Foreign investors think that minimum wage in Romania must be negotiated not imposed

The minimum wage level should not be decided administratively but be the result of negotiations between trade unions and employers on the basis of objective criteria agreed in advance and with a foreseeable timetable, according to the Foreign Investors Council (FIC), one of the biggest organizations representing the interests of foreign investors in Romania. “Policy makers must be aware that the minimum wage has as a secondary effect the gradual increase of all wages in an economy and this dynamic must be carefully monitored so that it will not only end in inflation,” FIC said in a press release. Foreign investors are worried about the lack of coordination in terms of legislative and public policy interventions on the labor market, which “seem to be the result of partial conclusions drawn by several stakeholders who do not interact with each other.” “Such an approach, in a labor market that is already tense due to the increasing deficit, may have effects that are contrary to what is expected,” FIC warns. The government recently announced that the minimum gross wage will increase starting December 1, to RON 2,080. Moreover, the government will also introduce a higher minimum wage for employees with upper education and those with over 15 years of seniority, namely RON 2,350, starting January 1, 2019. The minimum gross wage is currently RON 1,900 for all categories of employees. IMF mission says Romania should reassess increases in public wages and pensions French investors in RO say minimum wage increase can affect the whole economy editor@romania-insider.com