Romanian minimum wage under fire

As one of its first measures, Romania's new left-liberal governing coalition will raise the country's minimum wage to roughly 315 euros on February 1. The Romanian press is anything but convinced by the government's gift to employees.

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Revista 22 (RO) /

Wages and productivity inseparable

The minimum wage scheme won't work out in the end, Revista 22 fears:

“The biggest risk is that the economy collapses, also because the logic of numbers ignores real trends here: you can't boost prosperity if productivity isn't increasing. If we compare our country with other countries that have higher minimum or average wages we must also factor in the per capita GDP, which is a measure of a nation's prosperity. … We will end up with an average annual wage of 8,400 euros while the annual per capita GDP is 8,534 euros! This interesting game with numbers reveals the limits on how an economy can force wages upwards while at the same time ignoring productivity.”

Ziare (RO) /

A risky "gift"

The new minimum wage could well be a non-starter, Ziare agrees:

“We shouldn't believe that entrepreneurs will finance the costs for this wage hike with their profits. That goes not only for the multinationals which 'suck the people's life-blood', but also for all the little companies whose operators basically have two options: either they lay off employees or they raise their prices to cover the cost of the payrise. ... So it's not at all unlikely that the government's gift will only increase unemployment, especially in economically weak areas, and corrode buying power through the cumulative effect of price increases.”