Minimum wage rise could cause some sectors serious damage, says chamber head

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The government's proposal to raise the minimum wage by almost 20% from 2012 could cause serious damage to some sectors, such as light industry or in underdeveloped regions, Hungarian Chamber of Industry and Commerce (MKIK) chairman László Parragh said on Tuesday.

Earlier big wage rise in Hungary were followed by higher unemployment for 1-2 years as businesses struggled to cope with the extra payroll costs before failing, Parragh said, speaking after the inaugural meeting of the NGTT, an interest reconciliation body for businesses, unions, the government and a wide range of social groups.

The government must take its promise on wage compensation seriously, Parragh said.

Hungarians whose net wages drop next year because of the elimination of tax preferences are to receive wage compensation under a government initiative.

ASZSZ union association head János Borsik, also speaking after the NGTT meeting, said the government plans to raise the minimum wage to HUF 92,000 a month still does not preserve the value of paychecks adjusted for inflation. He also complained that the details of the promised wage compensation system were unclear.

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