In the next draft budget, the caretaker government is proposing BGN 710 minimum wage and BGN 650 for maternity leave.
"At the moment we do not have a public clear mechanism for determining the minimum wage. It is determined administratively and largely unclear," commented the economic adviser at the Bulgarian Industrial Association Shteryo Nozharov in an interview.
The guest in the studio explained to Bulgaria ON AIR that the Bulgarian Industrial Association will upload a statistical analysis in the coming days, based on which it will be seen that the increase in the minimum wage increases unemployment.
"This dependence is due to the specifics of the Bulgarian business cycle and its effects. This is normal because most sectors are placed in a highly competitive environment. All companies work relatively low in the environment, as they compete. If these companies have to increase the minimum wage of their employees, it means either to burden them with additional activities in some way, or to reduce the number of people," he explained.
According to him, unemployment will rise by 1%.
"Plans for this budget are being made quite boldly, without the medium-term budget forecast that is required. An increase in the minimum wage could lead to an increase in taxes and social security in the next three years. Currently in the draft budget announced by the caretaker government, it is not accompanied by such a medium-term budget forecast," Nozharov said.
"Pensions must be based, especially for length of service and age, on the insurance contribution of individuals to the system. Otherwise, we stimulate the gray economy. The more pensions increase without increasing the productivity of the economy, the less real goods they will be able to buy. The increase in pensions does not increase the real purchasing power of pensioners," said the economic adviser.
