Working poor in Europe – Romania

  • Observatory: EurWORK
  • Topic:
  • Working poor,
  • Employment and labour markets,
  • Published on: 05 April 2010



About
Country:
Romania
Author:
Constantin Ciutacu
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Romanian national statistics do not include studies on the extent and characteristics of the working poor. However, there are various institutional approaches to poverty, as well as policies, programmes and legal instruments to tackle the problem. It is estimated that more than two million people in the Romanian economy are working in and living on subsistence agriculture, and can therefore be termed as ‘working poor’. Minimum wage regulations play an important role in combating the risk of poverty in Romania. To this end, the social partners reached a tripartite agreement on the growth of the gross national minimum wage over the period 2008–2014.

Definitions and aims of study

The ‘working poor’ are a section of the population that is difficult to define, not only due to a lack of specific data but also because the concept combines two levels of analysis: the working status of individuals and the wages they earn from employment (individual level) and the extent to which they have a poverty-level of income within the household context (collective level).

The aim of the comparative analytical report is fourfold:

  • to obtain an insight into the extent of in-work poverty in different European countries and the characteristics of those affected;

  • to examine policies in place to tackle the problem of people in work on low levels of income and any assessments which have been carried out into the effectiveness of such policies;

  • to consider the views of social partners towards the working poor;

  • to consider the effect of the current economic recession on the scale of in-work poverty.

For the purpose of the study, the working poor are defined in the same way as the indicator used by the European Commission to assess and monitor in-work poverty. Therefore, the working poor are those who are employed and whose disposable income puts them are at risk of poverty. The expressions ‘working poor’ and ‘in-work poverty’ are thus used interchangeably.

‘Employed’ is defined here as being in work for over half of the year. ‘Risk of poverty’ refers to having an income below 60% of the national median. Income is measured in relation to the household in which a person lives and covers the income of all household members, which is shared equally among them after being adjusted for household size and composition. Accordingly, if persons are at risk of poverty, this may not be simply because they have low wages but because their wages are not sufficient to maintain the income of the household in which they live. Equally, a person can earn a very low wage but not be at risk of poverty because the income of other household members is sufficient to raise the overall household income above the poverty threshold. The study covers people on low wages, or low earnings in the case of self-employed persons. Low wages, defined in an analogous way as low income – that is, below 60% of the median earnings of those in full-time employment – potentially put individuals at risk of poverty. The risk is likely to increase in the current economic crisis as companies introduce various measures to try to cut wage costs while keeping people in employment by reducing their working hours, giving them extended leave or simply cutting wages.

The characteristics of the people concerned are also important – particularly their age, with young people and, in some cases, older workers being more likely to be employed in low-paid jobs. Women are also more likely than men to be employed in low-paid jobs, even allowing for the relatively large numbers of women working part time. However, the statistics show that, if they are in work, women are on average across the European Union less likely than men to live in households with a poverty-level of income. Nonetheless, women are more likely than men to live in circumstances which put them at particular risk of poverty, such as being a lone parent in many countries. In addition, migrants are particularly vulnerable to being among the working poor, since they tend to combine various adverse characteristics, such as working in low-skilled jobs with low rates of pay and living in single-earner households.

A set of tables containing the data available at EU level on the working poor and on those on low wages was included in an annex to the questionnaire (see Annex 1 of the overview comparative analytical report). The data concerned derive from the EU Statistics on Income and Living Conditions (EU-SILC) for 2007, which are the latest available data and which relate to the position in 2006. The national correspondents were asked to comment on the table findings for their country and to supplement the data included with data from national sources where possible and where these help to interpret the situation or add to the information included in the tables. The EU-SILC tables, for example, do not cover the position of migrant workers. The correspondents were also asked to specify the source of any additional data and the definitions used where these differ from those on which the table is based.

1. Scale and nature of in-work poverty

1.2 Please comment on the figures for the working poor for your country shown in the attached tables and what they indicate about the scale and nature of this. Please refer to any additional data available from national sources or any studies which have been undertaken if these provide additional information in this regard and help to give an insight into the issue.

The EU-SILC study shows that, in 2007, the at-risk-of-poverty rate for employed persons in Romania stood at 4% – or at 3% for employed women and 5% for employed men. This compares with the average for the 27 EU Member States (EU27) of 8% – or 7% for women and 8% for men.

The National Institute of Statistics (Institutul Naţional de Statistică, INS) publishes, in its online sustainable development indicators section, the specific indicators for poverty and social exclusion. These data include the poverty rate, calculated as the proportion of persons in households where the per capita income for adult members is lower than the poverty threshold of total population – defined in the EU-SILC as being 60% below the median earnings.

