Social partners fail to agree on minimum wage increase from Jan.1

The National Council for Tripartite Cooperation, which includes representatives of the trade unions, employers and the government, on October 11 did not reach an agreement on raising the minimum wage by more than 15% from 1 January next year.

According to the estimates of the caretaker Minister of Labour, the minimum wage from next year should increase by 144 BGN or become 1,077 BGN compared to the current size of 933 BGN. Employers' organisations have spoken out against it. Despite the negative opinion of business, the Council of Ministers may vote on the increase.

According to the Labour Code, the minimum wage is formed as 50% of the country's average gross wage of the previous year. Employers saw an error in the calculation, explained that it contradicted international directives and demanded that it not be raised from 1 January.

"In today's debate there was neither social dialogue nor any factors were discussed," said Vasil Todorov of the Bulgarian Chamber of Commerce and Industry.

"Nobody knows at the moment exactly how many people are employed at the minimum wage because there is a very big discrepancy between official data collected by various institutions, which makes it very difficult to conduct a proper policy," added Maria Mincheva, Bulgarian Industrial Association.

Trade unions disagreed and called on the government to implement the law and raise the minimum wage.

"There are both legal and economic obstacles and reasons not to raise the minimum wage. On the contrary - it makes an economic contribution to the growth of consumption and therefore to the growth of GDP," said Plamen Dimitrov, President of CITUB trade union.

"The right way is for the minimum wage to reach the minimum standard of living or the so-called subsistence standard. The minimum wage should afford an individual working full-time the ability to procure all the necessities to sustain life and not live in misery," said Atanas Katsarchev, chief economist of the Podkrepa trade union.

The caretaker Finance Minister assured that the dialogue would continue and called for the minimum wage to be considered as part of the formation of the new budget.

"The Ministry of Finance has developed a comprehensive package of measures, with measures for economic development and social prosperity being the leading ones. The budget is not only revenue and expenditure, it should ensure the economic development of the country," Minister Lyudmila Petkova said.

According to the National Statistical Institute, a total of 437,000 people in the country are employed at minimum wage.