PERSONAL INCOME AND EXPENDITURES
Cost of Living
Incomes and retail prices are controlled by the government and set in accordance with the overall economic plan. The cost of living, therefore, is also controlled and has been relatively stable. Several increases in the minimum wage during the 1960s were paralleled by price increases for some of the essential commodities and services. In 1973 the minimum monthly wage was raised to 80 leva per month (for value of the lev—see Glossary), and basic wages for the lowest categories of workers and employees were also raised to bring them into line with wages in comparable kinds of work. At the same time, prices of certain foods were reduced, whereas prices of some other essential goods were raised.
Although the incomes of most Bulgarians have generally kept pace with the rise in the cost of living, a chronic scarcity of consumer goods and services and periodic food shortages have forced a comparatively low standard of living on the population. As in other communist countries, the consumer industry has been neglected in favor of other branches of the economy. Even after the government began to place greater emphasis on the production of consumer goods in the 1960s, rising demand outstripped production capabilities. Even the basic needs of the population often could not be met because of poor planning or the inflexibility of the central planning system, which does not react effectively to changing market conditions. It is not uncommon to have excessive inventories of certain sizes of clothing or footwear while other sizes are in short supply. Retail outlets are either unwilling or unable to replenish their supplies of missing sizes until the overall stock of the item is almost depleted, regardless of consumer demand.
The government has for some time indicated concern over the low standard of living in Bulgaria as compared with other Eastern European countries. One of the aims of the Sixth Five-Year Plan is to increase production of consumer goods and meet the needs and rising demands of the population. Limited production capacity, however, and shortages of certain raw materials will seriously restrict the extent of possible improvements.
In December 1972 the Central Committee of the Bulgarian Communist Party held a special plenum on improving the standard of living of the people. This unprecedented move showed the importance that the leadership was attaching to this subject. In an extensive report to the plenum, party chief Todor Zhivkov presented a far-reaching program of steps to be taken, starting in 1973, to improve the standard of living. To implement the decisions of the plenum over the long run, the Commission on the Living Standard was established under prominent Bulgarian Communist Party (BKP—see Glossary) leadership.
As envisaged by the plenum, the standard of living will be raised by pursuing a three-pronged policy: gradually increasing wages; keeping prices stable; and making available an adequate supply of consumer goods and services, including luxury goods and services to satisfy the demand of those who are willing to pay the higher price. In the past, luxury goods and services have been considered superfluous and undesirable in an egalitarian socialist country. Higher incomes and exposure to the living standards in other Eastern European and Western European countries, however, have created pressure for more than just the satisfaction of basic needs. According to some government officials, Bulgarians are no longer satisfied with just any washing machine or electric appliance; they want the latest automatic model and are willing to pay for it.
In the program for increasing wages, special attention will be paid to narrowing the gap between incomes of cooperative peasants and those of workers. In the mid-1950s a cooperative peasant's income was only 60 percent of a worker's income. By 1971 the peasant's income had increased to 85 percent of that of a worker, but this amount was still considered too low by the government. To accelerate the growth of peasants' incomes, a nontaxable minimum income was to be introduced in 1973, and the same system of income tax was to cover both peasants and workers. The system of remuneration on cooperative farms was to be made the same as that on state farms, where agricultural workers are classed as workers, not as farmers. Fringe benefits, such as pensions and supplements for children, were also to be brought into line with those of workers by 1975.
Consumption
According to official figures, consumption has grown steadily since the early 1960s, in spite of continued shortages of some goods. As incomes rose and consumer goods and services became more readily available, a greater percentage of household budgets was being spent on them. All segments of the population spent a greater share of their income in 1971 on household equipment and on cultural and educational pursuits, which included such durable goods as household appliances and radios and television sets, than they did in 1962. Changes in proportionate expenditures for other nonessentials during the 1960s reflected the income differences and taste preferences of the different social categories as well as their rural or urban residence.