How Was the Biggest Salary Increase in Serbia in December Recorded in Kursumlija?

Among the municipalities outside of Belgrade and Vojvodina in which the biggest net salaries were recorded in December last year is Kursumlija with RSD 91,521. The salary increase compared to November is 36.2% and that is the biggest salary increase recorded by the Statistical Office of the Republic of Serbia.

Considering that this is an undeveloped municipality, one of the 44 which will get state assistance this year as an incentive for development, this piece of information has drawn a lot of attention.

As the financial analyst Djordje Ostojic says for eKapija, the first thought one has is that an increase of net salaries in a municipality is a good thing.

– However, if we know that the data on salaries are expressed as average values, we have to keep in mind that a salary increase should not be taken at face value. Instead, to explain the cause of the jump of the net salary in an undeveloped municipality such as Kursumlija, we need some additional data and indicators that the Statistical office has, and which are not made public.

Let’s start with the most obvious reason, which is that, in the month of December, higher salaries were indeed paid to employees in the territory of the municipality of Kursumlija. This is most often caused by bonuses, thirteenth salaries, as well as various other stimulations for employees, which are mostly paid around New Year’s and Christmas holidays.

This phenomenon can be encountered throughout Serbia, and the statistical data show that as well, considering that the net salary in December in the Republic of Serbia amounted to RSD 95,093, which is around RSD 9,000 more than the average monthly net salary for the entire 2023 (which is RSD 86,007).

Considering that there is a company in the municipality of Kursumlija which employs a large number of people, Planinka, when that company pays bonuses, there can be a significant jump in the average salary for the entire municipality, our interviewee clarifies.

However, he adds that there could be other, less obvious reasons that could lead to an increase of the average salary in a municipality, especially an undeveloped one.

– To clarify, if we take into account that big companies have made decisions to locate their production facilities in less developed municipalities and that, often, people with lower qualifications are employed in such facilities, we can reach the conclusion that a sudden leaving of these companies from undeveloped municipalities leaves a high number of less qualified people without their jobs, but also excludes those people with lower earnings from the calculation of the average salary for that municipality. In order to exclude this possibility, it would be good to also look at the number of the persons who are included in the calculation of the average salary in each municipality, but unfortunately, we don’t have those data – says Ostojic.

As he adds, generally looking, the creation of new jobs most often leads to a high jump in the average salaries of the citizens of a municipality, but those are not jobs in production facilities as was the case before, but jobs in management, high-tech or IT.

– However, as we can see ourselves, the strategy of big companies is to locate production facilities in less developed municipalities, whereas better jobs with higher salaries are most often located in the central offices, which are most often located in Belgrade or Novi Sad, which leads to a large regional inequality in earnings – says Djordje Ostojic.

Another approach that can lead to an increase in average salaries in some municipalities, especially undeveloped ones, is the development and support to entrepreneurship, considering that entrepreneurs most often work independently or employ people from the local communities.

– However, this is a more long-term approach, because it takes a lot of entrepreneurs in order for the statistics to show a significant change, but in my opinion, this is a better approach, because entrepreneurs will almost never leave Serbia. On the other hand, big companies are not that faithful and they are concerned with their economic interest, which should not surprise us – concludes eKapija’s interviewee.

Aleksandra Kekic

Opština Kuršumlija

Municipality of Kuršumlija

Đorđe Ostojić

salary of Kuršumlija

salary in December 2023 in Kuršumlija

salary increase in Kuršumlija

salary in Serbia

undeveloped municipalities