Real wages keep rising in Romania: Up 4.8% YoY in Jan-May

Romania’s labour market enters a new stage of development as it emerges from the Covid crisis, with companies likely to support higher wages by investing in the development of the existing low-skilled workforce: over one-third of the employees in the private sector paid with the minimum statutory wage.

Despite the state forecasting body CNSP predicting only a 2% real advance in the net wages this year, Romania’s average net wages increased by a real 4.8% YoY on average in January-May, and the real annual growth rate (deflated by CPI) accelerated to 5.9% in May.

Besides the narrative of the frozen wages in the public sector and the private sector’s limited resources for paying higher wages, a new factor is surfacing during the post-crisis period: the labour market returned to the tight state seen before the lockdown, just like the Romanian workers returned to their jobs in Italy, Spain, and Germany. In the UK alone, nearly one million Romanians got post-Brexit residence permits.

As for the companies’ limited resources, the wages in Romania are among the lowest in the European Union: RON 3,492 (under EUR 700) in net terms, in May, despite the 9.8% annual increase.

Some 1.6 mln Romanian employees receive at the end of the month the minimum statutory wage (under EUR 300), and this is a potential for higher salaries, explains Adecco country manager Sorin Glodeanu in an interview with Ziarul Financiar daily.

It is only a matter of training, and the companies are already working on it. Most of the people paid the minimum wage are in the small cities and in the sectors of trade, HoReCa, and manufacturing he says.

(Photo: Shutterstock)