March 7, 2020 Print

The unintended consequences of raising the minimum wage were at the center of a successful campaign to help educate people in Bosnia and Herzegovina on the problems of market intervention. Association Multi, an Atlas Network partner based in Tuzla, successfully pushed back against a dangerous populist proposal to raise the minimum wage. 

Last November, a proposal to increase the minimum wage by 150 percent was put forward by the leading union body of Bosnia and Herzegovina. While the proposal appealed to the ordinary public, it ignored the negative impact it would have on the already high unemployment rate in the region. Multi launched a widespread awareness campaign through interviews and appearances on influential media to educate the public and unions on why drastically raising the minimum wage would ruin the domestic economy. 

The pro-populism proposal, dubbed “10 Reasons for a Minimum Wage of 1000”, was meant to keep citizens from leaving the country to find jobs elsewhere, but ignored the problems that mandatory minimum wage increases have proven to cause on economies around the world. Association Multi used research and data to show that drastic salary rises would force micro-enterprises, which make up 75 percent of Bosnia and Herzegovina’s economy, to cut down hours and lay off employees. Consequently, Bosnian workers would work for lower wages in neighboring countries because of the lack of competitiveness in their own country. The inflated minimum wage would also raise the salaries of those in the public sector, which would destroy existing public budgets. 

In February 2020, the new union president, Mevludin Bektić, declared the proposal for the inflated minimum wage as "populism" and would instead work with the government to find a more gradual solution to help workers in Bosnia and Herzegovina.

Multi remains active in the public sphere in order to better educate unions and the public about the dangers of populist solutions. 

Multi used an Atlas Network grant last year to fight populism in Bosnia and Herzegovina, while Admir Cavalić graduated from the Atlas Network Leadership Academy. Currently, Resul Mehmedović, Amina Duraković, and Merima Bećirović are in the Atlas Network training program.