Public sector pay deal translates into costlier services

Citing higher labour costs, some of the retirement homes and kindergartens have already hiked up the prices of their services, while higher wages may yet translate into higher supplementary health insurance premiums and in-home support services. However, not all hikes can be blamed on higher wages.

Prices of services at retirement homes are as a rule adjusted once a year, that is on 1 March. An additional adjustment is possible if labour costs have gone up by more than 1.5% since the last adjustment.

The Labour Ministry says that labour costs resulting from annexes to collective bargaining agreements increased by about 4% from 1 January on. These costs "represent about 50% in the price structure, which at 4% pay rise translates into 2% higher price of services".

According to ministry data, 60% of service providers opted for adjustment of prices of their...