Minimum wage to increase as from January 1st 2013

The Government is proposing to raise the minimum wage, frozen in 2012, from €641.40 to €645.30 per month, an increase of 0.6%, as from January 1st 2013. With VAT having risen anywhere between 3% and 17% and inflation at 2.9%, some are describing the increase as ‘out of place’.

The Government justifies the increase on the grounds of wanting to promote economic recovery and stimulate job creation. The Government also states that the increase is in line with an agreement on employment and collective bargaining signed by unions and employers in January 2012.

The unions, however, maintain that the agreement was based upon the inclusion of the cost of living index (CPI) as a factor, something which has been ignored in the calculations.

Whilst any increase is better than no increase, it is hardly a measure to increase consumer spending.

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