One of Bulgaria’s main employers’ organisations said it opposes government plans to raise the minimum wage in one of the EU’s poorest countries, arguing that it is already too high.
Bulgaria currently has some of the lowest wages in the EU, with the minimum wage set at 50% of the previous year’s average wage. However, the minimum wage is set to rise from €470 euros to €535 by 2025-an increase of 15%.
However, the Association of Industrial Capital in Bulgaria insists the minimum wage should not be raised and should even be reduced to €420, as investors consider it too high.
“As a result of the inadequate method of calculation, next year, more than half of the workers in our country will receive the same pay – minimum wage. There is no large economy in the world that aims for the minimum wage to be half of the gross average,” said the association’s chairman, Vassil Velev.
Bulgaria’s share of the informal economy was 30% in 2022, the highest compared to other EU countries in 2022, research by the European Parliament reads. This means that Bulgarian companies largely avoid paying taxes and insurance for their employees.
The expected minimum wage in 2024 for one hour’s work in Bulgaria is €3.25, and the increase for one year should be 15.4%.
“The new minimum wage will contribute to increasing the motivation of people on the lowest incomes to look for work, to raising living standards, reducing the risk of in-work poverty and reducing income inequality, as well as stimulating domestic demand “, the Bulgarian government has said.
The government added that setting a new, higher minimum wage will help raise the standard of living of the lowest earners in the labour market, preserve jobs, and adapt the workforce to the needs of the labour market.
Even after the increase, Bulgaria will still have the lowest gross minimum wage in the EU, at €551. Hungary comes closest, with a minimum wage of €710.
(Krassen Nikolov | Euractiv.bg)
Source: euractiv.com
