Bulgaria: Latest working life developments – Q4 2016
Political uncertainty alongside positive economic trends, including increased GDP and falling unemployment, are the main topics of interest in this article. This country update reports on the latest developments in working life in Bulgaria in the fourth quarter of 2016.
Productivity and employment rates
Macroeconomic indicators in the last quarter of 2016 showed weak but positive trends. Bulgarian gross domestic product (GDP) increased by 3.4% in the third quarter of 2016 on an annual basis, and by 0.8% compared with the second quarter, according to figures from the National Statistical Institute (NSI).
The proportion of employed people in the population aged 15+ was 49.9%, a decrease of 0.4% from the same quarter of 2015. The unemployment rate was 7.0%, a fall of 1.3% compared with the third quarter of 2015.
Positive business outlook
According to an NSI business survey in December 2016, 24.5% of industrial enterprises indicated a shortage of labour as a factor that limits their activity.
However, the state of business is improving, according to survey data (PDF) from the Bulgarian Industrial Association (BIA). In 2015, 12.0% of employers declared an improvement in their business. In 2016, this rose to a third of all company respondents. At the same time, a high proportion of companies (35.0%) still reported deteriorating performance. According to the survey, the main focus for employers includes the need to invest in continuous employee training and wage growth linked to achieving satisfactory levels of skills and competences.
New president supported by socialist party
The Bulgarian presidential elections took place in two rounds between 6 and 13 November 2016. Rumen Radev, an independent candidate supported by the Bulgarian Socialist Party, was elected president with 59.37% of the votes. Tsetska Tsatcheva, the chair of the Bulgarian parliament and candidate of the ruling GERB party, received a 36.16% share.
Due to the presidential election results, the Prime Minister, Boyko Borisov, resigned. However, the former president, Rossen Plevneliev, was not able to establish a caretaker government within its mandate.
This political instability is expected to be solved when the new president takes over on 21 January 2017 and by the forthcoming early parliament elections.
Labour-related legislation changes
The state budget for 2017 (PDF) announced that the minimum statutory wage for 2016 will be increased from BGN 420 (€210) in 2016 to BGN 460 (€230) per month. A one percentage point increase in social security contributions for pensions will be introduced in 2017.
The working time requirement for pension entitlement is due to increase by two months every year, until it reaches 35 years and 8 months for women and 38 years and 8 months for men in 2019. Details of all social security changes were published by the National Revenue Agency on 4 January 2017.
Union campaign for salary increases
The Confederation of Independent Trade Unions in Bulgaria (CITUB) officially launched its ‘I want BGN 100 more in my salary’ campaign. This initiative is part of a larger campaign to increase incomes, which will run throughout 2017. The impetus for the campaign is the fact that Bulgarian industry enjoys one of the highest profit margins in Europe yet currently pays some of the lowest wages.
The labour market is shrinking and it is increasingly difficult to find even unqualified staff. With employees in such demand, CITUB believes that every employee has the right to demand at least an additional BGN 100 per month for 2017.
The campaign started with a page on Facebook, including downloadable New Year greetings e-cards for employers, featuring the text: ‘I want to be paid another BGN 100. For a better 2017’. Any employee who wanted a salary increase could send the cards.
The campaign has an official website, featuring a questionnaire for employees to report on their conditions of pay and on payment irregularities.
In memoriam: Krustio Petkov
Professor Krustio Petkov, the founder and first president (1990–1997) of CITUB, passed away on 23 December 2016 after a long illness. Professor Petkov was a remarkable scientist who produced many high quality scientific publications, a politician, patriot and union leader devoted to democracy. He will be remembered as one of the builders of the modern trade union movement in Bulgaria.