Minister says ‘golden balance’ found on minimum wage rise

Labour Minister Marinos Mousiouttas said on Friday that the government had struck a “golden balance” on the increase to the national minimum wage, which will apply for the next two years, responding to criticism voiced by social partners.

Trade unions said in a joint statement that the level of the minimum wage decided does not help reduce inequalities, while the employers and industrialists’ federation Oev warned that for some businesses the increase could raise issues of sustainability or be passed on to consumers through higher prices.

Asked to comment on the reactions, Mousiouttas told the Cyprus News Agency that the opposing responses “reflect the differing philosophies of each side. Employers argue that profitability will be affected, while unions maintain that the increase falls short of what should have been granted.”

He explained that preparatory work had been carried out by a technical committee comprised of employers, trade unions and government representatives.

“The committee submitted its final recommendation based on technocratic analysis that took into account the sharply opposing views of the two sides,” the minister said.

According to the data examined, the committee “proposed a range of €1,077 to €1,115 for the minimum wage after six months of employment and €969 to €1,003 for the initial minimum wage.”

Mousiouttas said he then held an additional round of consultations with the leaderships of all organisations involved, concluding that €1,088 after six months and €979 as the starting minimum wage represented the most appropriate solution.

He acknowledged that neither side would be fully satisfied, but said this “demonstrated that the decision was not biased in favour of either employers or workers.”

He stressed that the primary considerations were preserving labour peace, improving the living standards of low-paid workers and, at the same time, ensuring that the increase would not pose a risk to business activity.

“We believe we have found the golden balance, which will apply for the next two years,” he said.

The minister added that the technical committee will continue its work in the new year, with a two-year horizon to examine all aspects of the issue.

These include “concerns raised by both unions and employers, such as the hourly calculation of the minimum wage and other matters that could not be discussed in depth within the short time we had to announce the minimum wage.”

Asked whether the ministry is carrying out checks to ensure proper implementation of the minimum wage, Mousiouttas said inspections are conducted daily, not only for this legislation but also for undeclared work and other labour laws.

He noted that inspections by the ministry’s inspection service have increased – as have complaints – and said compliance with the law is pursued in all cases.

On the long-standing union demand for an hourly minimum wage rate, Mousiouttas said this issue had been on the table for some time but could not be addressed immediately due to time constraints.

“I made it clear to everyone that due to the short time frame and the fact that it has not been processed by the technical committee, this topic will be discussed at the start of the new year.”

The minister also said he had proposed that the Labour Advisory Board “meet on a regular basis with a set agenda, allowing social partners to exchange views and submit proposals from an early stage.”

Such dialogue, he said, “helps lead to more widely accepted decisions,” adding that this proposal was received positively by all those involved.

Looking ahead to the new year, Mousiouttas said his ministry’s main challenge will be pension reform. He noted that preparatory work is under way, though discussions are still at an early stage.

Talks on the different phases of the reform will begin through the Labour Advisory Board.

He pointed out that the last major pension reform was carried out in 1981 and said the new reform will aim to address existing distortions while increasing pensions to improve citizens’ living standards.