News Local Minimum wage proposal goes to House committee

Minimum wage proposal goes to House committee

The Citizens’ Alliance is proposing a monthly minimum wage of €1,125 and a minimum hourly rate of €8 for all employees.

The minimum monthly wage currently stands at €924 but applies only to specific professions.

In an announcement welcoming the start of discussion of its bill in the House Labour Committee on Tuesday, the party said the economic crisis had created huge social problems and a social divide between  private and public sector employees which continues to this day.

While pay in the public sector has to a great extent been restored to pre-2013 levels, private sector employees had not only paid a heavy price with unemployment but suffered more drastic pay cuts which in many cases remained in force.

Average monthly pay in the public sector is €1000 more than the average in the private sector. About one in three Cypriots employees earn less than €1000. And even though in 2017 the state had set a monthly income of €724 as the poverty threshold, 11% of employees receive monthly wages of between €500 and €700.

“This means that one in 10 Cypriots is paid below the poverty threshold. Cyprus is one of six EU countries that does not have a minimum wage set by law,” the party said.

It rejected concerns voiced in the House Labour Committee that a minimum wage would lead to higher unemployment. The same debate had been held in Germany, which introduced such legislation two years ago, and these concerns were refuted, it said.

“We believe the opposite will occur. The introduction of a minimum wage will contribute to reducing unemployment since it will remove the incentive from employers to exploit unemployment as they will no longer have the incentive to employ EU employees with very low wages as the minimum wage will apply to both,” it said.

According to the party the minimum wage should apply to all professions, except where there is a collective agreement, provided pay is above the minimum wage. This will reassure trade unions who fear collective bargaining may be undermined, the Citizens Alliance added.

“However collective agreements cover 25% of employees. And we must look out for the 75% of employees who live in miserable conditions and are exploited by some unscrupulous employers,” it concluded.

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