fbpx

SIMILAR ARTICLES

GDP 2020 estimate – reduced for the third time in the official forecast. Remarks

The GDP 2020 estimate has been reduced for the third time in a row in the so-called Preliminary Autumn Forecast for the budget amendment published… Mai mult

Romania-US agreement for nuclear cooperation – endorsed by the European Commission

The intergovernmental agreement between the United States and Romania in the nuclear-civil cooperation field has received the European Commission’s approval, and Romania will start construction… Mai mult

Open registration: ONLINE CONFERENCE Deposit-return system in Romania, from concept to implementation, November 24

A system which can save Romania from the packages waste and, at the same time, can ensure fulfillment of obligations in the field towards the… Mai mult

Romanian Leu, koruna, zloty and forint in pandemic: a comparison in terms of stability and its effects

Romanian Leu was much more stable during the pandemic than the currencies of Central European countries with a similar exchange rate regime, the Czech Republic,… Mai mult

Black Sea natural gas: Exploitation in Neptune Deep perimeter could start by 2025 – estimation by Ministry of Economy

Offshore perimeters in the Black Sea The Ministry of Economy would be satisfied if the exploitation of natural gas in Neptun Deep perimeter in the… Mai mult

Beware of who bears the burden: Atypical arrangement of wage cost increase in Romania in 2017

de Marin Pana , 16.4.2018

Romania ranked first in the EU in 2017 by the labour cost increase, according to data published by Eurostat. With an increase of +15% in euro (+ 17.1% in the national currency) our country has far outpaced Bulgaria (+12%), the Czech Republic (+11.3%), Hungary (+10%) and Baltic countries (Lithuania + 9.0%, Estonia +7.4% and Latvia +7.0%)

It is noteworthy that data have been processed at the country level for the entire economy, less the agricultural sector and public administration, in the enterprises with at least ten employees.

Unlike us, the Czech Republic and Hungary recorded slightly lower increases in the national currency than in euro (8.4% and 9.2%, respectively), as their currencies appreciated against the single currency.

Salary cost in Romania has increased 3.3 times compared to 2004 and has advanced by 50% compared to 2008. However, we remain on the second to last position in the EU by this indicator, by approximately 30% above Bulgaria and 30% below Hungary, our geographic neighbours. The evolution (attention, without the public administration) is comparable to the group of BELL countries mentioned in the table below us.

*

  • Evolution of salary cost per working hour in some EU countries
  • (euro, without agriculture and public administration)
  • Year

*

The problem is that we are not part of the small countries that have adopted or have their currency indexed to euro, but we should be closer to the mid-sized economies with floating exchange rate regimes, such as Hungary, Poland and the Czech Republic. These countries are a few years ahead of us in terms of the economic development.

Cost distribution by economic sectors: Attention to who bears the burden!

Moreover, we are differentiating ourselves from these countries, as well as from the Western practice, not only by the sharper increase in salary costs but also by the distribution of the salary costs by sectors of activity.

In our country, the industry registers a level of 95% of the national average, while the values match, at least, in the Czech Republic (100%), Poland and Hungary (101% each).

In Germany (116% ratio between industry and national average), Spain (112%), Ireland (110%), the Netherlands (109%) or France (106%), this positioning essential for the labour market is even clearer. Of course, we also have countries that are pretty much like us (Bulgaria, 96%), Croatia (92%) or even significantly below, like Portugal (87%), but they cannot be examples to follow.

At the same time, we have salary costs higher than the average on the services segment, which is not a European practice, and the non-business area is 18% above the national average, compared to only 2% at the EU average and minus 1% in the Eurozone.

Which tells us that we are atypical in terms of salary cost distribution

*

  • Salary costs per hour in EU countries by economic activities (euro, 2017)
  • Year    Business          Industry           Construction    Service            Non-business
  • EU average
  • Eurozone average

*

If we highlight the desirable situations in green for the manufacturing industry, in purple for the non-business sector, in relation to the European practice that is successful for the development of these economies, and if we highlight in red the situations that appear to be abnormal in this context, we can easily see what we should be aware of and where we should intervene on to salary costs.

For example, we can see in the case of BELL group, which does not pay more attention to the payment in the manufacturing industry, but at least it does not exaggerate in the non-business area (which, attention, does not include the public administration in the Eurostat report).

An area where the countries that tend to pay better are Poland, the economy that is closest to us in terms of structure and level of development, as well as Latin countries Italy and Spain.

Mergeți în homepage ›

Publicat la data de 16.4.2018

Lăsați un comentariu


NEWS

New Renault boss: “Dacia is a miracle. It's time for the brand to flourish"

Luca de Meo (foto), the new general manager (CEO) of Renault group, considers that Dacia project proved to be a miracle and that no one… Mai mult

Pentagon transforms Campia Turzii unit into a NATO air hub at the Black Sea

A former Soviet airbase in central Romania could become a hub for US Air Force operations in south-eastern Europe, where the Pentagon is seeking to… Mai mult

Nuclearelectrica shareholders approved to terminate negotiations with Chinese for building reactors 3 and 4 from Cernavoda

Nuclearelectrica's Board of Directors has been mandated to initiate proceedings to terminate negotiations with China General Nuclear Power Group (CGN), as well as legal effects… Mai mult

Renault holds expansion of its plant in Romania, 15,000 jobs cancelled at global level

"Putting capacity growth projects planned in Morocco and Romania on hold" - is one of the measures included in the draft plan of Renault Group… Mai mult

Romania is a net importer of electricity in 2020 as well

Romania imported an amount of electricity of almost 796 GWh in the first month of this year, by more than 36% above what it exported… Mai mult

Shareholders of Galati steel plant promise investments of one billion euros

GFG Alliance has committed to invest one billion euros to upgrade Galati steel plant in order to reduce emissions and increase production. Another EUR 1… Mai mult

Transport Ministry announces it has sent to Brussels the financing request for Sibiu - Pitesti highway

The Transport Ministry, as the Intermediate Body in Transport, approved the financing request for the project "Construction of Sibiu - Pitesti highway", Sections 1, 4… Mai mult

Romania and Juncker Plan: EUR 720 million attracted, of which 35% by Transgaz for BRUA

(The map of investment financed through Juncker Plan, by GDP share. Darker colours mean higher shares) The operator of national natural gas pipelines, Transgaz (TGN)… Mai mult

Top 3 reasons why young people leave Romania

Lack of trust in authorities, corruption and low living standards are the main reasons why young people leave Romania. The data is part of a… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult