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BCCI: Raising salaries and pensions will additionally burden the business

 
Prime Minister Boyko Borisov’s announcement from Aksakovo that the government will decide to increase the minimum wage on Wednesday, because of the larger budget revenue, leaves the employers from BCCI with the impression that new burdens are being put on the business. Businesses still pay higher electricity prices and thus subsidize household consumers. 
The decision to increase the minimum wage is taken despite the fact that Budget 2011 was adopted with a macro-framework in which a minimum wage of BGN 240 was specified. Practically, wages in the light economy have already grown because of the levels of social security thresholds. 
 
If the minimum wage is increased from BGN 240 to BGN 270, in the public sector additional BGN 7 001 880 will be needed for wages and BGN 1 263 839 for social securities, which amounts to BGN 8 265 719. In the private sector, over BGN 36 904 950 will be needed for salaries and BGN 6 661 343 for social securities, or a total of BGN 43 566 293 additionally. 
These sums are calculated only for the employees that receive a salary of BGN 240. If the increase of the minimum wage triggers a chain reaction for the other salaries, the required sums will increase.
According to a survey conducted by the Bulgarian Chamber of Commerce and Industry, the levels of salaries should be directly linked to the amount of work done. As far as the proposals of the Minister of Labour and Social Policy to increase wages in 2011, the latest survey of the Chamber shows that 5.6% of employers accept the idea, but consider to put it in practice by reducing the number of employees, while 14.3% wouldn’t dismiss anyone. About 70% of employers disagree with the increase of wages.
Workers and employees are divided almost in half in their opinion whether an increase of salaries should be bound with staff reduction. 51.22% are “for” the reduction of staff. To the question, whether they are ready to increase the wages of all employees proportionally, in case there is an administrative increase of the minimum wage, only 10.4% of employers give a positive answer. The rest of them are against this idea. The opinions of employees percent wise are the opposite. 
Around 40% of employers consider that an increase of wages will result in an unemployment growth as well, while according to over 53% companies will transfer from official to informal economy.
“Raising salaries and pensions will additionally burden the business that is why decisions in favour of business must be taken as well”, the President of the Bulgarian Chamber of Commerce and Industry, Mr. Tsvetan Simeonov said. 

06.06.2011

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