According to INS data, in 2007 the poverty rate in Romania was 18.5% – or 18.3% for men and over 18.8% for women. The poverty rate was about five percentage points higher in households comprising dependent children (20.5%) than the poverty rate in households with no dependent children (15.4%). INS statistics do not elaborate on the occupational status of these individuals.

Detailed information on aspects such as social status, occupation, background, geographical area of residence, level of training, age and gender can be found in the Romania: Poverty Assessment Report (in Romanian, 932Kb PDF), published in November 2007. The study is a joint report prepared by the Ministry of Labour, Family and Social Protection (Ministerul Muncii, Familiei şi Protecţiei Sociale, MMFPS), INS, and the International Bank for Reconstruction and Development (IBRD)/World Bank (WB) during the first phase (financial year 2007) of the Programme for Analytical Assistance and Counselling for Monitoring Poverty in Romania.

Among other aspects, the report showed that the at-risk-of-poverty rate, determined according to Eurostat methodology, varied greatly according to the individual social and occupational status. For example, in 2006, the at-risk-of-poverty rate for employed persons was 3.9%, while it stood at 37.4% for self-employed persons (including agriculture), rising to 36.9% for unemployed people, and totalling 15.1% for retirees. These figures compared with the national average of 18.6%, which includes all segments of the population.

1.2 Please comment on recent trends, giving any data or other evidence available to indicate whether the number of working poor has tended to increase or decline, between 2000 and 2007, especially considering women, young and older workers, self-employed, migrants.

According to the Romania: Poverty Assessment Report, in the period 2000–2006, the at-risk-of-poverty rate fluctuated, although with the exception of the employed, showing a meaningful overall increase between 2000 and 2006 (Table 1).

The groups identified in 2006 as being most vulnerable to the risk of poverty were:

  • children (aged 0–15 years) and young people (aged 16–24 years);

  • the rural population;

  • self-employed workers (including farmers) and unemployed persons;

  • single women and women aged 65 years and over;

  • households comprising two adults and three or more children.

Table 1: At-risk-of-poverty rate, by occupational status, 2000–2006 (%)
  2000 2001 2002 2003 2004 2005 2006
Total population 17.1 17.0 18.1 17.3 17.9 18.2 18.6
Employed 5.0 3.8 3.7 3.3 4.2 4.4 3.9
Self-employed 29.8 32.8 34.4 33.7 32.7 33.4 37.4
Unemployed 29.8 27.6 32.6 30.4 33.8 34.8 36.9
Retired persons 13.1 13.7 14.2 14.7 13.7 14.2 15.1
Other inactive persons 20.2 19.6 21.5 19.6 22.4 23.3 22.6

Source: Romania: Poverty Assessment Report, 2007

A World Bank press release of July 2009 stated that ‘[...] in 2008, only 5.7% of Romania’s population was still living in poverty, after the economic growth of the previous years that had bailed out of poverty hundreds of thousands of persons. As a matter of fact, the absolute number of Romanians still living in total poverty diminished from 2.1 million persons in 2007 to 1.2 million persons in 2008’.

1.3 Please outline the main findings of any research studies which have been undertaken in your country on the working poor or on low pay, more generally, and what they reveal about the characteristics of the people concerned and the jobs that they do and how these might be changing over time.

The analysis carried out for the Romania: Poverty Assessment Report indicates, for the period 2003–2006, that:

  • persons living in households comprising five or more members are prone to poverty three times more than those belonging to households with two or three members;

  • a child living in a rural family faces a poverty risk that is three times higher than that for a child living in an urban area;

  • of the young people aged 15–24 years who are exposed to the risk of poverty, approximately one third (including household labour) were self-employed, while 37.3% of them were secondary school or academic students, 14.6% were unemployed and 4.3% were employees;

  • the poverty risk varies widely according to occupation and area of residence (Table 2);

  • the risk of poverty for elderly persons decreased to a half of the level recorded in 2003;

  • some 70% of adults at risk of poverty completed eight years of education, at most, and graduates of vocational schools were more numerous in this category than those who completed a secondary school education (23.4% against 13.3% in 2006).

