The National Tripartite Council for Social Dialogue on Wednesday convened at the Government House to discuss the size of the minimum wage in Romania in the presence of Prime Minister Ilie Bolojan.
According to the government, Bolojan mentioned "the reasons why, next year, public sector pay will be capped at this year's value".
Bolojan also said that he understands that people on low wages are the most affected by the increase in the cost of living, but, equally, a possible increase next year in the gross minimum wage will generate cascading increases in many wages, because over 40 pieces of legislation and budgetary mechanisms are linked to the gross minimum wage, which, in turn, will lead to a cascading increase in collateral budgetary expenditures: contributions, allowances, scales, bonuses, caps and allowances.
Although the government has decided to cap public sector pay for next year, an increase in the minimum wage "will automatically lead to an increase in several public sector pay, an increase that Romania cannot afford next year."
"This year, labour productivity increased by 5%, but wages have already increased by over 9%. Any wage increase that is not based on an increase in labour productivity leads to additional inflation, which especially affects those on low incomes. There are wage differences between regions and counties, and a uniform increase in the minimum wage would penalise precisely the poorer areas, where many current jobs would disappear, in rural areas and in small towns," according to the government.
Given the arguments of economic analyses, it is "very likely that the guaranteed gross minimum wage in the country next year will be capped at this year's level."
Consultations will continue next month, with the government expected to decided by the end of November.
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