In the Nova TV studio, the topic is discussed by Maria Mincheva from the BIA and Adrian Nikolov from the IME.
The private, not the public sector, is the one that generates revenue. That is why it is a problem that wages in the public sector are outpacing those in the private sector. The policy of tying salaries in the public sphere to the average wage was implemented regardless of the capabilities and development of the private sector. We first linked the minimum wage to the average wage, which leads to increases in all incomes without those increases being generated by the economy. This can be seen in the private sector, which cannot catch up. This was stated by Maria Mincheva, Vice President of the Bulgarian Industrial Association (BIA), on the air of “Hello, Bulgaria.”
She pointed out that there are administrations where there are not enough staff due to low pay, such as the Executive Environment Agency and the General Labour Inspectorate.
“In municipal administrations we see interesting dynamics. While at the national level there is a relative balance in favour of the constantly expanding public sector, at the regional level in small municipalities - the imbalances become enormous. In places that are depopulating the fastest and are far from major cities, the public sector generates more than 70%–80% of employment. And there, wages are much higher than those in the private sector,” said Adrian Nikolov, Senior Economist at the Institute for Market Economics.
He added that in many regions of the country there has never been a situation in which the private sector pays more. This means that the best specialists will choose the public administration, while the private sector will rely on people who cannot succeed elsewhere.
According to Plamen Ivanov, an expert in investment management and financial security, this is “the budget of the obedient voter.” He believes that next year will see a massive deficit. Ivanov also commented on the additional remuneration in the public administration: “According to available information, very substantial bonuses were taken at the Investment Agency. Given that foreign investment is absent and our exports have fallen by 4.8%, handing out such bonuses is outrageous,” he added.
Nikolov said that in the private sector the gap is huge and stated that the difference in revenues is around eightfold, while in other countries it is around four to five times.
Mincheva stressed that the BIA’s proposal is to cut the unfilled positions in the administration. “These positions remain budgeted and from there bonuses are distributed,” she added, clarifying that this involves more than 5,000 positions.
Nikolov explained that the difference between average salaries in Sofia and in various regions is clearly smaller than the difference in labour productivity. For salaries the difference is about twofold, while for productivity it is more than fivefold.
Ivanov said that foreign investors are leaving the country, and not only that - Bulgarian businesses are also relocating their production abroad.
