Country Listing

Bulgaria Table of Contents


Labor and Economic Reform

Under communist rule, unemployment officially was nonexistent. Like many other Soviet-style economies, however, the Bulgarian system included much underemployment and hoarding of surplus workers, particularly in industry. While in power, the BCP set wage and work norms. Average annual earnings rose from 2,185 leva (for value of the lev, see Glossary) in 1980 to 2,953 leva in 1988. Earnings were highest in the research, state administration, construction, transport, and finance sectors, in that order. Agriculture and forestry were among the lowest paid sectors.

After the overthrow of Zhivkov, reasonable use of industrial capacity was expected to maintain a tight labor market for the foreseeable future because the labor force had ceased to grow. Women already accounted for approximately 50 percent of the labor force in 1988; therefore, little additional growth was expected from that part of the population. Similarly, little growth was expected from among voluntarily employed pensioners and invalids. However, the tight labor supply was not the most pressing concern of the first post-Zhivkov economic planners. The economic transformation from centralized planning to a market economy meant increased influence by market factors on wage and unemployment rates in the future. This transformation also made high unemployment likely as state enterprises closed and generation of goods and services shifted to an expanded private sector. But this intermediate dislocation was thought necessary to achieve correlation between wages and productivity.

Unemployment, which stood at 72,000 at the beginning of 1991, was expected to jump to at least 250,000 by the end of that year because of the planned transition to a market structure. In 1990 the interim government of Petur Mladenov created a national labor exchange to assist in placing unemployed workers. Unemployment assistance remained a state responsibility, but the state had very little money for this purpose in 1991. Plans called for eventual contribution by private employers to a designated unemployment fund.

Data as of June 1992