site.btaLabour and Social Policy Ministry Proposes to Unions, Employers to Negotiate on Three Options for Minimum Wage for 2018

Belchin Village, July 11 (BTA) - The Labour and Social Policy Ministry suggests three options for a minimum monthly wage for 2018 as a basis of negotiations between trade unions and employers: 509 leva, 492 leva, and 528 leva, Confederation of Independent Trade Unions in Bulgaria (CITUB) Chief Economist Lyuben Tomev said at a seminar for journalists here on Tuesday.

On Monday, the Bulgarian Industrial Capital Association proposed three minimum wage figures for 2018: 385.50 leva, 487.76 leva and 500.52 leva.

The minimum monthly wage for 2017 has been set at 460 leva.

The unions and the employers have already received the proposals for a framework agreement on a minimum wage machinery. Under these proposals, annually, before the end of the first quarter, the Labour and Social Policy Ministry will submit to the social partners 27 statistical indicators, and the unions and employers will seek agreement on three options for a minimum wage level. They will be able to choose one of the options or bargain a compromise. No option will be mandatory, but if they fail to reach agreement, the government will set the minimum wage.

In the first scenario, the minimum monthly wage for 2018 would stand at 66 per cent of the median wage or 509 leva. The CITUB argues, though, that only the median wage of full-time employees should be taken into account, in which case the minimum wage would be 15-20 leva higher.

In the second scenario, the minimum monthly wage for 2018 would be 492 leva, based on growth of per capita GDP and inflation.

The third scenario, 528 leva, is based on the official poverty line for an average household.

The CITUB continues to insist on a more aggressive minimum wage policy: 520 leva for 2018, 560 leva for 2019, 610 leva for 2020 and 800 leva for 2022, with an average monthly wage of 1,700. As a result, the minimum wage would reach 47 per cent of the average wage, or near the Confederation's demand that the minimum wage should represent 50 per cent of the average wage.

"The CITUB insists on an annual rise of at least 100-150 leva of wages in the real economy and in public-financed activities," the Confederation's President Plamen Dimitrov said at the seminar. In his words, such an increase can be achieved even this year.

This will cost an extra nearly 920 million leva. The CITUB demands another 470 million for capital expenditures.

Dimitrov said that, according to the latest Eurostat data, Bulgaria is at the bottom of the wages table. He argued that the Cabinet's governance programme, which is expected to be made public this week, must set a target for Bulgaria to reach 60 per cent of the EU average living standard at the end of the term of office. "We must seek an increase of compensation of hired labour from 42 per cent of GDP at present to 50 per cent, and a 40-50 per cent proportion between the minimum and the average wage," the tradeunionist said.

"In this country, between 20 and 24 per cent of the additional growth of the gross value added per employee are added to the average wage. In this normal process for which we call, half would go to business and the other half to workers," Dimitrov said. According to statistics, all over 300,000 active companies reported an aggregate pre-tax profit of 20,200 million leva for 2016. If 20 per cent of the 15,000 million leva after-tax profit are taken, all wages in Bulgaria could be raised by nearly 15 per cent," the CITUB President noted.

The Confederation also proposes a minimum monthly wage of 700 leva for university graduates who work in their field of study.