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The increase in the unemployment allowance is justified and necessary because it would contribute to a real integration of the unemployed in the labour market, Romania being the only state in the European Union with an average unemployment allowance of less than 50 pct of the minimum wage, say the representatives of the National Trade Union Bloc (BNS).
"We agree that the unemployed indemnified or unpaid need vocational training in order to be integrated into the labour market, but participation in training and active job-searching entails additional costs, as a result of the increase in unemployment benefit is all the more justified and necessary. Active employment measures need to be rethought, both in terms of allocated resources, human and financial, and in terms of their efficiency. They must be a permanent concern and must be aimed not only at the unemployed, but equally at those who are in precarious employment, who are at permanent risk of losing their jobs. We remember that the labour force needs vocational training when in unemployment, but we constantly forget that employers do not comply with their legal provisions to train the staff employed," the representatives of the BNS say in an open letter addressed to the Minister of Labour and Social Protection.
According to the source, the increase in the unemployment allowance would certainly contribute to a real integration of the unemployed into the labour market.
"Romania ratified the ILO Convention 168/1988, by adopting Law 112/1992, with the obligation to grant an unemployment allowance representing at least 50 pct of the minimum wage for those who did not contribute to the unemployment fund and at least 50 pct of the last salary for those who paid contributions. At the moment Romania is violating the provisions of Law 112/1992 and Convention 168/1988 respectively. For graduates who have not contributed to the unemployment fund, the amount of the unemployment allowance should be in accordance with the Convention, at least 50 pct of the net minimum wage, i.e. 673 lei (1,346 - net minimum wage 50 pct) starting with 1 January 2020. This allowance is currently 250 lei. The ratio between the unemployment allowance and the net minimum wage is in this case 18.5 pct," the BNS representatives claim.
According to the cited source, for employees who have a contribution period according to the law and lose their job by entering unemployment, the amount of the allowance should be at least 50 pct of the previous earnings, which means: for an employee who has earned a salary equal to the minimum wage in the economy before entering unemployment - the amount should be 673 lei. In fact, at the moment, an unemployed with less than 3 years length in work receives 375 lei, for those with less than 3 years length in work the ratio between the unemployment allowance and the previous net salary is 27.8 pct.
For those between 3 and 5 years seniority in work - the allowance is currently 442 lei, the ratio being 32.8 pct. At the same time, for an employee who has earned a salary equal to the average salary in the economy before entering unemployment - the amount of unemployment allowance should be 1,591 lei (3,182 - average net salary 50 pct). At the moment, if the seniority in work is less than 3 years - they receive an allowance equal to 375 lei - for these (contributors less than 3 years of seniority in work) the ratio between the unemployment allowance and the last net salary is 11.7 pct.
At the same time, those over 20 years seniority in work - currently receive an allowance equal to 895 lei - in the case of this category the ratio is 28.1 pct.
According to the BNS, the increase in the minimum wage without the correlation albeit of the social reference indicator, which has maintained so far its value it used to have in 2008, has affected compliance with the above mentioned commitments. In 2008 the value of the gross minimum wage was in the first half of the year equal to the value of the social reference indicator.
"Romania is the only state in the European Union with an average unemployment allowance of less than 50 pct of the minimum wage. In response to the BNS's request, the Minister of Labour and Social Protection, Mrs Violeta Alexandru announced that she does not have as a priority the increase of the unemployment allowance, for her priority being their training and reintegration into the labour market, such a priority being the result of discussions with employers' representatives who complain that they do not find work force," the document says.
At the same time, the BNS representatives claim that 74.9 pct of households where the head of the family is an unemployed failed in 2019 to pay some expenses on time, 82.5 pct failed to pay their expenses for the maintenance of the dwelling (water, electricity and heat) on time.
"Except for the unemployed persons who have had a salary in the last 12 months higher than the average gross salary in the economy and a seniority in work of more than 10 years, all other unemployed persons receive unemployment allowances lower than the minimum poverty threshold for a single person. A person with less than 3 years' seniority in work, regardless of the salary they had before losing their job, will receive an unemployment allowance of 375 lei. During this period they must look for a job, only for the transportation required to participate in interviews or vocational training activities would pay almost a third of the income received. What could be the priority of an unemployed person who is actively looking for a job with an income of 375 lei per month?! How could they switch between masks, disinfectant, transport, medicine or food?! (...) Employers received grants for Furlough in order not to fire staff in the pandemic, they also received forms of support throughout this year in order not to fire staff, however in July 2020 the number of uncompensated unemployed has doubled compared to the same month of the previous year," the BNS representatives concluded.
