Labour cost convergence in Romania decelerates during pandemic

The nominal hourly labor cost in Romania increased by 5-6% year-on-year in Q2 and Q3 this year, after an 8.1% annual advance in Q1 and double-digit growth rates (12-13%) in the second half of 2019.

The rise of the labor cost in the European Union also slowed down to 1.6% year-on-year in Q2 this year (versus 5.7% in Romania), from 2.3-2.4% yoy growth rates in the second half of 2019.

The labor cost in Romania, the second-lowest in the European Union, is catching up with the rest of the Union, posting robust growth rates over the past year - yet not narrowing too much the gap between local wages and those in the western member states.

Romania had the second-lowest median value of average gross hourly earnings in the European Union in 2018, according to data from Eurostat.

Thus, the median value of the Romanian employees' gross hourly earnings was EUR 3.7, higher only compared to Bulgaria - EUR 2.4.

This compares to EUR 27.2 in Denmark and EUR 17.2 in Germany.

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