site.bta Bulgarian Industrial Capital Association Demands Scrapping of Minimum Wage

Bulgarian Industrial Capital Association Demands Scrapping of Minimum Wage

Sofia, May 15 (BTA) - The Bulgarian Industrial Capital Association (BICA) wants minimum wage in the country to be scrapped and to further develop collective agreements for different economic activities, said BICA Chairman Vasil Velev during a meeting of his Association's Governing Board here on Monday.

According to him, the minimum wage in Bulgaria exists only so politicians and trade unions can tell their voters and members that they have increased it.

Bulgaria has the fifth highest minimum wage in the EU, compared to its GDP. Labour productivity in this country is 15.26 per cent of that in the EU-28, while wages are 21.07 per cent of the EU average, which shows that in Bulgaria they are running ahead of labour productivity, compared to the rest of the EU, Velev said. Bulgaria has a higher employee compensation to GDP ration than most East European countries and the highest such ratio for the 2005-2016 period out of all EU Member States.

BICA's head added that hundreds of thousands are currently working for less than minimum wage, because they were appointed as part-time employees, but in reality are working full-time.

According to National Statistical Institute data, the labour force in Bulgaria has decreased by 73,000 in 2016, while the number of employed people has decreased by 15,000, Velev said, adding that there are fewer and fewer people left in Bulgaria to work. According to him, this is the biggest problem and it must be discussed by the whole of society.

There are a total of 2,900,000 people outside the labour force, of whom only 239,000 want to work.

BICA's Chair quoted data, according to which the income level of people working in EU countries, where there is no minimum wage, is 1.6 times higher than that of EU employees in countries with a regulated minimum wage, while unemployment is 1.4 times lower for the former. Calculations show that the average wage in countries that do not have a regulated minimum wage is significantly higher than in countries where minimum wage is mandatory and regulated, he added.

According to International Monetary Fund data, Bulgaria is among the most seriously affected countries by the East to West migration. Close to 20 million people have left Eastern Europe over the past 25 years. The largest outflow was observed from Southeast Europe - Bulgaria, Romania, Croatia and Albania. Around 16 per cent of these countries' population has emigrated to the West. Bulgaria has been impacted the most by this type of emigration, as it has hampered its GDP growth by an average of 7 percentage points, decreased labour productivity, increased the fiscal burden and further delayed innovations.

Velev said that no extraordinary measures are needed regarding income policy in Bulgaria, as income levels are growing faster than the economy. What is needed are people whose education was paid for by the State and are committed to work in Bulgaria or Bulgarian companies for a set period of time.