Rise in proportion of workers on minimum wage or less

A National Institute of Statistics survey, conducted in October 2006, finds that the proportion of Romanian employees who work at least 22 days a month and receive gross pay at or below the national minimum wage increased from 5.4% in 1999 to 8.4% in 2006. The proportion of employees in this category differs by sector of economic activity – being particularly high in the hotels and restaurants, and retail trade sectors – by gender and by type of organisation.

About the survey

Each year in October, the National Institute of Statistics (Institutul Naţional de Statistică, INS) conducts a survey, based on samples from various industries, to determine the distribution of employees by wage groups. The data reveal the wage-group distribution of workers according to various criteria, including economic sector, gender, social class and broad occupational categories.

The representative sample for the October 2006 survey (available from INS in a printedition only, in the Romanian language) included 17,881 companies employing four or more workers and whose employees worked at least 22 days that month.

Overall wage trends

In October 2006, the number of employees who worked at least 22 days was 1.7% lower than in October 1999. Of the total number of employees covered by the survey, only 87.8% worked at least 22 days in October 2006.

From October 1999 to October 2006, the number of employees who worked at least 22 days a month and whose earnings were equal to or below the national minimum wage (RO0709019I) rose by 53%. Their proportion of the total number of employees surveyed increased from 5.4% to 8.4%.

Over the same seven-year period, the national minimum wage rose by 120%, the average wage increased by 40% and the highest recorded wages rose by 70%.

In October 2006, 69.5% of women and 63.4% of men earned less than RON 1,000 (€268 as at 3 March 2008) a month. On average, women’s earnings stood at 90.1% of that of their male counterparts.

In companies with fewer than 50 employees, the average wage represented only 64% of the national average. In companies with more than 250 employees, the average wage was 20% higher than the national average.

Sectoral distribution

The share of the total number of employees who earn the national minimum wage or less varies considerably from one economic sector to another.

In October 2006, the highest proportions of employees earning the minimum wage or less were found in the following sectors: hotels and restaurants, at 23.4% (compared with 21.4% in 1999), retail trade, at 21.3% (18.6% in 1999); industry, at 12.4% (19.9% in 1999); real estate, at 12% (12% in 1999); and public administration, at 10.2% (0.1% in 1999).

The lowest proportions of employees earning the minimum wage or less were recorded in sectors such as: the energy sector, at 0.4% in 2006 (0.0% in 1999); education, at 0.6% (0.2% in 1999); and the health sector, at 0.8% (0.1% in 1999).

Trends by gender and occupational status

In October 2006, 8.4% of all male workers earned the minimum wage or less, compared with 4.5% in 1999; the proportion for female workers also stood at 8.4%, compared with 6.5% in 1999.

Among manual workers, 10.5% earned the minimum wage or less in October 2006 while 7.3% of manual workers did so in 1999. Among other categories of workers, the proportion stood at only 5.9% but was up from 2.3% in 1999.

Trends by type of organisation

The proportion of employees earning the national minimum wage or less was much greater in private sector companies – corresponding to 10.2% in 2006 compared with 7.1% in 1999 – than in utilities and public services corporations – accounting for 0.1% of workers in 2006 compared with 0.03% in 1999.

In terms of company size, in enterprises with 50 or fewer employees, almost one out of four workers (24.1%) earned less than the national minimum wage in 2006; in companies with a staff of 50 to 249 employees, this group accounted for 8.2%, compared with only 1.6% in companies employing 250 persons or more.

As regards the type of ownership, the proportion of employees earning the national minimum wage or less was highest in cooperative associations (19.1% in 2006, slightly up from 18% in 1999), in community-paid services (18.2% compared with 2.8% in 1999) and in Romanian privately-owned enterprises (13.1%, up from 12.1% in 1999). At the opposite end of the scale stand fully state-owned companies (0.25% in 2006, up from 0.15%) and companies in which the state is a majority shareholder (0.46%, up from 0.22%).

Luminiţa Chivu, Institute of National Economy, Romanian Academy