Comment: Authorities must sell Romania to investors on more than low wages

Reading the recent comment Salaries in Romania. Is Mr.Ponta right? I thought that the Romanian employees’ financial motivation is a complex and unsolved problem that has gone on many, many years. It is also a tough topic taking into account the privatization policies used by the Romanian authorities. Our government authorities used to present potential foreign investors coming to take advantage of low wages as almost the only competitive advantage Romania had, which, in my opinion, was one of the key problems in the bad privatization agreements.

I believe that trying to persuade investors that they can win big profits only because of the low wages generated a very particular way of seeing the Romanian employee, which had many negative results, not only for employees, but for the Romanian state and the investors themselves. Foreign investors could think that Romanians accept the misery wages because they are unskilled, lazy, they don’t have any choice or they don’t have the entrepreneurial abilities and determination. Any of these interpretations can lead to new foreign owners and/or managers having an improper attitude towards Romanian employees. In my opinion, these attitudes don’t really come from investors or general views of the Romanian people, instead the real roots are in the attitudes and the so called vision and professionalism of our authorities as the “negotiators” for the privatization. The Romanian isn’t the least skilled or the laziest employee in the world, but I think that many times the mentality from the Communist period makes us accept badly paid jobs because we have the fear of and/or lack of confidence in our abilities to set up our own business. If we add the huge bureaucracy, the extreme volatility of the rules and regulations, the bad investment loans policies and, above all the corruption, we have many more explanations for this acceptance of the low wages. The issue is more social collective psychology and history than the employee's professional qualities. The Romanian employee, as any employee in the world mustn’t be disregarded, because he or she doesn’t have a viable alternative to live or isn’t prepared from a psychological perspective to start a business. Actually, we, the Romanians must understand that investors/businesspeople, no matter the nationality, aren’t charitable types, they are here to make profits and as any beginner student in Economics knows the main ways to make profits are: to reduce costs (especially costs that have a large weight), to increase the returns or more theoretically to increase the returns faster than the increase in costs. During a crisis, when consumers tend to spend less, reducing need for production and services and consequently, the returns, profits tend to be achieved by decreasing costs. How can costs be reduced? The reality of the last few years demonstrated lower human resources costs through outsourcing unprofitable or administrative activities, massive layoffs and maintaining a low level of wages. In that everlasting chase for profit, the investors search markets where the level of those types of costs is low and, to buy a company in Romania can be attractive from this perspective. So, our authorities, characterized by their lack of imagination, often with a poor understanding of the negotiation process or simply because of corruption, were not firm on wage levels when considering privatization proposals. Looking more attentively at what happened after the privatization of many Romanian companies I tried to identify a few consequences: