People cannot stay in Bulgaria, since their incomes lag even behind those in Serbia, Montenegro and Romania. Radev's cabinet promised income growth, but instead preserved the "cheap labor" model. What does this mean?
Will Bulgaria be a low-wage country again
How long will Bulgaria be a country of cheap labor?
Will Bulgaria remain a country of the cheapest labor?
Who wants Bulgaria to remain a country of low wages
In the election promises of „Progressive Bulgaria“ and Rumen Radev, the people were in the first place - and "there should be no poor people in a European Bulgaria", but in the budget calculations they were overtaken by employers. The minimum wage (MW), which according to the current formula would reach 690.44 euros in 2027, has been calculated 30 euros less than the Ministry of Finance (MF).
The government promises income growth, but in fact it preserves cheap labor. Bulgaria consistently holds the last place in the EU in terms of minimum wage - 620 euros, 160 euros below the penultimate Latvia. Even non-EU countries such as Montenegro (670 euros), Serbia (743 euros), North Macedonia (624 euros) and Turkey (621 euros) have overtaken us. Among the Balkan countries with a national minimum wage lower than Bulgaria's, only Albania is.
In its three-year budget forecast, the Ministry of Finance foresees a minimum wage of 660 euros in 2027, 680 euros in 2028 and 710 euros in 2029. If these calculations come true, its annual growth will slow to 6.4%, 3% and 4.4% respectively. The increase in 2028 will be only 20 euros.
These intentions mean that Bulgaria will remain the country with the lowest minimum wage and the cheapest labor in the EU. Radev's social policy begins with savings from the lowest paid, which the government calls a “new mechanism“.
Without a formula, but with good political will
Rumen Radev's cabinet proposes to replace the formula for calculating the minimum wage - 50% of the average gross salary, with a onerous procedure. The new mechanism leaves the current minimum wage as a minimum, and four economic indicators determine the upper limit to which it can be agreed.
Employers and unions negotiate between the two numbers. If they do not agree, the government has the last word. That is, the automatic formula will be replaced by a political decision taken “according to the budget's capabilities“, as Social Minister Natalia Efremova explained.
The automatic guarantee that the lowest incomes will follow the growth of the average wage has been removed. In its place comes an annual bargaining session, in which some will want more income, others - lower expenses, and the cabinet will decide how much social policy it can afford.
The old formula was not without its flaws. It followed the average wage, without taking into account the differences between industries, enterprises and regions, and the automatic increase also increased the costs related to the minimum wage for the state and municipalities. In the event of a sharp increase, small companies, labor-intensive industries and businesses in regions with a weak economy will be hit the hardest. The weaknesses of this mechanism required it to be fixed.
But the cabinet preferred to remove the guarantee that the minimum wage would grow along with the average wage and retained the option to intervene as an arbitrator.
The Coalition of Cheap Labor
The political responsibility for the cancellation of the formula lies with “Progressive Bulgaria“, which pushed through the change with the 2026 budget. However, the rulers were not left alone - in the budget committee, the proposal was supported by GERB and “Democratic Bulgaria“. Beyond the usual parliamentary skirmishes, it turned out that the government and the opposition can find common ground - when deciding how cheap foreign labor should be.
From the opposition, only “We continue the change“ came up with a specific calculation: without the cancellation of the formula, the minimum wage for 2027 would have been 690.44 euros. However, the numbers clearly show who the cabinet has approached: employer organizations consider a realistic increase of 5-6%, and the Ministry of Finance is betting on 6.4%. A remarkable “social” balance - the government is only half a percentage point from the upper limit requested by business, and more than 30 euros below the amount that the canceled formula would give.
The calculation - for nearly 600,000 of all employed
The consequences will not be limited to a small group of unskilled workers. According to data from the Ministry of Labor and Social Affairs, the latest increase in the minimum wage has affected nearly 600,000 people, almost every fifth worker in Bulgaria. Among these people are also personal assistants working in social services, foster parents and people on employment programs.
The government does not hide its motives: the new mechanism should “limit“ the growth of wage costs. The MRP includes remuneration in social services, personal assistance, employment programs and other publicly funded activities. Its growth also increases the costs of municipalities and service providers.
This explains why the Ministry of Finance wants control over its size. But “the budget has no option“ is a political choice, and at the same time the government withdrew its proposal for a salary cap for the heads of state-owned enterprises.
Machines - expensive, workers - cheap
Employers like to tie wages to productivity, as if it depends solely on the efforts of the worker. But productivity is also the result of the machines, technologies, organization and qualifications in which the business has invested - or saved on investments.
Only 35% of Bulgarian companies use more than one advanced digital technology, compared to an EU average of 51%, and generative artificial intelligence is systematically used by 22%, compared to 37% in the EU. For the last financial year, the European Investment Bank data shows that 71% of Bulgarian companies have invested in 2025, compared to an EU average of 86% - the lowest share in the Union. The EIB study defines an investment as an amount of over 500 euros per employee.
With such modernization, it is easier to save 30 euros from the worker's salary than to invest in the machine that will make his work more productive. Bulgarian business simultaneously complains about a shortage of workers and insists that the growth of the lowest wages be limited. And Bulgaria is already a European champion in low-wage labor. According to Eurostat data for 2022, 26.8% of employees receive low wages, compared to 14.7% on average for the EU. This means more than every fourth worker - the highest share in the Union.
You cannot want people to stay in Bulgaria while their incomes lag even behind those in Serbia, Montenegro and Romania. Instead of encouraging enterprises to invest, modernize production and lighten payments, the state preserves their most convenient competitive advantage - the cheap worker. However, the "cheap labor" model does not solve the shortage of people. It is one of the reasons for it.
This text expresses the opinion of the author and may not coincide with the positions of the Bulgarian editorial office and the State Gazette as a whole.