Let me explain why this might be problematic. From 1919 to 1987 Denmark had something called “dyrtidsregulering”.
Whenever something got more expensive (inflation), the wages in the public system and the cost of services would also increase.
Wages where coupled to inflation, but then came the 1970’s economic crisis of stagnation at the same time as there where high inflation.
So the regulation mechanism of “dyrtidsreguleringen” became the instrument that fueled inflation. A manageable situation when there is economic growth, but during stagnation or recession an absolute nightmare for employers, companies and the ability to sell goods worldwide at a competitive price.
When Denmark decided to peg its currency to the Deutsche Mark, (and later the euro), it could not keep such inflation policies, so it was put on hold in 1983, and later scrapped completely by 1987. The unions accepted this as they also realized stable prices and low inflation was in the interest of the workers they represented.
If I presume that gray economy is rampant in BG and that many employers are declaring minimum wage but paying the rest under the table, parliament’s decision to raise the minimum wage makes sense and also the average is incorrect.
I suppose either Bulgarian lawmakers or, more likely, one between the journalist reporting the news and the journalist translating to english has no idea that average and median are two different concepts
Wait… is this a onetime increase in the minimum wage in such a manner or are they trying to make it yearly? If it’s yearly, that’s kinda stupid.
Current average monthly wage is 1787 bgn, current minimum wage is 780 bgn. The new rule would increase that to 894 bgn.
In the UK it is approx 60% of the median salary
That’s… bold… Like, incredibly bold. I can understand taking the median, but taking the mean is basically bound to end in a wage-price spiral. And I’m usually one of the last people to throw that term around.
For example, in Poland, average salary is caluclated from the companies that hire 10+ workers
Everything is trial and error. At least it is something. Everything cannot be fixed in one step. “One step at a time”, as we say!
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[deleted]
Infinity wage
And what if the national average goes down
That might not be a good idea.
Let me explain why this might be problematic. From 1919 to 1987 Denmark had something called “dyrtidsregulering”.
Whenever something got more expensive (inflation), the wages in the public system and the cost of services would also increase.
Wages where coupled to inflation, but then came the 1970’s economic crisis of stagnation at the same time as there where high inflation.
So the regulation mechanism of “dyrtidsreguleringen” became the instrument that fueled inflation. A manageable situation when there is economic growth, but during stagnation or recession an absolute nightmare for employers, companies and the ability to sell goods worldwide at a competitive price.
When Denmark decided to peg its currency to the Deutsche Mark, (and later the euro), it could not keep such inflation policies, so it was put on hold in 1983, and later scrapped completely by 1987. The unions accepted this as they also realized stable prices and low inflation was in the interest of the workers they represented.
https://danmarkshistorien.dk/vis/materiale/dyrtidsregulering-1919-1987
Could not find a good source in English, but there is a few words from the Danish Central Bank in here at page 30 https://www.nationalbanken.dk/en/pressroom/speeches/Documents/2022/KU02112022Final%20(002).pdf
If I presume that gray economy is rampant in BG and that many employers are declaring minimum wage but paying the rest under the table, parliament’s decision to raise the minimum wage makes sense and also the average is incorrect.
I suppose either Bulgarian lawmakers or, more likely, one between the journalist reporting the news and the journalist translating to english has no idea that average and median are two different concepts
Wait… is this a onetime increase in the minimum wage in such a manner or are they trying to make it yearly? If it’s yearly, that’s kinda stupid.
Current average monthly wage is 1787 bgn, current minimum wage is 780 bgn. The new rule would increase that to 894 bgn.
In the UK it is approx 60% of the median salary
That’s… bold… Like, incredibly bold. I can understand taking the median, but taking the mean is basically bound to end in a wage-price spiral. And I’m usually one of the last people to throw that term around.
For example, in Poland, average salary is caluclated from the companies that hire 10+ workers
Everything is trial and error. At least it is something. Everything cannot be fixed in one step. “One step at a time”, as we say!