Low Minimum Wage Encourages People to Live on Benefits – Labor Minister

Domestic | January 15, 2015, Thursday // 12:38|  views

Bulgaria's Minister of Labor and Social Policy Ivaylo Kalfin, photo by BGNES

The low minimum wage disincentivises people from working and they prefer to live on benefits, according to Ivaylo Kalfin, Bulgaria’s Minister of Labor and Social Policy.

Kalfin met Thursday with representatives of the Directorate-General for Economic and Financial Affairs and the Directorate-General for Employment of the European Commission, according to the press office of the Ministry of Labor and Social Policy.

According to data of the Labor Ministry, as cited by dnevnik.bg, the number of lastingly unemployed in Bulgaria is 140 000 (40.9% of all registered unemployed people), while the number of people receiving minimum wage is 170 000, or 8% of all employed.

Kalfin suggested that there were entire districts in Bulgaria where the people were living on benefits and had no incentive to seek work as the net minimum wage had been below the poverty threshold prior to January 1, 2015.

He underscored that the increase in the minimum wage was seen as a burden by the representatives of small businesses, adding that a minimum wage freeze would result in a dramatic increase in the number of unemployed in the long term.

Kalfin made clear that the Labor Ministry planned to reduce the number of lastingly unemployed through the measures under the National Action Plan for Employment financed with BGN 73 M from the state budget and the new operational program Human Resources Development to be launched Thursday.

In a Thursday interview for the Bulgarian National Radio, Kalfin also drew attention to the fact that migration to big cities was creating major problems both for the cities and for the people who were moving.

He said that the authorities were striving to increase employment in the spheres of agriculture and forestry, includingtemporary or part-time work, so that the people would be able to find jobs in the districts in which they were living.

As regards pension reform, he said that the changes were aimed at ensuring that one would receive a pension amounting to 70% of their salary.

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Tags: Ivaylo Kalfin, Minister of Labor and Social Policy, minimum wage, benefits, unemployment rate


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