wage of 466 euros per month in 2020, published by KAS. While the salary of 130 euros is as much as 27.90% of the average salary. If the level of 60% of the average salary was taken, then the minimum wage in Kosovo should be 280 Euros.

The decision on the minimum wage, in a chain, also affects the categories of citizens involved in social schemes (war veterans, families without employees, etc.). The dilemmas about the budget burden, informal employment and the effect it has on social schemes have created an illegal situation for more than a decade regarding the implementation of the Labor Law. Minimum wage setting (MW) has been used as an important policy instrument used by governments to stabilize the labor market and also to improve working conditions. There has consistently been debate about the impact of the minimum wage, while poor quality enforcement has been repeatedly cited as a major challenge.