Eurostat: Bulgaria Has Lowest Wages in EU

Bulgaria in EU | June 6, 2012, Wednesday // 12:33|  views

According to EU statistics, the Bulgaria's minimum monthly wage of EUR 138 is the lowest among all EU Member States. File photo

In 2010, Bulgaria had the lowest average gross annual earnings of full-time employees in enterprises employing ten employees (EUR 4 396) among all 27 European Union Member States.

The data belongs to the latest survey of Eurostat, the statistical office of the EU, released in June 2012.

Neighboring Romania is one spot ahead of Bulgaria with EUR 5 891.

These earnings were highest in Denmark (EUR 58 840), followed by Luxembourg (EUR 49 316), the Netherlands (EUR 45 215), Ireland (EUR 45 207, in 2009), Belgium (EUR 43 423) and Germany (EUR 42 400).

In 2006, average annual earnings showed a broadly similar ranking of countries, with median earnings higher than median earnings in all countries except Malta. The proportion of employees considered to be low wage earners in 2006 was highest in Latvia, at 30.9 %, while more than one in four employees were also considered as low wage earners in Lithuania, Bulgaria and Romania.

Despite some progress, there remains an important level of gender pay gap: gap between the average earnings of men and women in the EU. Women were paid, on average, 16.7 % less than men in 2010 in the EU. The smallest differences in average pay between the sexes were found in Slovenia, Poland, Italy, Malta and Belgium (at less than 9 %). The biggest gaps were identified in Estonia (in 2008), the Czech Republic and Austria (more than 25 %). Various effects may contribute to these gender pay gaps, such as: differences in labor force participation rates, differences in the occupations and activities that tend to be male- or female-dominated, differences in the degrees to which men and women work on part-time basis, as well as the attitudes of personnel departments within private and public bodies towards career development and unpaid/maternity leave.

As on January 2012, 20 of the EU's 27 Member States (all except Denmark, Germany, Italy, Cyprus, Austria, Finland and Sweden), as well as Croatia and Turkey, had national legislation setting a minimum wage by statute or by national inter-sectoral agreement.

Monthly minimum wages varied considerably in January 2012, ranging from EUR 1 801 per month in Luxembourg to EUR 162 and EUR 138 respectively in Romania and Bulgaria. When adjusted for differences in purchasing power, the disparities between the Member States were reduced from a ratio of 13:1 (highest compared with lowest) in euro terms to a ratio of 5:1 in purchasing power standard (PPS) terms. The same countries remained at either end of the range, with a high level of PPS 1 495 in Luxembourg and a low PPS of 272 in Bulgaria (see also the article on minimum wage statistics).

Tax wedge data measures the relative tax burden –this information is provided in relation to low wage earners. The tax wedge for the EU was 39.3 % in 2010, which was slightly lower than five years earlier. The highest tax rates on low wage earners in 2010 were recorded in Belgium, France, Germany, Hungary, Italy, Latvia, Austria, Romania and Sweden (all above 40 %). On the other hand, the lowest tax rates were recorded in Cyprus (2007 data) and Malta, both under 19 %.

Among the EU Member States, it was common to see tax rates lowered over the most recent five years for which data are available through to 2010. The largest reductions were recorded in the Netherlands and Sweden with a drop of 8 % and 6 % respectively. On the other hand, the tax wedge rose at a relatively fast pace in France and Italy.

Average hourly labor costs and the structure of labor costs varied widely across the Member States in 2010. Hourly labor costs in the business economy ranged from EUR 38.44 in Denmark, EUR 37.70 in Belgium and EUR 39.99 in Sweden, to EUR 3.10 in Bulgaria and EUR 4.20 in Romania. These figures include not only the compensation of employees, but also vocational training costs, other expenditure, taxes and subsidies incurred or received by the enterprise.

There were also significant differences within the distribution of labor costs (wages and salaries vis-a-vis social security contributions and other labor costs paid by the employer. Whereas Malta had the highest proportion of labor costs allocated to Wages and Salaries (92.1 %), in Sweden, France and Belgium, the proportion allocated to wages and salaries was around (67 %). Consequently, the three countries with the lowest proportion on wages and labor costs, have higher spending on social security contributions and other labor costs paid by the employer, around (33 %) for each of the three countries.

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Tags: eurostat, Bulgaria, wages, EU, average, gross annual earnings, labor costs, gender pay gap, tax wedge, minimum, monthly, wage, member states


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