Page 58

GRANT

journal

ISSN 1805-062X, 1805-0638 (online), ETTN 072-11-00002-09-4

EUROPEAN GRANT PROJECTS | RESULTS | RESEARCH & DEVELOPMENT | SCIENCE

The government decides on the definitive amount for the following
calendar year no later than on 20 October. The resolution of the
government on a change in the minimum wage is published in the
Code of Laws of the Slovak Republic no later than by 1 November
of the calendar year of the year preceding that for which the
minimum wage is set. At the same time, legislation sets the equation
which is used to calculate minimum wage growth for the following
calendar year – this is set at least in the amount of the product of the
minimum wage valid in the current calendar year and an index of
year-on-year growth of the average monthly nominal wage of an
employee in the Slovak Republic for the preceding calendar year.
This data is published by the Statistical Office of the Slovak
Republic. We identify with the opinion of several economists

(Staněk, Chovanculiak, Kubová) that the minimum wage is a purely
political category. Its increasing has nothing in common with
economic reality. It would be more suitable to return to the idea
from the 1990s about an automatic mechanism for setting the
minimum wage on the basis of development of relevant statistical
indicators, e.g. the average wage and inflation.

Data on the amount of the minimum wage for the monitored period
between 2008 and 2019, are presented in Table 3.

Table 3 Development of the minimum wage in the Slovak Republic
between 2008 – 2019

YEAR

MW (€) YC (€) YC (%)

MW/AV

(%)

CPI
(%)

2008

268.87

37.19

4.6

2009

295.5

26.63

9.01

39.69

1.62

2010

307.7

12.2

3.96

40.01

0.96

2011

317

9.3

2.93

40.33

3.92

2012

327.2

10.2

3.12

40.65

3.61

2013

337.7

10.5

3.11

40.98

1.4

2014

352

14.3

4.06

41.03

-0.08

2015

380

7.37

43.04

-0.33

2016

405

6.17

44.41

-0.52

2017

435

6.9

45.6

1.31

2018

480

9.38

47.38

2.51

2019

520

7.7

48.92

2.24

Source: own processing based on the Statistical Office of the Slovak
Republic
where:
MW — minimum wage
YC — year-on-year change
MW/AW — share of the minimum wage in the average wage
CPI — consumer price index.

The minimum wage set from October 2007 was valid until the end
of 2008. As we can see in Table 3, the minimum wage was
subsequently raised only from 1 January 2009. For this reason its
level was the same in 2007 and 2008, that is, the year-on-year rise
was at 0%. In 2009, after the introduction of the euro currency, the
minimum wage grew by 9.01% (26.63 €). After the outbreak of the
global financial crisis, it was raised in 2010 by only 3.96% (12.20
€). After parliamentary elections in 2010 right-wing parties came to
power, which predicated changes in the business environment and
an effort to change the labour code. We can monitor the greatest
growth in 2018, when versus 2017 it increased by 9.38% (45 €),
which represents 44% (211.13 €) growth compared with 2008. For
2019 the minimum wage is set at 520 €, which represents 7.7% (40
€) growth versus the preceding year. Over the past 10 years the
minimum wage has grown by 251.13 €. Opinions differ on the
increasing of the minimum wage. While trade unionists promote the
growth of the minimum wage, employers asked that it not be raised

or only by a lower amount. If we compare the growth of the
minimum wage with the development of inflation, we find that
minimum wage growth has not copied inflation developments over
the whole period covered. Over the monitored 10-year period only
in the post-crisis years of 2011-2012 was year-on-year growth in the
minimum wage lower than the year-on-year rise in inflation; the
opposite trend in favour of minimum wage growth was recorded
from 2014 up to the present.

The greatest difference was in 2018, when year-on-year growth in
the minimum wage was 9.38% and inflation was on a level of
2.51%. When monitoring the development of the minimum wage
determining its share in the average wage in the economy is an
important aspect. On the basis of recommendations of the European
Committee of Social Rights, the minimum wage should achieve at
least 60% of the average wage in a national economy; without the
existence of such a guarantee there is the danger of generating a
higher risk of working poverty and its dependence on the social
system. When monitoring the share of minimum wage in the
average wage from Table 3, we can say that the minimum wage
achieves approximately 40% of the average wage for almost the
whole monitored period. The lowest value for the share of the
minimum wage in the average wage in Slovakia occurred in 2008, at
37.19%. In 2004 it had the highest share in the average wage – at
41.10% – when the average wage was higher than the minimum
wage by 309.24 €. For recent years the value of the share has
oscillated around 40% and only in 2018 did it reach 47%. In 2019
the share of the minimum wage in the average wage is expected to
be 49%. The share is approaching the recommended value, and in
recent years the dynamic pace of growth in the minimum wage in
Slovakia has been faster than the year-on-year growth in average
wages. For a comparison, we present in the following Table 4 the
percentage share of the minimum wage in the average wage in 2018
in the selected countries of European Union.

Table 4 Comparison of the share MW/AW in selected EU member
states in 2018

Minimum

wage (€)

Average
wage (€)

Share of

MW/AW

(%)

Germany

1,498

3,775

39.68

France

1,498

3,200

46.81

Luxembourg

1,999

4,682

42.7

Belgium

1,563

3,949

39.58

Netherlands

1,614

4,164

38.76

Slovakia

480

1,013

47.38

Czech

Republic

479

1,141

41.98

Source: own processing based on Eurostat

From Table 4 it is evident that France had the highest share of
minimum wage in the average gross monthly wage. In Germany,
Belgium and the Netherlands the percentage share of the minimum
wage in the average wage moved around 39%. Likewise, the Czech
Republic and Luxembourg had a similar percentage share, and the
amount of minimum and average wage in Luxembourg is
approximately 4 times higher than in the Czech Republic. According
to economist R. Sulík (TASR, 2017) no country in the EU has a
minimum wage on the level of 60%, and he is convinced that if such
an obligation exists, then it is a bad one and it’s necessary to cancel
it. At the same time he warned that many other parameters, for
example, bankruptcy proceedings or bonuses for local councillors,
are linked to the minimum wage. He also pointed out that a
minimum wage cannot be raised by 15%, because this causes great
financial problems for employers. The analyst Chovanculiak
(TASR, 2017) says that increasing the minimum wage by more than

Vol. 9, Issue 1