Doubts About Better Life

Will the General Collective Labour Contract Between Workers and the State Cease to Exist

Montenegrin Chamber of the Economy set a time limit of three months for the transfer from the system of the so-called lowest wages which is subject of tripartite negotiations to the system of the so-called guaranteed wages which are determined independently by the state. Should this proposal be accepted, the initiative is announced to abandon the system of the existing general collective contract in Montenegro

AIM Podgorica, 22 December, 1999

After the Trade Union of Montenegro had recently publicly stated the demand for a radical increase of the minimum wage in Montenegro from the present 50 to "as much as" 94 German marks by the end of February 2000, sharp reactions followed which may cause new disturbances in the already shaky Montenegrin social sphere. Montenegrin Chamber of the Economy made a counter proposal that the concept of the minimum wage should be abandoned along with the model of negotiations about what it should amount to. The management board of the Chamber of the Economy set a time limit of three months for the transfer from the system of the so-called minimum wage (which is subject to negotiations) to the so-called guaranteed wage (which is determined by the state) and made it clear that if this proposal were not accepted that it would "launch the initiative for abrogation of the general collective contract in Montenegro".

What would that in fact mean?

The existing minimum wage in Montenegro is determined in tripartite negotiations by the Trade Union, the government and the Chamber of the Economy, and at present it amounts to exactly 50 marks. The so-called guaranteed wage - the minimum the state and the employers must guarantee to the employees - is defined on its basis. At present it amounts to 65 per cent of the minimum wage. Therefore, according to the proposal of the Chamber, the new minimum pay, or the guaranteed wage in Montenegro would be 32.5 marks. In other words, daily pay of the workers would be 1.47 marks, which is about 30 dinars a day.

Ever since the general collective contract was signed in Montenegro in the end of 1995, the minimum price of labour was determined in negotiations almost every month. In the beginning of the negotiations - in January 1996 - it was worth 52 German marks, and it had the highest value in July 1997, when, paid in dinars, of course, it reached the value of 94 marks. That is exactly the value of the minimum pay that the Trade Union referred to as an acquired right when it made the demand for the rise of the minimum wage by March 2000. In the beginning of 1999, the minimum wage was 550 dinars, or 65.6 marks. At the time, the average monthly salary in Montenegro was worth 200 marks, while at present the wage is on the average lower by one quarter. All this causes quite natural discontent of the workers, but still does not seem to sound the alarm among the protagonists of reformist efforts who symbolically named themselves "To Live Better".

The real value of workers' wages in Montenegro declined in the course of the year, but it was accepted as part of the story about collateral damage and results of NATO bombing. Interruption of communications with the devastated Serbian economy which is the most significant partner of Montenegro, along with strained political relations to the point of bursting, caused severe economic consequences not only in Serbia, but in Montenegro, too. But, since for protection against inflation generated in Belgrade, the two-currency system was introduced in Montenegro, the autochthonous Montenegrin inflation was born. During the year and even during the NATO attacks, monthly increase of prices was comparatively successfully kept at the low level of below 10 per cent. But, why did chaos begin in autumn? In October, prices of everything went up by 12.4 per cent, and after introduction of the mark as the official parallel means of payment, prices were raised in November for as much as 25.3 per cent. The current prices in Montenegro in relation to the end of 1998 are higher by almost 90 per cent, while living expenses have gone up by almost 100 per cent.

In calculation of the minimum wage several factors are used, among which the most intriguing one for the public is the consumer's basket. At the time of socialism, the so-called statistical consumer's basket contained 120 goods necessary for every-day life of a family. Nowadays in Yugoslavia it is reduced to 65 items (just food and drink), and in Montenegro to only 43. The consumer's basket used by negotiators as one of the elements in negotiations on the minimum wage was made up by the Institute for Health Protection of Montenegro at the time of the sanctions as the "List of necessary foodstuffs for satisfying the energy needs of an average family of four". Popularly it is called the "war consumer's basket", because as they say in the Trade Union, it was planned for surviving in the conditions of war and should not be used for more than three months because of health preservation.

Such a consumer's basket the value of which is calculated by the Trade Union was worth 478.3 marks on 16 December, or by 5.3 per cent more than just a week before that. In other words, the daily minimum expenditure of a family (only) for food is 15.43 marks, and the guaranteed worker's daily wage, according to the proposal of the Chamber of the Economy would be 1.47 German marks.

But, this is not the end of the story. Since the consumer's basket contains only food and drink, in order to calculate the other needs of an average family (clothing, footwear, hygiene, housing, culture and similar), the negotiators reached a deal to increase its value by 40 per cent. Therefore, it turns out that an average family of four in Montenegro needs (at the moment) 669.62 German marks in order to survive, or "satisfy its energy needs". For the sake of comparison it should be said that the official consumer's basket of food and drink (consisting of 65 items) in Serbia is cheaper by half.

"Abrogation" of the general collective contract announced by the Chamber of the Economy of Montenegro could cause great political problems. Abandoning of the existing concept of the minimum wage could cause a legal void and collapse of the whole system of laws in the sphere of labour relations, social protection, tax system and others. The minimum wage is the reference point for all forms of social appropriations in the Republic. Besides, it would imply nullifying of the initial steps already made in promoting social dialogue and tripartism in Montenegro, that is, it would be quite a significant deviation from the generally accepted commitment to reforms.

As it is impossible to survive even on the average, least of all on the minimum wage, the news on the possible abandoning of the concept of minimum wage did not cause much concern of the public. Since not only salaries of the regularly employed, but also the social system in general, especially the mechanisms which regulate various social appropriations in the Republic, are official but inoperative, everyone shifts around for oneself the best they can. That is why the minimum wage and the negotiations held every month about its amount are experienced by the public as an illusion that the system still operates. With good reason: hardly anybody actually lives on legal work.

Dragan Djuric

(AIM)