Economists: Minimum wage increases in the region can lead to the workforce exodus from North Macedonia

Trajan Angeloski, president of the Chambers of Commerce of Macedonia, tells Kosovo Online that the increase in the minimum wage in the region will also affect the rise of the minimum wage in North Macedonia. Angeloski and Ivan Pesevski, vice president for the private sector of the Macedonian Trade Union, say for Kosovo Online that if this does not happen, it could result in a workforce exodus.

According to Angeloski, the minimum wage in North Macedonia is currently around 360 euros.

He believes that wage increases, including increases in the minimum wage, often lead to labor migration, which in this case could force the authorities to raise wages in North Macedonia.

On the other hand, he points out that raising the minimum wage could also result in fewer employees, while workers would be expected to be more productive.

"It can certainly be confirmed that with every wage increase, the number of employees decreases, as efficiency will have to be at a higher level. As for migration, with the modernization of infrastructure and easy movement from one country to another, it is inevitable that we will start competing with each other on wage levels. If a particular region or country has higher wages, it is expected that some workers will seek employment there, as they would have better conditions and higher pay for essentially the same job. These are economic realities, and I believe we cannot escape them," Angeloski says.

When asked if the current minimum wage aligns with the state of the business sector, Angeloski notes that the Macedonian economy is not seeing impressive growth in terms of gross national income.

"This presents a problem because you need to allocate more funds for employees, yet businesses are performing similarly to last year, with some sectors even seeing declines. Unfortunately, Macedonian companies do not have much flexibility on this issue. However, as I mentioned, wage increases in Europe, particularly in neighboring countries, will inevitably affect us," he explains.

Ivan Pesevski, vice president for the private sector of the Macedonian Trade Union, is also concerned that minimum wage increases in the region will lead to labor migration.

"With the latest increase, we are no longer the lowest, but we are second to last in the region, particularly in Southeast Europe or the Western Balkans, where almost all other countries have surpassed us in both minimum and average wages. This raises the question of whether it will lead to a greater problem of workers leaving for other countries," Pesevski notes.

According to estimates by the Macedonian Trade Union, the minimum consumer basket for the previous month was over 1,000 euros. It includes food, clothing, and medicine, but not credit or rent.

"This means that our society has not yet matured enough to live decently on two minimum wages. Instead, it requires two average wages, which is rare to find in a single family, especially since the latest statistics from the Public Revenue Administration show that a large portion of citizens earn between the minimum and average wage. This means that even with average and minimum wages, families are barely making ends meet, covering only the basic needs to survive the month," Pesevski says.

He also notes that data from the Public Revenue Administration show that more than ten thousand people earn less than the minimum wage.

"This is illegal, and we need to sound the alarm, so appropriate charges are brought against those employers for cheating the system," he emphasizes.

The Macedonian Trade Union believes that the minimum wage should not be a cent less than 450 euros and that this should have been implemented last year.

"It is already too late because many people working for minimum or near-minimum wages have left for developed countries. Meanwhile, older workers, due to language barriers, haven't gone further west but have gone to Serbia, Montenegro, Croatia, where minimum and average wages are two to three times higher," Pesevski points out.

Warning of the potential migration of the workforce, he explains that people currently have no other choice.

"Workers who earn the minimum wage feel they have no other option. History has shown that when the minimum wage increased, those workers didn’t cost employers any more money," he says.

For this reason, Pesevski disagrees with experts who argue that increasing labor costs would lead to layoffs.

"Employers complain they can't find workers even for much higher wages than the minimum or average. So, conscientious employers who respect social dialogue and fight against unfair competition don't complain and are even ready to import workers because there are no more of ours. Those employers who say that a 350-euro minimum wage is too much while driving cars worth 100,000-200,000 euros shouldn't even be considered or commented on," Pesevski asserts.

Pesevski emphasizes that most minimum wage earners work in the private sector, but there are also some in the public sector, including in courts, hospitals, and even the police.

"Not to mention cleaners, hospital staff... We have construction technicians and engineers, forestry technicians and engineers, people who have been working for years in high-risk jobs exposed to external factors, yet they earn the minimum wage. This raises questions about our entire society. No economy can be built without workers. What direction are we heading in when we see that our workers are building foreign countries instead of their own?" the vice president of the Macedonian Trade Union warns.