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ISSUE 5
new mechanism for the valorization of the minimum wage, which should compensate for the mentioned abolition), are based on the Directive in the European Union. It has a clear objective: to ensure an adequate minimum wage for all workers in the EU, which should contribute to reducing working poverty, promote fair pay and strengthen collective bargaining. The implementation of these standards can bring many benefits, such as increasing economic stability and improving income equality. An important aspect is also the directive’s potential to contribute to equalizing pay between men and women, as women often work in low-income sectors and are thus more vulnerable to wage inequality. On the other hand, there are naturally also disadvantages in the form of increased labor costs, especially for small and medium-sized enterprises, which can lead to a reduction in employment or the transfer of production to other countries. The uniform nature of the directive, which is applicable for all EU Member States, may not factor in the significant economic differences between them. What constitutes a reasonable minimum wage in one country may not be sustainable in another and may instead lead to economic imbalances. If businesses pass on increased labor costs to consumers, the prices of goods and services may rise, which will naturally lead to inflation. This could subsequently reduce the purchasing
power of the very workers that the directive is supposed to protect.
Implementation of this directive will be challenging. It may increase the pressure on public finances in countries with significant social programs, which should not endanger our CEE region. Overall, this directive represents a significant step towards ensuring fair wages and reducing poverty, but its implementation is a delicate balancing act where the benefits must outweigh the potential economic risks, which may ultimately affect everyone from businesses to their employees. However, only the future can reveal how the whole situation will develop and what positive or negative impacts it will bring.
Author: Klára Cowan
Klára Cowan, Group Payroll Director for ASB Group , is a highly skilled professional who helps clients set up payroll processes, using benefits and issues related to HR. She is also responsible for ASB Group’s business development. Klára is a passionate advocate for the payroll industry, believing it deserves greater recognition for its vital role in managing sensitive information and personal data.
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