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Salaries in Romania by fields of activity, compared to EU practice. Plus, a question summarizing the situation

de Marin Pana 27.1.2017

Only in three sectors from Romania, the wages reached the level allowed by the GDP in euro related to the market prices, according to a study by Eurostat for all member states based on the data become final in 2014 and published this week. The three areas are the mining, banking sector and the information and communications.

At the time of collecting the statistical data, Romania’s GDP per capita was 7,600 euros compared to an average of 27,600 euros per capita in the EU, which represents a ratio of 27.5% that also applies to the wages. Beyond the wage gap to the developed countries from the West or the former socialist bloc, we can notice in our case a quite obvious differentiation of these gaps between economic fields.

Quite incorrectly if considering the contribution of this industry to the gross added value and the overall economic outcome, the salaries in the manufacturing sector, which sets the tone in the economy and can best observe the correlation with the labour productivity, equal to little more than two-thirds of what they should be, which indicates a potential growth of 50% of these salaries without exceeding the EU average.

In the public sector (public administration, healthcare and education), the situation was a little better, although the level of about three-quarters of the potential would have allowed the increase by about a third of the level from 2014, to reach the European average. That justifies to some extent the increases already established then, but also asks for restraints in the next period of time.

According to Eurostat, the situation is as follows:

*

  • Wages in Romania compared to the EU average, by economic fields (gross data, euro, 2014)
  • Romania         EU average     Romania/EU average (%)
  • Mining
  • Finance and insurance
  • IT&C
  • Electricity, natural gas, steam supply
  • Scientific and technical activities
  • Transportation, storage
  • Water supply, waste management
  • Wholesale and retail trade
  • Education
  • Healthcare and social work
  • Administrative and support service activities
  • Hotels and restaurants
  • Manufacturing industry
  • Real estate
  • Constructions
  • Arts, entertainment, leisure
  • Other services

*

Some observations

In the mining industry, wages in Romania are less than half the average European level, but above the level in Slovakia, Hungary, Latvia, Lithuania and Bulgaria. As a curiosity, if men in the EU earn more than women in this sector (2,493 euro compared to 2,320 euro) in Romania women earn more than men (1,142 euro compared to 1,051 euro).

In manufacturing, wages in Romania are much lower than the European average, the level of 18% being the lowest in the EU, except for Bulgaria (14.5%). For reference, we consider the amounts immediately above us from some former socialist countries: Lithuania (715 euros, 28%), Latvia (761 euros, 30%), Hungary (803 euros, 31.5%), the Czech Republic (906 euros, 35.5 %), Poland (914 euros, 36%, or double compared to Romania).

In the electricity, gas, steam supply sector, we also rank the second to last, a little over ten percent above Bulgaria (757 euros) but not far below Lithuania (887 euros) or Latvia (938 euros). The situation is similar to the water supply and waste management sector, except that Hungary slips into the European statistics between the two Baltic states mentioned above.

The construction sector is listed with some of the lowest wages in relative percentage (only 17% of the EU average) but it is very likely that the official statistics are at this point strongly vitiated by the informal payments. Only the arts, entertainment, leisure (16.0%) and other services (15.1%) areas fall below this level in relation to the EU situation.

Natural order

Altogether, the low share of labour in the economic outcome, relative to the European practice, is obvious in these statistics. That is precisely why improving the situation would have been more logical, in the natural order of things, to start from the sources related to the directly and immediately measurable productive activities, not the needs (otherwise normal) of some far-reaching social benefits.

The key to this problem lies in a question that is simple, but difficult to answer. How was it possible, given the similar economic structure and a GDP per capita by about 40% higher in euro (10,700 euro compared to 7,600 euro, all in the official Eurostat data), for Poland to have 100% higher salaries than us in the manufacturing sector?

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Publicat la data de 27.1.2017

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