Georgian Trade Unions Request Defining GEL 320 as Minimum Salary

The minimum salary in Georgia may become GEL 320 (around $108.29) per month due to a legislative initiative submitted to Parliament by the Trade Unions last week.

As of today, the minimum salary in the private sector in Georgia is set at GEL 20, around $6.77, while it is GEL 135 in the public sector ($45.69). It is the lowest minimum wage among the former Soviet Union countries. According to the bill, the minimum salary needs to be at least GEL 320 per month, which is 30% of the average wage, as per internationally accepted practice.

“Given the economic situation in the country, the minimum wage is revised every year. Adoption of the law will affect 130,000 employees, or 15% of hired workers, who earn less than 320 GEL per month. After the registration of the bill, it will be necessary to collect 30,000 signatures and submit it to Parliament,” the Trade Unions said.

Trade Unions of Georgia drafted the bill themselves and also conducted the relevant research with the support of the Friedrich Ebert Foundation.

"Imposing a minimum wage in the country and periodically revising it will promote the principles of social justice and solidarity and prevent the exploitation of employees. As a result of the bill, particularly low-paid workers will see their income increased. This will enable them to earn more and help rid the country of poverty," the explanatory note reads.

Raisa Liparteliani, the Deputy Chair of Trade Unions, told media that the minimum wage is calculated from the average salary set by the National Statistics Office (Geostat).

However, she added that the methodology used by Geostat is controversial, but at the same time it is the only official data available in the country.

“We all know that GEL 1068, which is the latest figure of the average salary in the country, is not the real average salary. There are whole sectors where monthly salaries do not exceed 300-400 GEL. On the other hand, this is the official average salary set by the state,” Liparteliani says.

Geostat uses arithmetic means to calculate average monthly salaries, but the median method is better used when the data significantly differs. The issue is that if only the salaries of the most highly paid people are raised, this does not affect the median salary, though it increases the mean salary.

“We certainly have our concerns regarding this methodology. Specifically, they do not calculate the median salary, and the average salary that Geostat has set starts with the top managers and ending with the lowest rank people,” Deputy Chair of the trade unions stressed.

The bill also cites data from the Geostat data 2018 which shows that the country's poverty rate is 22.3%, which is 11.6% below the poverty line. As of August 2019, there were 23,526 people in the country who earned less than 100 GEL a month, 63,356 people had less than 200 GEL salaries, and 114,00 employees who had less than GEL 300.

The National Statistics Office reports that in January-May 2019, Quarter 1, the average monthly earnings in Georgia increased by 33.5 GEL compared to the first quarter of the previous year and amounted to GEL 1092.7.

However, the highest average monthly salary was observed in Quarter 3, 2018 and it was GEL 1202.2.

Geostat says that in QI, 2019, the majority of sectors indicated an increase in the average monthly earnings compared to Quarter I of the previous year. As for the monthly earnings by gender, in the QI 2019 the average earnings equaled 876.1 GEL for women, while 1294.1 GEL for men and the annual growth of earnings amounted to 58.0 and 22.4 GEL, respectively.

To note, the 2018 average monthly salary in Georgia, according to Geostat, was 1068.3 GEL ($359), which was a 6.9% increase compared to 2017.

By Tea Mariamidze

Image source: bpn.ge