The Lowest Minimum Wage in the EU is in Bulgaria, the Highest - in Luxembourg

Business » FINANCE | July 22, 2022, Friday // 17:35
Bulgaria: The Lowest Minimum Wage in the EU is in Bulgaria, the Highest - in Luxembourg @novinite.com

As of July 1, 2022, minimum wage levels vary widely among European Union member states. The difference between the highest minimum wage registered in Luxembourg (2,313 euros) and the lowest - in Bulgaria (363 euros) amounts to 6.4 times. This is indicated by the latest data of the European statistical agency Eurostat, published today on its website, reports BTA.

Minimum wages are imposed by legislative act, often after consultation with the social partners, or directly by a national cross-sectoral agreement.

The minimum wage in Bulgaria became BGN 710 from April 1. This was agreed upon in March by the social partners at an extraordinary meeting of the National Council for Tripartite Cooperation (NCTC). The previous level of the minimum wage set on January 1, 2021 was BGN 650 (€332), according to data from the National Social Security Institute.

The average annual growth rate of minimum wages between January 2012 and January 2022 was highest in Romania (+12.6 percent), followed by Lithuania (+12.1 percent) and Bulgaria (+9, 4 percent). The lowest average annual growth rates were recorded in France and Malta (+1.4 percent each), followed by the Netherlands (+1.9 percent).

As of July 1, 21 of the 27 EU member states have introduced a national minimum wage. The countries without one are Denmark, Italy, Cyprus, Austria, Finland and Sweden.

The national minimum wage rates reported according to the Eurostat methodology at the end of the relevant half-year, are presented as monthly gross income indicators, i.e. before deducting income taxes and social security contributions payable by the employee. These deductions vary from state to state.

Due to these differences and for the purpose of a more applicable comparison, the statistics also take into account the minimum wages of the EU countries expressed in purchasing power parities (PPP) for household final consumption expenditure, expressing how many currency units a certain amount of goods and services costs in the different countries, and eliminating the effect of differences in price levels between countries created by fluctuations in the exchange rates of their currencies.

This adjustment reduces differences between countries by comparing purchasing power standards (PPS). When comparing the minimum wages expressed in PPP, the country with the lowest levels of the indicator is Latvia - 630 euros. Bulgaria occupies the second place among the countries with the lowest minimum wage, expressed in PPP, with 653 euros. Luxembourg remains with the highest indicator (1747 euros).

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