BICA PUTS AGAINST ADMINISTRATIVE INCREASE IN MINIMAL WAGE

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Bulgarian Industrial Capital Association sent its position on the Draft Council of Ministers for setting a new amount of the minimum wage in the country for 2021 to Ms. Mariana Nikolova, Deputy Prime Minister for Economic and Demographic Policy and Minister of Tourism, and Mrs. Denitsa Sacheva, Minister of Labor and Social Policy. In it, BICA again categorically states its disagreement with the administrative and voluntary determination of the amount of the minimum wage.

The employers’ organization once again found that even when it was considered that the talks on reaching an agreement on the minimum wage bargaining model had almost reached the “last resort”, the Council of Ministers, openly encouraged by the national representative organizations of workers and employees, is in a hurry to raise the minimum monthly wage for the country as much as possible before the mechanism of its negotiation becomes a reality.

BICA provides data illustrating unjustified and sharp growth of the minimum wage, this time the data presented for the period 2000 – 2017/2018. Through them, employers again remind of several facts:

1. The administratively set minimum wage is growing “explosively” compared to other EU economies;
2. The minimum wage represents an unacceptably large share of the average wage for the country;
3. The increase of the administratively determined minimum wage exceeds the agreed minimum wages by branches and branches;
4. Bulgaria is a leader in terms of the ratio between the annual amount of the minimum wage and the gross domestic product per capita for the EU countries.

In connection with the presented arguments, Bulgarian Industrial Capital Association continues to appeal for a new approach in determining the minimum wage for the country, insisting from now on, regardless of the form that will take the negotiation of the minimum monthly wage for the country, the medium-term budget forecast to consult the social partners. At least in the part where the minimum monthly salary is set in perspective.

In conclusion – regarding the government’s proposal for the minimum monthly salary for the country to reach BGN 650 from January 1, 2021, Bulgarian Industrial Capital Association (BICA) categorically rejects this proposal, relying on the above arguments and considerations. According to the employers’ organization, this further increase in the minimum wage poses even more serious threats than before.

Unfortunately BICA reiterates its very serious doubt that raising the minimum wage to BGN 650 is a pre-determined issue. For this reason, the Association addresses the government and the social partners with a proposal to adopt a decision for a kind of derogation from the minimum monthly wage in the endangered economic activities, which can be easily analyzed on the basis of data on average insurance income, such as them the new amount of the minimum monthly salary, which will probably come into force on January 1, 2021, to be replaced by the current amount of BGN 610.

BICA urges the government, as well as the social partners, to support this compromise solution, which would give a breath of fresh air to endangered economic activities. In a number of them, the low average insurance income is due to an extremely unfavorable international situation, and in others, such as the private security sector, incomes are literally “crushed” by the vicious system of public procurement by a single criterion – the lowest price.

BICA appeals in case the government decides to impose a minimum wage of BGN 650, as of January 1, 2021, to postpone its introduction for endangered economic activities, where the proposed minimum wage exceeds the average insurance income, or is too close to it.