Risk associated with minimum wage

Risk associated with minimum wage
Risk associated with minimum wage

Since the beginning of harmonization process of the Labor Code with the EU legislation, the issue of minimum wage has been put on the agenda. Specialists have different attitude towards the issue. Some economists believe that the current minimum wage of GEL 20 is not acceptable and should change while others believe that by raising the minimum wage we will increase the cost of doing business, which will eventually hurt the economy.

Shota Gulbani, the President of the Association of Young Financiers and Businessmen, believes that the issue of minimum wage will cause dispute.

"The 2% increase for pension fee caused quite a stir, imagine what happens when a company has agreed on a GEL 300 payment with an employee and will suddenly have to pay a minimum GEL of 500, this means increase of 66% per employee. We are dealing with a clearly wrong approach. This is artificial interference by the state", Shota Gulbani said.

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