Alexander Todorov Network

Systemic problems with the income level in Bulgaria

Abraham Maslow divides human needs at 5 levels. Until each primary need isn’t satisfied people can’t pay attention to the more sublime needs. The levels of needs in Maslow’s theory are:

1. Physiological needs – food, water, sleep, health
2. Security – shelter, safety, etc.
3. Affiliation – family, community, love
4. Confidence – respect, honor
5. Self-improvement

This theory has been criticized because some believe that man can’t be regarded in such primitive way, because people are more exalted things. Perhaps the critics have already satisfied the first 4 most primary needs. Then in their eyes indeed the theory looks wrong (when you are on top it’s hard to see what’s happen at the bottom).

In 2011 the average salary after tax in Bulgaria is € 250 per month. To cover the poverty line you need round € 125 (this limit is determined by the Government and may be considered intentionally understated).

Assuming that the poverty line is equal to the first level of needs according to Maslow’s theory, the second level is the presence of home where the individual can take shelter. To acquire own home, the average citizen has about € 125 a month. The alternatives are to live rent, or obtain mortgage. According to the National Institute of Statistics in Bulgaria, the average home worth about € 27000 (assuming that the average house is 60 square meters). If banks had lend credits at 0% interest with no any fees, then the average citizen in Bulgaria might have the average home for about 18 years, if lives all the time with the minimum resources required for the existence. But the banks in Bulgaria are not charity organizations. Their promotional rate starts from 6-7% for the first year. Then users with mortgages may expect constantly to be surprised by an increase in the required monthly payment and additional fees for bonus. If the average citizen in Bulgaria has only € 125 per month, which can be used to repay the loan for his house, even with the promotional rate of 6% a year, it’s mathematically impossible ever to pay its mortgage. Therefore, if you are the average citizen in Bulgaria, you can never buy your own home.

If we add a spouse to the average citizen (it’s a luxury thing in Bulgaria), who also works and gets the average income in the country, this family will have more funds to purchase own home. Of course that would be possible after many years, serving serious deprivation, and if all the time none of the couple doesn’t get sick or lose their jobs, while maintaining that such a low living standard is hardly possible. Furthermore it’s normal to assume that young family will have children. It’s a hard decision if you live in a family representing the middle class in Bulgaria – you can have 1 child only if you give up the idea ever to have your own home. Well, children are luxury too. If you decide to have a child, that means you’ll have to live all the time just covering the poverty line and with no own home. If you or your spouse becomes ill, your family will have to live with inadequate resource for physical survival.

But even assuming that the parents in the family are lucky and never lose their job, never get sick, if the average couple in Bulgaria has only one child, it will mean that the population will be melted in half with each succeeding generation. This may sound like “everyone will have more space”, but in fact a similar trend threatens national security. All social systems are under pressure. If you are a member of the average Bulgarian family you won’t have enough resources for take care of yourself, but someone has to help the elderly. Social security systems at national level can’t cope with caring for the elderly. Adults however have their home, and this is indeed the only thing they have. The average young citizen would never be able to secure home ownership, which means to hit the street, or live with his parents, perhaps with his grandparents too. Representatives of several generations live together in one place.

Whoever wants to find homeless people in Bulgaria, shouldn’t look for them in the street, but find representatives of the middle class. They don’t have their own home and it’s almost impossible ever to have, their shelter is the home of the parents.

This is the way how the middle class in Bulgaria met the first most primitive levels of needs. With the income they receive can be hardly satisfied only physiological needs. Shelter can be provided in return for care for the elderly parents. The conditions in which several generations are forced to live in one place, should lead to solidarity inherent to the most united families. In the name of the great goal – surviving.

Living in this manner, middle class in Bulgaria is not able to enjoy the life, doesn’t have any self-confidence and is devoid of future prospects.

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11th European Meeting of people experiencing poverty – Brussels – May 2012