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Wage growth outruns labour productivity fivefold

Author: Dnevnik.bg Date: Sun, Mar 15 2009 7 Comments, 3248 Views
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Salaries in Bulgaria and Romania have registered the biggest increase in the European Union in 2008, showed data by Eurostat, the EU's statistical office.

Wage and other personnel costs per hour worked jumped by 17.9 in Bulgaria and by 21.5 per cent in Romania in the final quarter of 2008 compared to a year before.

At the same time, the two countries offer the lowest wages within the bloc, lagging several times behind other member states.

Bulgaria and Romania also continue to fall drastically behind with the EU’s average labour productivity, which is a main wage forming factor.

Eurostat figures revealed that Bulgaria accounts for only 36 per cent of the union’s average gross domestic product (GDP). The National Statistical Institute (NSI) said this week labour productivity rose only 3.4 per cent in 2008 compared to the previous year.

The cost of labour showed the slightest growth in Malta and France. The statistics revealed old member states raised wage costs by 3.9 per cent from October to December, which is less than for July to September.

Meanwhile, the Confederation of Independent Trade Unions in Bulgaria (CITUB) announced that the National Sports Academy pays the highest wages in the country’s higher education system of 1 347 leva. The medical universities in Sofia, Plovdiv and Pleven are at the other end of the scale with monthly salaries ranging from 709 to 750 leva. Wages at the Sofia University came out top in terms of highest rise last year with a jump of around 50 per cent, the union said.

Source: Dnevnik.bg

    Anonymous Tom Sun, Oct 04 2009

    This comment has been hidden by the moderator because it contained квалификации.

  • Anonymous
    ExPat Rating:
    neutral
    #6 13, 14, Mon, Mar 16 2009

    this is precisely the problem which unfortunately will make the recovery process in BG very difficult and even delayed. Because if the quality and productivity of BG labor is not dramatically increasing BG will loose a significant share in (future) FDI's. Because even if labor costs are "cost effective" compared to CE but the productivity is also only 1/3 there is no advantage to shift production to BG (only 1/3 labor cost but only 1/3 productivity results in the same costs if production stays in CE, because there is no benefit to shift it to BG). Not mention the extra [...]

    Read the full comment effort for integration, communication, transport etc.

    Other countries (e.g. RO) by devaluating the currency reducing the labor cost to get competitive again, but due to the currency board this effect is not possible in BG.

    SP and GR are suffering similar problems, they have increased their labor costs but did not increase labor productivity accordingly and now have to pay the price (much higher refinancing cost within the EURO and very pessimistic outlook for economic recovery).

    I strongly hope that this macro effect will get understood very quickly by each Bulgarian citizen, that higher salaries have directly to do something with higher quality of work and higher productivity, otherwise a fast increase in living standard will not be possible.

    Additionally if BG is continuing in hindering itself to pick up prepared EU funding by petty discussion and inabliltiy to adopt administration the outlook gets even more worrying....

  • Anonymous
    100Jan Rating:
    neutral
    #5 11, 06, Mon, Mar 16 2009

    Actually, GDP per capita of Bulgaria with $13,200 is noticeably higher than Romania's $12,500.

  • Anonymous
    sharadski Rating:
    neutral
    #4 02, 30, Mon, Mar 16 2009

    minimum you do minimum you get.
    It begins with education.
    It begins working with skills.
    It is hours worked not time, but productivity. Of 8 hrs paid 6 hours is reasonable. No pain bo gain.

  • Anonymous
    Dianne Hatton Rating:
    neutral
    #3 20, 53, Sun, Mar 15 2009

    Higher wages means higher production costs, higher production costs means higher selling price, higher selling price means overpriced against far eastern imports, means factories and manufacturing industry closes down.

    This is fact and is showing across most of Europe as the manufacturing industries are closing at the fastest rate in history as cheap Far Eastern imports replace them.

    Unfortunately, though Bulgarians and Romanians do deserve higher wages, the final effect is inevitable and dooms both countries manufacturing industry.

    Just look at the UK manufacturing industry which has either [...]

    Read the full comment moved to the far east or closed down to see this.

    Look at the steel industry in Bulgaria if you want proof.

  • Anonymous
    Mark Montgomery Rating:
    neutral
    #2 10, 20, Sun, Mar 15 2009

    I'm glad that salaries are increasing in Romania, Romanians deserve it, I lived in Romania in the early 90's and at that time the monthly salaries were less than $100. I never could figure out how people survived on such a small salary. Mark Montgomery boboberg@nyc.rr.com

  • Anonymous neutral
    #1 09, 43, Sun, Mar 15 2009

    Romania especially and Bulgaria in 10 years are going to have one of the highest salaries in the EU. Dont try and say that Romania is similar to you cause its not! Romania is one of the fastest developing EU States in the EU. You and Romania have nothing in common. Bulgarian media need to understand that very fast.

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