Poland's parliament passed on Friday a bill raising the minimum wage, in a pre-election handout which pitted probable future centre-right government partners against each other. The bill, which links wage increases to inflation and growth rates, was criticised by the minority leftist government but backed by its power base in parliament.
All major parties except the liberal conservative Civic Platform (PO) backed the measure, which would come into force at the start of 2006 if the leftist-dominated upper house of parliament and President Aleksander Kwasniewski approve it.
The measure is likely to raise the minimum wage by around 5 percent, according to current estimates of inflation and growth.
Opinion polls show the PO and right-wing ally Law and Justice (PiS) forming a coalition cabinet after September's general elections, with the more popular party expected to dominate the future government's economic programme.
Financial markets are concerned PiS would dilute the PO's reform initiatives and slow Poland's path towards the euro zone, with the minimum wage debate highlighting the parties' different views on economic issues.
"Now 40 percent of our 20-year-olds are unemployed and this will further limit their access to jobs," PO leader Jan Rokita told parliament, calling for a stop to pre-election handouts.
But PiS said Poland has to divide up more equally the wealth created since the 1989 fall of communism and boost the minimum wage - which now amounts to 849 zlotys ($254) per month, or about 35 percent of the Polish average wage.
"Poland cannot afford much, but it can afford to raise from poverty those who work hard for their families," PiS deputy Tadeusz Cymanski said.
The PO and independent economists say that by boosting labour costs, Polish companies will be less inclined to hire new workers or may even cut their workforce, boosting Poland's unemployment rate of 18.3 percent.
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