Bulgarian Employers Reject Minimum Wage Increase Proposal

Bulgaria's main employers' organization has expressed strong opposition to the government's proposal to increase the minimum wage from €470 to €535 by 2025, arguing that the current wage is already excessively high. The Association of Industrial Capital in Bulgaria suggests that the minimum wage should be reduced to €420, citing concerns from investors regarding labor costs. Currently, Bulgaria has one of the lowest minimum wages in the EU, set at 50% of the previous year's average wage, which has led to a significant portion of the workforce earning minimum wage. In 2022, Bulgaria's informal economy accounted for 30% of its total economy, the highest rate in the EU, indicating a widespread issue of tax and insurance evasion among companies. The government argues that raising the minimum wage will motivate low-income workers to seek employment, improve living standards, and reduce in-work poverty and income inequality. The expected hourly minimum wage for 2024 is €3.25, with a projected increase of 15.4%. Despite the proposed increase, Bulgaria will still have the lowest gross minimum wage in the EU, with Hungary's minimum wage at €710. The government believes that a higher minimum wage will not only enhance the standard of living for the lowest earners but also help preserve jobs and align the workforce with market needs. The debate over the minimum wage reflects broader economic challenges faced by Bulgaria, particularly in attracting investment and addressing the informal economy. The ongoing discussions highlight the tension between employers' concerns about labor costs and the government's commitment to improving the economic conditions for low-income workers. As the situation develops, the implications for both the labor market and the overall economy will be closely monitored.