Lazar Lazarov, Deputy Prime Minister for Social Policies and Minister of Labor and Social Policy:
Lazar Lazarov holds a Master’s degree in Economics with a degree in Macroeconomics from the University of National and World Economy. He has specialized in the problems of the labor market in Bulgaria. He has also completed a course on “Monitoring and Evaluation of Social Programmes and Projects” in accordance with the International Labour Organisation methodology.
Since 1995, he has successively held consultancy, expert and managerial positions in the National Employment Service (now the Employment Agency), the Bulgarian Industrial Association, the Economic and Social Council, the National Assembly, the Ministry of Labor and Social Policy and the Working Conditions Fund.
He has been a Deputy Minister of Labor and Social Policy in four regular and three caretaker governments in the period 2013 – 2022. He was responsible for the organization and coordination of the activity of the Ministry of Labor and Social Affairs in the field of labor and insurance legislation, social insurance, working conditions, income policy and social dialogue.
Since August 2, 2022, he is Deputy Prime Minister and Minister of Labor and Social Policy in the caretaker government with Prime Minister Galab Donev.
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Mr. Lazarov, for almost 30 years you have been professionally directly connected with the problems of the labor market. From the position of Minister of Labor and Social Policy, how would you assess the current state of the labor market?
Despite an uncertain economic environment and high inflation, we sent 2022 with record low unemployment. Its average level for the last 6 months is below 4.5%. The average monthly number of registered unemployed in 2022 is 147 804 – 33 682 fewer than in 2021. Employment figures are also positive. The number of people in employment in Bulgaria increased to 3.039 million. Despite the positive trends, among the biggest challenges on the labour market remain the large number of economically inactive people and the shortage of qualified staff for a large number of employers. To address these challenges, the MLSP is implementing a project under the Recovery and Sustainability Plan to create an innovative virtual e-learning platform for people aged 16+, under which we plan to train 500 000 unemployed and employed people. In addition, more than BGN 623 million under the Human Resources Development Programme (2021-2027) is planned to equip 170 000 employed and unemployed people with new skills, and 160 000 people with digital skills.
At the end of 2022, a heated debate has erupted on the issue of minimum wage growth. What is the view of the MLSP on this topic?
The established practice in Bulgaria is to update the minimum wage annually in the search for an adequate level that corresponds to both the reported macroeconomic trends and forecasts. In setting the minimum wage at BGN 780 for 2023 MLSP uses the official data of the National Statistical Institute for consistency and traceability across statistical periods. On an annual basis, the increase is 20%, which compensates for inflation from the beginning of 2022.
Are there any pitfalls to solving the minimum wage problem? If yes - what are they?
Challenges in this process are related to uncertain economic conditions, including high inflation and political instability. The minimum wage should meet the needs of the worker and his family, in the context of national economic and social conditions and the fight against in-work poverty. On the other hand, the wage should be responsive to socio-economic conditions, measurable by criteria such as general wage levels, inflation and labour productivity. The solution lies in finding a balance between these two sides.
There has been a debate for years around the need to introduce a mechanism for setting the minimum wage. Do you think it is realistic that in 2023 this topic will finally be closed and we will be greeted with such a mechanism?
The MLSP is in the process of forming a working group with the participation of the social partners to thoroughly examine the possibilities for transposition into Bulgarian legislation of the Directive for adequate minimum wages in the EU. Our expectations for the work of the group are high, because the transposition of the Directive creates an opportunity to reach a consensus on the mechanism for setting the minimum wage.
What are the MLSP's views on the implementation of Directive 2022/2041 on adequate minimum wages? How do you view the trade unions' demand that the minimum wage be set at 50% of the average wage?
The Directive obliges Member States to apply indicative reference values to guide their assessment of the adequacy of statutory minimum wages. In parallel, it makes it clear that the mechanism and criteria by which the minimum wage is to be determined are a matter for the Member States and that national practice and specificities must be taken into account in determining them. It is for this reason that I consider it unacceptable to introduce an automatic mechanism with a single criterion for assessing the adequacy of the minimum wage - linking it to 50% of the gross average wage. I would also like to draw attention to another essential requirement of the directive - the state must encourage collective bargaining to determine wages. We must strive to respect this fundamental principle of full respect for the autonomy of the social partners and their right to negotiate and conclude collective agreements. It is therefore crucial to ensure the effective participation of the social partners in setting and updating the statutory minimum wage.
The MLSP often acts as an arbitrator in disputes between employers and trade unions. How do you assess the level and quality of social dialogue in our country and how do you see the role of the MLSP in this process?
Tripartite cooperation to settle labour relations is one of the great social ideas of the twentieth century. Everyone should be involved in this process - the state, employers and trade unions. Each of these three parties should endeavour, albeit sometimes defending different interests, to reach a compromise and balanced solution. This is why I believe that the MLSP should not be seen as an 'arbitrator' in disputes between employers and trade unions, but as an equal participant in the overall tripartite cooperation process.
Since this issue of our magazine is dedicated to the theme "Successful", what is success to you?
It is difficult to give such a definition as success is subjectively accepted by each person. But surely behind every success there are many hours of hard work, skills, dedication and, last but not least, a capable and loyal team. I would like every person to feel such support, whether it is in achieving their goals in their family life or in their professional life. It is important that we learn to appreciate more the successes of others and lend a helping hand in the failures. I am convinced that in this way we will be more successful as individuals, as a society and as a country.
What do you wish Bulgarian employers for 2023?
Health, optimism and energy, foresight and accurate management decisions to successfully execute their business plans. Let them be active in implementing projects that stimulate the development of Bulgaria's economy and set a good example of success and responsibility to society.
