Union Confederation Pushes for Living Wage and Pension Contribution Hike in Bulgaria

Society | September 25, 2024, Wednesday // 16:00|  views

The Confederation of Independent Trade Unions in Bulgaria (CITUB) is calling for a 10% salary increase in the public sector next year, which would require an additional 1.8 billion leva. Union President Plamen Dimitrov emphasized the need for the swift introduction of a "living wage," which would be tied to the level of income necessary to ensure a decent standard of living for workers and their families. According to CITUB’s data, as of the second quarter of this year, a worker needs 1,453 leva per month to cover basic needs.

Dimitrov also suggested that by next year, all links between social payments and the minimum wage should be severed. He argued that payments, benefits, and wages for disabled people and others should no longer be tied to the minimum wage. Instead, income policy should reference a "living wage" as a benchmark, with the minimum wage gradually reaching this level.

For the 2025 budget, CITUB is pushing for the maximum monthly insurance income to increase to 4,275 leva, reflecting a 14.5% growth in average insurance income this year. They also propose a 10% increase in the pension ceiling, reaching 3,740 leva, and the adjustment of pensions based on the "Swiss rule," which currently indicates an increase of 8.7% from July 1, according to the Ministry of Finance.

Dimitrov warned that Bulgaria must transpose the European directive on the minimum wage by November 15 to avoid potential financial sanctions from the European Commission. He expressed willingness to discuss changes with employers, who have focused on whether the minimum wage should be 50% of the average wage. CITUB advocates for a minimum wage that reflects a decent standard of living, as seen in other EU member states.

He rejected business concerns that the proposed 15.4% minimum wage increase, bringing it to 1,077 leva next year, would harm the labor market. Dimitrov noted that the average wage grew by 17% over the past year, making such increases feasible and necessary, as companies, including the state, are already adjusting wages accordingly.

To strengthen the social security system, CITUB proposes gradually increasing pension contributions over the next 20 years. They suggest raising contributions by 1% annually, alternating between the State Social Insurance Fund and the second private pension pillar, with the aim of ensuring that by 2045, pension income will replace 85% of a worker's previous income. Dimitrov emphasized the need for this approach, stating that the system requires shared responsibility from all parties to ensure adequate pension income in the future.


Tags: CITUB, salary, increase, wage

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