site.btaEconomic and Social Council Analysis Looks into Working Poor Phenomenon

At a plenary session on Friday, the Economic and Social Council of the Republic of Bulgaria adopted an analysis of the causes, factors and trends for the existence and scope of a group of so-called "working poor", as well as recommendations and proposals for legislative changes to curb this phenomenon. The analysis was developed at the suggestion of the 49th National Assembly Chair, Rosen Zhelyazkov, the Council said on Monday.

The document states that there are some characteristics in the country that have a negative impact on the fight against the "working poor" process.

The Council draws attention to the fact that the main factors for the increase of this group of people is the low level of incomes in certain regions, economic sectors and jobs, according to education, seniority and qualifications, and the state of the labour market, as well as the disproportionate increase in the prices of basic goods and services in relation to income compensation.

Having a job does not in itself help to escape the poverty trap. The data show that over the last 10 years there have been rising levels of employment but no reduction in poverty rates among the working. For example, in 2022, Bulgaria had 10% of working poor (up from 7.2% in 2013).

The level of vocational education is an important factor in limiting the working poor. Statistics show that as educational attainment increases, the chances of falling into the working poor category decrease.

More serious attention should be paid to digital transformation processes and the green transition and their impact on the labour market and gives the example of the closure of coal mines and coal-fired plants, which will worsen the structure of the workforce. At the same time, the Council recognizes that with the entry of AI and new technologies into the labour market, jobs will be lost and this will lead to even greater wage differentials.

Low wages create additional negative effects on society as a whole, generating the conditions for an upsurge in crime, the informal economy, indebtedness and loss of property (homelessness), addictions, disease and ultimately social exclusion, leading to additional public costs and deteriorating public health.

Based on the analysis, the Council recommends work in several directions to combat the phenomenon of "working poor", described in detail in the document, namely: changes in the legal framework, current principles, rules and methodology for determining the minimum wage, adequate social policy, employment policy, social security and tax policy, development of educational programs related to solving this problem, promotion of social dialogue, social partnership and collective bargaining, as well as work on programs to assist.