There is a breakthrough, but not a final agreement between unions and employers on the formula for calculating the minimum wage. The social partners have reached an agreement on the indicators by which it should be determined. These are the Price Index of the Small Consumer Basket, the gross median wage, the gross average wage and the gross value added per employee for the last 10 years. However, what should be agreed upon at tomorrow's regular meeting and will a compromise be reached - this topic was commented on in the BTV studio by Dobrin Ivanov, Executive Deputy Chairperson of the Bulgarian Industrial Capital Association.
"These criteria for the adequacy test are the bone of contention".
He described the negotiations as advanced, but stressed that the most important dispute has not yet been resolved. According to him, the European directive provides for two separate procedures - one for determining the amount of the minimum wage, and the other for assessing its adequacy. “We once agree on the amounts by year and at a certain period we assess whether this mechanism by which we determine the amount is adequate to the economic conditions.” It is precisely with this adequacy test that the big dispute remains. “And it is precisely these criteria for the adequacy test, these reference values, that are the bone of contention and there is something that we have not yet reached an agreement on. Each side has its own proposal and its own position.”
Employers insist that comparable amounts be used in comparisons. “We want in the adequacy test, if we enter into relations that compare the minimum wage with the average or median, to compare with equal amounts, i.e. gross with gross, net with net, basic with basic.” “The cost of living” – the big red line. One of the most serious points of disagreement is the unions’ proposal to include the cost of living in the adequacy test.
Dobrin Ivanov has serious reservations about including the cost of living. “We cannot accept the cost of living due to several facts.” He explained that employers are not convinced by the methodology by which it should be calculated. “We are not clear about the methodology for calculating this cost of living, what is included in it. We do not yet have an official methodology that has been approved by the National Statistical Institute.”
He added: “We do not think it is correct to take into account the value from the CITUB in the calculations, because there is indeed a bias there and we have serious reservations regarding the methodology used by the CITUB.”
Dobrin Ivanov pointed out that for employers the acceptable range is lower. “For us, the mechanism that defines a range for negotiation between 620 and 667, according to our calculation, or 670, is acceptable.” He also indicated a specific indicative value that, according to employers, would be justified. “For us, an increase in the minimum wage is acceptable, which compensates, which preserves its purchasing power. This means about 5% growth.”
According to him, this would lead to a minimum wage of about 645-650 euros. “If there is no agreement between the social partners, where the contractual principle is still given priority, the government has the authority to set the minimum wage, again in the same range that the social partners agreed on.”
According to him, the new mechanism will give more predictability to both workers and businesses. “This will give predictability to workers in terms of their income for the next year and to employers in terms of their labor costs for the next year.”
See more on the topic here.
