BEIRUT: Prime Minister Najib Mikati has warned that a recent proposal approved by his government to boost workers' wages could have negative economic repercussions on the country.

“I understand the political considerations behind this position, but everyone must realize that these considerations will have strong economic repercussions,” Mikati said in an interview published Thursday by local daily As-Safir, referring to the Cabinet’s decision to endorse a plan by Labor Minister Charbel Nahhas over his own plan, previously approved by the government on Dec. 7.

“I respect the democratic game and the outcome of the vote,” Mikati said.

During Wednesday’s session, Mikati tried to persuade ministers to adopt his wage increase proposal which calls for a minimum wage of LL675,000. However, Nahhas’ proposal won the confidence of 15 ministers with 14 voting against in Cabinet.

Under the new decision adopted Wednesday, the minimum wage was hiked to LL868,000 – a sum that includes a LL236,000 transportation allowance that the government added to the basic salary. The increase was set at 18 percent, in accordance with inflation rates as calculated by the state-run Central Administration of Statistics since 2008.

Salaries under LL1.5 million receive an 18 percent increase while salaries above LL1.5 million receive an additional 10 percent on the second salary bracket between LL1.5 million and LL2.5 million. Salaries above LL2.5 million will not earn an additional increase, meaning the raise on these salaries will be at LL370,000. The raise is effective as of Dec. 1, 2011.

The yearly education allowance was converted by the Cabinet to a LL40,000 per child monthly allowance. The Cabinet limited the allowance to LL160,000 per family.

The Cabinet also decided to cover directly the National Social Security Fund fees for sickness and maternity benefits which employers and employees used to pay from their own pockets.

Additionally, employees who received “consensual” salary hikes from their employers since Jan. 1, 2011 may not be able to benefit from the full increase. All employees should have received these consensual salary increases in order to exempt the company from paying the salary hikes.

“The [political] message arrived and I accept it,” Mikati said in the interview with As-Safir.

He said the Hezbollah-led March 8 coalition “wanted to express solidarity” with free Patriotic Movement leader MP Michel Aoun.

Mikati said Cabinet ministers who voted in favor of Nahhas’ plan were responsible for the consequences of their actions.

“There is no problem for me at a personal level, but as an economist I am afraid the country will pay the price,” Mikati said.

He warned that Nahhas’ plan would cause massive inflation and put a burden on economic bodies in terms of the end-of-service compensations and the integration of the transport allowance into the basic salary.

In a separate interview with An-Nahar newspaper, Mikati said of the government's decision: "No one won and no one lost."

"Let’s wait and see how this decision will be implemented; and we hope that it will be accepted by the Lebanese and economic bodies,” he added.

Mikati also denied reports he would fail to sign the pay-increase decree.

“God forbid! How can I not sign a decree adopted by Cabinet?” Mikati asked, in response to a question by Al-Akhbar newspaper.

However, Mikati said: “I will wait for the Shura Council’s approval before signing.”