German investors in Romania warn that new minimum wage hike will force them to change plans

The Romanian Government’s intention to increase again the minimum wage, without any impact study, will determine German companies in Romania to rethink their business model. This can also mean that some German companies, especially those in the manufacturing industry, may reduce some of their activities or completely give up some of their operations, according to the German-Romanian Chamber of Commerce – AHK. The minimum wage has doubled in Romania in the last four years, but productivity hasn’t increased at the same pace. Thus, German investors ask the Government to invest heavily in education and infrastructure so that productivity also increases. They also ask for a stable legislative framework and predictability. AHK also criticized the Government’s intention to set a higher minimum wage for employees with upper education or for those with higher seniority. “Tying the minimum wage to a diploma makes no sense, in our opinion,” AHK representatives said, arguing that what a person studied is not that important as what that person actually does at the job. Labor minister Lia Olguta Vasilescu announced that the minimum wage will increase on December 1, and, starting January 1, 2019, employees with upper education or over 15 years of experience, will get a higher minimum wage than the rest. editor@romania-insider.com