Croatian workers should be paid more, foreign labour not the sole answer

Mursko Središće, Croatia

Croatian workers should be paid more, foreign labour not the sole answer

The Croatian president has expressed the view that domestic workers deserve higher wages in Croatia, emphasising that the country’s labor shortage cannot be addressed solely through the recruitment of foreign workers.

In 2021, Croatia had just over 80,000 foreign workers, and by 2022, that number grew to over 120,000.

In 2023, it exceeded 170,000, and this year, the country is expecting close to 200,000 work permit applications for foreign workers.

This rapid increase has happened more quickly than anticipated.

President Zoran Milanović was speaking this week to representatives of the Association of Foreign Investors in Croatia.

“Our people have given up on some jobs, but that is not a solution and we cannot come to terms with it. The solution is to increase the wages of the people who do these jobs,” he warned, before adding.

“The labour shortage in Croatia cannot be solved only by bringing in foreign workers, but domestic workers should be paid more.”

President Milanović speaking to the representatives of Association of Foreign Investors in Croatia (Photo: Office of the President of the Republic of Croatia / Tomislav Bušljeta)

The Association of Foreign Investors in Croatia presented the president the “2024 White Book”, a publication on the business and investment climate in Croatia, including includes proposals for its improvement.

This year’s “White Book,” titled “Konkurentnost Hrvatske nakon dovršetka procesa europskih integracija: novo poglavlje” (Croatia’s competitiveness after completing the European integration process: a new chapter), highlights two major barriers to faster economic growth in Croatia.

The first is the labour shortage, and the second is the need to improve public administration efficiency and expand digitalisation.

Along with identifying these challenges, the “White Book” offers 43 recommendations to address key development constraints in Croatia, which were also presented to President Milanović this week.

At the meeting, representatives of the Association stressed that while their companies were established with foreign capital, they are Croatian businesses that generate jobs, create value, contribute to exports, and invest in research and development within Croatia.

During his discussion with the Association of Foreign Investors, President Milanović emphasised that, as president, his focus is on investments that strengthen both Croatia and its economy.

He also highlighted that, given the labour shortage identified in the “White Book” as a key barrier to growth, domestic workers need to receive higher wages.

President Milanović (Photo: Office of the President of the Republic of Croatia / Tomislav Bušljeta)

The Association of Foreign Investors in Croatia founded eleven companies in January 2012 with the intention of starting a constructive dialogue with the Government and other stakeholders in Croatia on how to improve the unfavourable business climate.