In connection with the discussion in the public domain to increase the minimum wage, pay attention that on this issue BIA consistent position against the economically unjustified state interference in the labor market through administrative determination of key parameters such as minimum wage (minimum wage) minimum insurance income (MOD) and others.
The change in the minimum wage should be made on the basis of branch and regional negotiation after consensus between the social partners and taking into account the following:
  1. Mistakenly equate the concepts "income" and "minimum wage", respectively - is deeply wrong for the preservation of the minimum wage to be spoken of as' freezing of income. "Income originates from many elements including. basic salary, incentives for good job performance, allowances for transport, communications, pensions, social assistance and others. DBE is a key indicator, benchmark, based on which establishes a number of payments, incl. as subsidies for political parties, remuneration for participation in the management bodies of companies and others. In this sense, the minimum wage does not always lead to an increase in income, but on the contrary - most often leads to an increase in costs (and budget, and individuals).
  2. Structure of the economy, labor productivity levels of inflation in the country in the period of economic crisis, do not provide the administrative increase in the minimum wage, having warnings to our country by the IMF and the EC, incl. regarding the practice of determining the MOD.
  3. During the economic crisis in Bulgaria (2008-2014 on, Q3) SrRZ rose by 49.5 per cent and the minimum wage - by 55 per cent, approximately 14% real growth in labor productivity over the same period. Thus the boundaries of these two values began to close, which destroys the value system of the Bulgarians do not stimulate economic to increase their education and limits the development of human resources. Similar steps the government create the wrong perception by the Bulgarians that without education can receive a salary close to the average.
  4. The new proposal of the finance minister to 460 lev minimum wage in 2017, an increase of 35% compared to its current size. However, in the updated medium-term budget forecast 2015-2017, the envisaged overall increase in the minimum wage is 11.8% (to 380 lev in 2017). SrRZ for the same period is projected to grow by an average of 3% (cumulatively for three years - 9.3%). Adoption of the proposal for 460 lev minimum wage in 2017, exceeding the mean ratio "DBE: SrRZ" of over 50% and non-compliance with the expected growth of labor productivity. Not more than 1-2 countries in the EU (high unemployment) have a similar ratio. BIA confirmed repeatedly expressed its position that this ratio should not significantly exceed 40%.
  5. There are strong regional and sectoral imbalances in pay (up to 2-2.5 times), which will further increase in administrative increase in the minimum wage. In regions with SrRZ close to the minimum wage will increase migration of labor resources at five major centers - Sofia, Plovdiv, Varna, Burgas, Ruse, and will continue depopulation of the regions with severe economic consequences, in contrast with the requirements of EU cohesion .
  6. Bulgaria's biggest problem is unemployment, especially that of the non-qualified personnel. Economically unjustified increase in the minimum wage will lead to further reduction of low-paid labor and growing unemployment among the most vulnerable groups in society, respectively - the cost of benefits and social assistance.
Unfortunately, the state does what it should do - to reduce administration employees and, hence - administrative costs. Optimizing the number of employees in administration should be based on widespread computerization - a tool that is in the hands of the state. Instead, the state imposes bureaucratic intervene in the labor market - interference that is just as logical as it would be administratively increase, GDP, investment or other indicator.

Date: 01.12.2014

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