1. Lyuben TOMEV, Director of ISTUR at CITUB
European Economic and Social Committee
Bulgarian Presidency of the Council of the European Union
Group II Workers' Group
EXTRAORDINARY WORKERS' GROUP MEETING June 2018, Sofia "Working Europe and European Pillar of Social Rights“ Wage inequalities in EU
Lyuben TOMEV, Director of ISTUR at CITUB

2. Compensation of employees per hour worked - 2017

3. Compensation per hour worked
2017 г. C/1h in Bulgaria 5.1 EUR (ЕU – 23.1)
Nominal gap 4.5 times, and in PPS – 2.2 times
Comparative level of C/1h in PPS 46.3% of EU
2007 г. C/1h in Bulgaria 2.3 EUR (ЕU )
Nominal gap 8.5 times, and in PPS – 3.9 times
Comparative level of C/1h in PPS 25.6% of EU

4. Minimum wages – levels and growth rates (2018/2017)
High levels of MW – Luxembourg, Ireland, Netherlands, Belgium, France, Germany, UK ( EUR), average rate - 1.8%
Middle levels of MW –Spain, Slovenia, Malta, Greece, Portugal ( EUR), average rate – 2.9%
Low levels of MW –
(the 10 new member states: Poland 503, Bulgaria 261 EUR), average rate – 8.4%

5. Average monthly salary 2017 (Gross, Net and in PPS)
State
Gross
(EUR)
Net
(PPS)
Bulgaria
542
423
887
Denmark
5191
3270
2436
Luxembourg
4412
3159
2612
Netherlands
2855
2155
1944
Estonia
1221
957
1305
Slovakia
980
748
1121
Hungary
955
635
1076

6. Low paid workers – relative share (2014)

7. Apparent labour productivity and average personnel costs in Manufacturing 2015 (thousand EUR per employed/employee)

8. Wage adjusted labour productivity and gross operating rate in Manufacturing 2015 (%)

9. Average wage in EUR and PPS in Manufacturing 2017

10. Main conclusions from international comparisons
In the Bulgarian industry there is social dumping and low labour costs. Wages and labour costs are much lower than the labour productivity;
In the sectors where the nominal labor productivity is lower, this is offset by a higher rate of profit;
There is a significant problem in the distribution of added value between labor and capital in favor of capital;
There is significant difference between the pay of labour in Bulgaria and the other member states – from 140% to 950% (in nominal terms);
Even when adjusted nominal rates with comparative price levels, the pay gap remains high – from 120% to 440% higher wages in the other member states compared to Bulgaria.

11. Policy recommendations
These differences can`t be overcome within the expected upward convergence if the imposed social dumping and cost competitiveness policy does not change;
There is a need for:
- The emergence of new quality high added value jobs;
- Greater fairness in the distribution of added value between labor and capital;
Important role of the ETUC Initiative Alliance for upward convergence of wages