Romanian PM Says A Higher Minimum Wage Is A Bad Idea

The head of the Romanian Executive said the Government Decision enacted late last year clearly states that the minimum wage can be increased to RON540 starting with July 1 based on certain conditions, namely the evolution of economic growth, of labor output and inflation.

"It is not an increase granted regardless of the conditions, it is based on these three parameters," Tariceanu said, adding that an uncontrolled salary hike triggers inflationist pressure and, finally, a decrease in purchase power.

Economy and finance minister Varujan Vosganian said the debate on the minimum wage on economy targets people with relatively high salaries, “even though it seems like a discussion involving people with low salaries.”

Romanian unionists concluded the first day of protests in front of the Ministry of Labor and the Ministry of Economy and Finance, announcing they would continue protest actions in the days to come, and if the Government does not approve the minimum wage increase from RON500 to RON540 starting with July 1, they will organize a large rally.

Unionists threaten to resort to ample protests at the government’s headquarters unless their demands are met.

Unionists are also picketing prefect’s offices across the country.

"Union confederations protest to get the government to apply the measures it has already committed to. We’re not asking for a raise, we’re asking that the law be observed,” Bogdan Hossu, head of the Cartel Alfa union confederation, told MEDIAFAX.

Hossu said a minim wage at RON540 is still far from covering the daily consumer basket, and Romania has over 1.3 million people on welfare.

"Keeping the minimum wage at a low level makes way for tax evation and black-market labor," the union leader said.

The leaders of union confederations CNSLR Fratia, Cartel Alfa and BNS Union said Tuesday they would protest until the government honors its commitment made last year in December to increase the minimum wage to RON540 as of Jul 1, 2008.

Marius Petcu, head of the CNSLR Fratia union confederation, said that in the light of recent food and fuel price hikes, unions will only accept an increase in minimum wage to RON600 once the protests start.

Labor minister Paul Pacuraru met last week with the minister of economy and finance Varujan Vosganian, and with the representatives of the National Forecast Commission,  unions and employers’ associations to see whether the increase in minimum wage to RON540 is possible as of Jul 1.

Pacuraru said the minimum wage rose 78% during 2004-2008 although the government had only committed to a 60% hike.

The government, unions and employers agreed in December last year to set the minimum wage at RON500 in the fist half of the year, and increase it to RON540 as of the second half, if macroeconomic indicators allow it.