site.btaNet Living Wage in June at BGN 1,268, Most Workers Earn Less, CITUB Data Shows

Nearly two-thirds of working people fall short of a living wage, their number growing by a further 222,000 people to around 1.7 million workers by May 2022 compared to November last year, according to the Consumer Price and Living Wage Monitor for the second quarter of 2022 by the Institute of Social and Trade Union Research (ISTUR) of the Confederation of Independent Trade Unions in Bulgaria (CITUB), the results of which were presented by CITUB President Plamen Dimitrov and ISTUR Deputy Director Violeta Ivanova on Monday.

The net monthly income needed to support living is BGN 1,267.53 for a single working person living alone, and BGN 2,282 total for a family of three (two working adults and a child under 12 years of age). Since the beginning of the year, the income needed for subsistence has increased by 4.2% and by 15.6% on an annual basis. The increase in the net monthly income required for subsistence over a one-year period is BGN 199 for a single person, and BGN 358 for a family of three.

Over 45% of all Bulgarians work on a salary of up to BGN 1,000, Dimitrov stressed. He noted that the living wage to minimum wage ratio is worsening. Those who earn the minimum wage are certainly getting poorer in nominal and real terms, Dimitrov said, adding that CITUB insists that the minimum wage should follow the living wage and the two values will hopefully be equalized. In his words, this would mean there will be no working poor.

The cost of living continued to rise during the quarter, Ivanova noted, highlighting a more subdued pace compared to the previous quarter. She mentioned some of the reasons for the increase in the cost of living income - the prices of energy, food, natural gas, and oil. Bulgargaz announced that it is proposing new prices for natural gas starting August 1, Ivanova said, adding that ISTUR expects the Energy and Water Regulatory Commission to announce the final decision on gas and drinking water prices any day now.

According to CITUB, the anti-crisis measures of the introduction of 0% VAT on bread and flour and the BGN 0.25 per litre fuel discount are not effective enough. An express survey in the period July 6-9 showed that the real reduction in bread prices is between 2 and 6%, Ivanova said. According to her, the promised 20% lower prices can only be found in large chains, which are not available to all households. CITUB predicts that bread will stay cheaper for a short period because the price of wheat from the new harvest is almost double the price of the previous year, despite a good harvest, the expert explained.

The ISTUR survey shows that prices of the "bread and cereals" group increased by 11.6% on a quarterly basis and by 30.3% on an annual basis. The quarter-on-quarter and year-on-year increases for "meat and meat products" were 9.4% and 20.4%, respectively. Egg prices increased by 37.5% y-o-y and 6.5% q-o-q. "Milk and dairy products" saw a 9.3% quarter-on-quarter increase, with cheeses rising by around BGN 2 to 3.20 year-on-year and cheese by around BGN 5.

Non-food goods and services showed an acceleration of 3.1% in the last quarter and 15.6% year-on-year. There was a notable increase in "electricity, gas and other fuels" of 23% y-o-y. "Household furnishings and appliances" showed quarterly and annual growth of 4.8% and 12.5%, respectively. The "transportation" group showed quarter-on-quarter and year-on-year growth of 6.4% and 32.6%, respectively.

Exports of goods from Bulgaria to the EU increased by 36.9% year-on-year. Compared to last year, manufacturing growth accelerated by 20.2%, manufacturing by 21.1%, mining by 18.5% and energy by 14.1%.

The caretaker cabinet has two tasks - to deal with energy prices and guarantee gas supplies at affordable prices, as well as to update the budget, CITUB leader Dimitrov stressed.

CITUB is pushing for an increase in the minimum wage to BGN 800 by early 2023 at the latest. This is crucial given the price increases and the difficult winter months ahead. The poverty line in turn should be BGN 541 for 2023, which will allow more households to receive energy allowance, the Confederation believes.