fbpx Modifica setari cookieuri

SIMILAR ARTICLES

Budget implementation on S1 2020 – a comparative approach related to 2019

The general consolidated budget registered in the first half of the current year a deficit of about RON 45 billion, equivalent to 4.2% of the… Mai mult

Siegfried Muresan: The EU is considering the possibility to introduce several types of taxes. The only one on which there is agreement is the one on plastic

At the European level, there is an agreement to introduce a “modest” tax on disposable plastic, a first source of income to support the repayment… Mai mult

Long-term interest rate fell below 4%. However, a courageous change of economic vision would be required

Long-term interest rate for Romania fell by almost one percentage point in just two months, according to data released by Eurostat. After increasing up to… Mai mult

Mazars study: Romanian tax system versus Covid-19 crisis. Development bases have been created

Budgetary and institutions’ operational constraints generated by the pandemic have subjected the Romanian tax system to significant tensions, which proved its limits, notes the international… Mai mult

The sex of angels and the sex of Europe. On the para-ideological enemy at the heart of the EU

Some facts – or what we call “Hypothesis” in Mathematics  *  What EU is in the global economic and technological competition *  The sex of… Mai mult

Labor productivity figures and their actual consequences: European champions in percentage growth, mediocre in absolute growth

de Dordia Tereza 20.10.2016

productivitateAccording to Eurostat, Romania is the EU champion in labor productivity’s growth percentage over the past decade, with a plus of 42%.

We managed to outrun Lithuania (+ 36%), Slovakia (+ 34%), Poland (+ 31%) and Bulgaria (+ 30%), in terms of euro per hour of work.

From 5.7 euros in 2005, we climbed to 8.1 euros per hour in 2015 (see table).

Having the good news announced, let us hear the less good news. Given the very low start level, we did not manage even in these conditions to reach the labor productivity registered ten years ago in Poland or the Baltic countries. This situation explains so eloquently the development gap that we have to recover not only to the Western countries, but to the colleagues from the former Eastern Bloc.

European statistics indicate that we are somewhere at the half compared to the Czech Republic and 40% below Poland in terms of efficiency of the economic activities. Moreover, we are two and a half times worse than Greece, the only EU country that has failed to improve this essential parameter for the economy and sees the full consequences.

tabel1-11

*

  • Evolution of labor productivity (2005-2015)
  • Thousands of euro/employee             Euro/hour of work       Growth in ten years (%)
  • * Data related to Ireland have a break in the statistical series in 2011 therefore we have removed them from the analysis

*

Yet the divergence is increasing …

Paradoxically, the very high increase percentage did not bring us closer to most of the EU countries (marked in red) in the same period of time.

The explanation is that the favorable difference, accumulated during a decade in absolute terms, was located exactly at the middle of the European ranking, far below the results of countries such as Slovakia, Lithuania, the Czech Republic but also Spain, Germany and Sweden.

To top it all in terms of statistics, although we were the first in the pace of labor productivity growth, in absolute terms this indicator increased below both the European average and the Eurozone average (+2.4 euros / hour compared to the EU28 average of +2.9 euro and the EA19 average of +3.4 euro). Although it may seem bizarre, we were the fastest without getting close to the group in front of us.

The fact is that although our pace of growth in labor productivity was about five times higher than in Germany or France, the absolute value of this indicator rose less than in the Western developed states (consequently, the work efficiency gap increased compared to 12 EU countries) and we currently are five times weaker.

In this context, policy makers might need to stop stimulating companies that have a level of productivity below the national average and focus the support on the businesses with a productivity level equal to or exceeding the European average. Otherwise, we will not get closer to the Western economies and will continue to have a great mass of socially assisted employees because they have insufficient income.

Unfortunately, the very clear statistical data do not keep us from dreaming of wages that cannot result from the financial results of the productive sector. Besides, the budgetary salaries and the pensions based on these salaries that cannot be paid in LEI at the expected levels, because they will not be sustainable in EURO. Of course, there would be the extensive version of increasing the number of employees in the economy but, as seen in its evolution, it will remain to have a modest effect.

Given the anemic productivity growth close to zero (7.1% in 2013, 4.7% in 2014, 0% in 2015 and -1.8%, the average in the first seven months of 2016), the alternative of increasing the nominal income over the productivity growth (which should become a central piece of the official communications and public debate, as a decisive argument in granting any social benefits or increase of the budgetary salaries) looks unsustainable.

Mergeți în homepage ›

Publicat la data de 20.10.2016

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