Bulgaria Last in EU by Monthly Minimum Wage

Politics » BULGARIA IN EU | February 21, 2012, Tuesday // 12:40
Bulgaria: Bulgaria Last in EU by Monthly Minimum Wage In May 2012, the monthly minimum wage in Bulgaria is supposed to go up by EUR 10 to a total of EUR 148 (or BGN 290). File photo

In January 2012, Bulgaria was once again last in the EU by the monthly minimum wage, which stood at EUR 138.

The data was published by Eurostat, the statistical office of the European Union.

On the opposite end of the ranking is Luxemburg with EUR 1 801.

When adjusted for differences in purchasing power, the disparities between the Member States are reduced from a range of one to thirteen (in EUR) to a range of one to five in purchasing power standard (PPS). At the opposite ends of the scale were again Luxembourg (1 495 PPS per month) and Bulgaria (272 PPS), according to Eurostat.

In May 2012, the monthly minimum age in Bulgaria is supposed to go up by EUR 10 to a total of EUR 148 (or BGN 290).

20 of the EU's 27 Member States (Belgium, Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, and the United Kingdom), Croatia and Turkey had national legislation setting a minimum wage by statute or by national intersectoral agreement.

The 20 Member States concerned together with Croatia, Turkey and the United States can be divided into three groups based on the level of minimum wage on January 1, 2012.

The first group includes the eleven countries with the lowest minimum wages, between 100 EUR and 400 EUR a month: Bulgaria, Romania, Lithuania, Latvia, Estonia, Hungary, the Czech Republic, Slovakia, Poland, Turkey and Croatia.

The second group comprises five Member States (Portugal, Malta, Spain, Slovenia and Greece) and the United States with an intermediate level of minimum wages, from just over 550 EUR to just below 1 000 EUR a month.

The third group comprises six Member States (the United Kingdom, France, Belgium, the Netherlands, Ireland and Luxembourg) in which the minimum wage was above 1 200 EUR per month.

However, it should be noted that for non-EA countries (9 countries in the first group as well as the United Kingdom and the United States) the levels and ranking of minimum wages expressed in euro are affected both by the values of the minimum wages in national currencies and by exchange rates.

Adjusting for differences in price levels reduces the variation between countries: while the minimum wage in euros ranged from 138 EUR to 1 801 EUR in January 2012 (a factor of about 1:13), the minimum wage in PPS ranged from 272 to 1 495 (a factor of about 1:5).

The countries in groups 1 and 2 with relatively lower minimum wages in euros also have lower price levels and therefore higher minimum wages when expressed in PPS. On the other hand, countries in group 3 with higher minimum wages in euros have higher price levels, and their minimum wages in PPS are relatively lower. In addition, as a consequence, the limits between the three groups are partly smoothed out when looking at minimum wages expressed in PPS.

Comparing the ranking of the monthly minimum wages in euros with those in PPS, the most remarkable changes are for Ireland, Hungary and Croatia, all moving by three positions. Several other countries change their position, but only by 1 rank (Belgium, the Czech Republic, Estonia, Spain, France, Latvia, Malta, the Netherlands, Poland, Slovakia and Turkey).

In 2010, the minimum wage level is between 30 % and 50 % of average gross monthly earnings in industry, construction and services (except activities of households as employers and extra-territorial organizations and bodies)

Looking at the minimum wage in relation to average gross monthly earnings in industry, construction and services (except activities of households as employers and extra-territorial organizations and bodies), the highest value is reported for Turkey, followed by France (2009), Slovenia, Malta and Luxembourg. In these five countries the minimum wage is above 45 % of the gross monthly earnings. At the lower end of the scale the Czech Republic, Romania and the United States report minimum wages below 35% of the average gross monthly earnings.

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Tags: \monthly minimum wage, Bulgaria, Luxembourg, eurostat, Purchasing Power Standard, PPS

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