Wealth distribution and income inequality in Bulgaria: Trade union responses

Transcription

1 7-th Annual TURI conference Wealth distribution and income inequality in Bulgaria: Trade union responses Dr. Lyuben TOMEV - Director of ISTUR 1-2 June, Amsterdam

2 Social stratification and income inequality have steadily deepened in the last 25 years High economic growth is not the only foundation for implementing a new incomes policy with a catch-up effect: another option is to have the State playing a growing role in the distribution and redistribution of wealth. The social impact of the new economic governance and the European Semester is tangible. Restrictive policies are undermining potential ways of overcoming the economic crisis and getting a recovery in employment. The "supply economy" imposed in Bulgaria through unprecedentedly low taxes, flat-rate taxation and consistent reduction of social security contributions has run its course, without providing economic prosperity, adequate employment and better living standards.

3 GDP and Average Wage Real Increase in Bulgaria for the period (1990=100.0) Source: NSI , , Real Wage Real GDP 0

4 Average and Minimum wage real increase in Bulgaria for the period (1990=100.0) Source: NSI

5 Minimum/Average Wage Ratio in Bulgaria for the period Source: NSI

6 GDP per Capita, Labour productivity per hour worked, Compensation per employee PPS-Data for Bulgaria, EU27=100 Source: EUROSTAT and own calculations

7 Compensation of employees (% of GDP) Source: EUROSTAT 7

8 Flat tax or regressive taxation?

9 Structure of the tax revenues Source: BG-State Budget 2013, Ministry of Finances

10 Inequality and poverty indicators - Bulgaria Source: EUROSTAT Indicators Income quintile share ratio (S80/S20) Gini coefficient of equivalised disposable income People at risk of poverty or social exclusion At risk of poverty rate after social transfers At risk of poverty rate before social transfers In work at risk of poverty rate (working poor)

11 At risk of poverty thresholds 60% of median equivalised income 2013 (in EUR and PPS monthly for single person) Source: SILC, EUROSTAT

12 Minimum wage, average pension per 1 pensioner, official poverty line (in EUR monthly) Source: NSSI and NSI

13 Low paid workers relative share (2010)

14 Highest and lowest paid economic activities in 2013, A96 Classification (Source: NSI) 10 Highest paid Econ. Activities AW Computer programming and related activities 2497 Air transport 2300 Insurance, reinsurance and supplementary pension funding Head offices, management and consultancy activities Water transport 1674 Telecommunications 1582 Manufacture of tobacco products 1571 Mining of metal ores 1564 Electricity, gas, steam and air conditioning supply 1537 Financial activities Lowest paid Econ. Activities AW Manufacture of furniture 471 Other personal services 471 Manufacture of clothing 458 Food services 451 Repair of personal and household goods 450 Manufacture of wood 447 Security and investigation activities 432 Fishery 424 Manufacture of leather, footwear 415 Services to buildings and landscape 396

15 Decentralization of collective bargaining More and more often happens employers' organizations at sectoral / branch level to refuse to participate in collective negotiations For the first time is applied the opportunity for opt-out clauses, in relation to wage level Trends towards deregulation and decentralization, refusal to adopt automatic schemes of wage indexation In many cases appears the so called "Trade-off" effect In the framework of the European semester, additional negative influence has been caused by two of the European Commission recommendations : - For the fast-growing labor costs" - For "the negative impact of the МW and Minimal Insurance Incomes increase on the employment of low-skilled workers

16 Trade union responses - 1 Efforts in two directions: - Primary distribution of income (tools CAs and MW); - Redistribution of income (changes in the tax system and improvement of the social security system) Mass campaign on Collective bargaining (guides, recommended wage systems, Expert collective bargaining network) Legislative changes related to remuneration Increase of MW up to 50% of the AW key target 2017 Extension of branch collective agreements Step by step changes in the tax system introduction of tax-free threshold =МW and a second stage from the maximum insurable income (20%) Increasing the amount of social security contributions for pension by 1% over the next two years

17 Trade union responses - 2 More active participation of the TU in the European semester: - CITUB and CL PODKREPA jointly with the Anti-poverty center and other NGO s established a National Pilot Alliance for a democratic, social and sustainable European Semester; - Elaboration of critical analyses of main documents and distribution of opinions and messages to key actors and stakeholders in EU and Bulgaria. Especially Important documents in the framework of the European semester: - Annual Growth Survey and the Joint Employment Report; - Country Report,incl. an In-Depth Review on the prevention and correction of macroeconomic imbalances; - National Reform Programme; - Country Specific Recommendations.