THE COUNTRY IS BURNING, BUT THE GOVERNMENT IS GROOMING Itself: Salary increases will be eaten up by price hikes: Everything goes towards bills, food, clothing, transport...

By: Amra Vrabac

Since the beginning of this year, the minimum wage in the Federation of Bosnia and Herzegovina has increased to 1,000 KM. The FBiH Government tried to convince us that they want to improve the standard of living for workers, especially the most vulnerable whose wages were much lower until then.

However, even this decision by the FBiH Government was made overnight. Employers' costs increased, and the rise in the minimum wage also meant an increase in other wages. The FBiH Government attempted to mitigate this financial blow to employers by subsidizing part of the contributions and by adopting a decree on the payment of non-taxable aid to workers up to 450 KM per month.

Half a year later, it is evident that inflation and the rise in all living costs have consumed the increase in both the minimum and other wages. A mark here, two there, three elsewhere, and so on…

Retailers were among the first to raise prices. They needed to mitigate the consequences of the non-working Sunday. Then, prices for other services also started to rise. Prices increased in catering establishments, hairdressing salons, gym memberships, which was also felt by the Prime Minister of Sarajevo Canton, Nihad Uk, dental services, and cable operator services. A rise in the prices of oil and petroleum products is also announced.

Then, within a month, the Sarajevo Canton Government made decisions to increase the prices of heating, water, and public transport. Thus, June heating bills have already increased, and you will see the difference these days (take your June bill from last year), you will see the difference for water at the beginning of August, and we will be paying for more expensive public transport starting tomorrow. The price of a single ticket has increased from 1.80 to 2.20 KM. And the price of a worker's coupon to 60 KM.

Today, the FBiH Government and Elektroprivreda BiH announced an increase in electricity prices for September. Every increase in electricity prices leads to an increase in the prices of bakery products, given that business entities pay a higher electricity tariff. And the question is, where will the price increases end? Meat, fruit, and vegetables are a distant thought for many or are very rarely on their tables.

Starting tomorrow, for example, contributions on wages that are the employer's burden will be lower, but this does not mean that workers will receive higher wages. That remains at the (good) will of each employer. For a minimum wage of 1,000 KM, the employer will have 86 KM less in obligations; for a higher worker's wage, this amount is greater. However, even if a worker receives this "surplus," they will redirect it to paying increased bills, buying food, or clothing.

It is not excluded that the Sarajevo Canton Government has prepared other price increases for us. And every citizen's consumption directly flows into budgets from which the public apparatus is financed. For years, we have been hearing about public administration reform, cost reduction, but in reality, this government is doing the opposite. They are hiring party members, giving unnecessary compensation for regular jobs, engaging people through work contracts, and distributing grants without a clear plan and performance review.

However, regardless of our consumption and budget filling, the Sarajevo Canton Government is in trouble. Although a record budget of 1.88 billion KM was adopted at the end of March, which is a larger budget than state institutions have, in the last few months, payments for kindergartens, scholarships, funeral and burial allowances for the veteran population have been delayed, there are no payments of subsidy differences for youth, nor public calls for 2024 or 2025.

At the same time, unions are pressuring the Sarajevo Canton Government, demanding new collective agreements and higher wages.

For now, citizens are at a loss, and who will lose next year, we will have to wait until October 2026.