Prof. Durankev: Freezing the minimum wage is a recipe for social explosion

The government is discussing a "freeze" on the minimum wage, but is failing to make prices do the same. With this ironic observation, economist Prof. Boyan Durankev commented on the cabinet's intentions on Facebook, stressing that inflation "has one unpleasant property – it does not read government decrees". It continues to eat away at people's purchasing power, regardless of political decisions.

According to him, with inflation at 6.9%, an unchanged minimum wage means that in a year, the worker will be able to buy approximately 6.9% fewer goods and services. "In economic terms, this is called a decline in real income. In human terms, it is called less food, less heating, and more bills," points out Prof. Durankev. According to him, freezing the minimum wage under such conditions may improve certain budget indicators "on paper", but it almost certainly worsens the real situation of the lowest-paid workers.

The economist also comments on the frequently used argument that such a measure protects business and competitiveness. "This sounds reasonable until we ask ourselves the question: who will buy the businesses' goods if incomes fall further and further behind prices?" he asks. According to him, stimulating the economy by limiting the incomes of the poorest is "like trying to increase a car's speed by draining some of its fuel".

Prof. Durankev recalls that in recent years, most European countries have moved in the opposite direction – indexing or increasing minimum wages precisely because inflation is eating away at incomes. He notes that the "European Directive on adequate minimum wages" places emphasis on purchasing power, living standards, productivity growth, and a decent life for workers. Against this background, "freezing specifically minimum incomes during high inflation can hardly be presented as a triumph of these principles".

In his post, the economist also asks a sharp political question: "Are the people in the new Bulgarian government useful idiots for big capital?!" He himself answers that he does not think so, and expresses hope that "surely there will be brave and wise people in it who will vote against" such a decision.

In conclusion, Prof. Boyan Durankev issues a grim warning about the social tension that such a policy would lead to. "If a 'freeze' on specifically minimum incomes happens, the autumn will have a huge harvest of cobblestones...", he writes, hinting at likely mass protests and street unrest if the real incomes of the poorest continue to melt away.