Table 2: At-risk-of-poverty rate, by occupational status and area of residence, 2003 and 2006 (%)
  Year Bucharest Municipium Large towns Average-sized towns Small towns Large villages Other rural localities Total
Employees 2003 4.3 5.1 8.1 10.0 15.7 16.1 9.0
2006 2.2 1.5 3.1 3.1 6.0 7.2 3.5
Unemployed 2003 20.8 28.1 30.1 40.6 51.6 54.8 39.3
2006 12.7 16.2 23.0 27.6 33.7 38.9 27.3
Retirees 2003 5.0 10.7 11.0 16.6 27.2 30.9 20.7
2006 1.8 2.7 5.6 6.9 14.8 15.6 9.8

Source: Romania: Poverty Assessment Report, estimates by World Bank experts, based on data from the INS ‘Inquiry into Family Budgets’, 2007

When the ‘Romania Partnership Strategy for the Period 2009–2013’ was launched in mid July 2009, the World Bank stated that the groups most vulnerable to poverty were living in rural areas, where 75% of poor persons lived. Similarly, children face a higher risk of poverty, particularly those coming from large families, young people, the Roma community, unemployed households, and families comprising rural workers.

With regard to agricultural workers, in addition to the traditional categories of employee, employer and self-employed person, the structure of employment according to occupational status includes unpaid family workers. The Household Labour Force Survey (Ancheta forţei de muncă în gospodării, AMIGO), conducted annually by INS, provides the following definition for this category of workers: ‘The unpaid family worker works in a household managed by a member of the family or relative and receives no remuneration either in the form of a wage or in kind. The farm household (agricultural) is considered such a unit. If several people in a household work on the family farm, one of them – most often the head of the household – is considered to be self-employed, while the rest are unpaid family workers.’

The incidence of unpaid work is most common in the area of subsistence agriculture in Romania. In 2005, agriculture accounted for approximately 32% of total employment. Of the more than 2.9 million people working in agriculture, 1.5 million were self-employed workers and 1.24 million were unpaid family workers. In the context of the INS definition of the unpaid family worker, the boundary line between self-employed workers and unpaid family workers in terms of remuneration is not very evident in Romanian subsistence agriculture. In other words, according to the data, 93.7% of farmers were neither employees nor employers (RO0702099I).

2. Policies towards the working poor

2.1 Is the issue of in-work poverty seen as an important problem in your country for the government to address? Has the issue become more or less important in the policy debate over recent years? To what extent is there seen to be a conflict between reducing the number of working poor in your country and increasing the number of people in work?

Reducing poverty is listed among the prime objectives of the ‘Government’s Programme for the period 2009–2012’. Several measures have already been implemented in an effort to prevent social exclusion. To provide the requisite institutional and legal framework, the government adopted Decision No. 1217/2006 regarding the establishment of the national mechanisms for the promotion of social inclusion in Romania.

To provide another instrument for a better analysis of poverty and social exclusion in Romania, the Social Observatory (Observatorul Social) was set up in 2007. Its main purpose is to collect information regarding poverty and social exclusion, as a measure of social requirements and as a starting point for strategic planning in social protection and social inclusion matters.

The observatory submits regular reports on the current status regarding poverty and social exclusion trends, and makes proposals and recommendations on ways to improve the status of vulnerable groups. One other task of the observatory is to support the MMFPS and the government to draw up and, subsequently, oversee the implementation of the ‘National Action Plan for Social Inclusion’. It also seeks to clarify and elaborate on the prerogatives of the National Commission for Social Inclusion (Comisia Naţională privind Incluziunea Socială, CNIS).

The Strategic National Report regarding Social Protection and Social Inclusion for 2008–2010 (492Kb PDF) shows that the Romanian government’s most important measure for controlling poverty is the guaranteed minimum income, which is regulated by Law No. 416/2001, as subsequently amended and supplemented. The guaranteed minimum income has thus been correlated with the other types of income – such as the national minimum wage and unemployment benefit – and is calculated proportional to the structure and members of each household.

The guaranteed minimum income schemes were introduced in Romania’s social security system in an effort to prevent poverty and social exclusion at large and, in the first instance, to prevent extreme deterioration of living standards, as well as to secure a long-term social reintegration of persons in difficulty. The main challenge, according to the strategic report, is determining what the ‘guaranteed minimum level’ means. Therefore, it recommends continued efforts to distribute resources by specific categories of recipients and to develop an assessment and monitoring system to measure the efficiency of creating the guaranteed minimum income.

2.2 What kinds of policy have been devised to address the working poor issue in your country? On which particular area have national policies tended to focus: labour market, social protection, fiscal policy or some combination of these policy areas? Which particular groups are policies targeted at: workers, employers, families?

Romania’s Labour Code has been assigned a special role in addressing the issue of the working poor – more specifically, the provisions therein related to the guaranteed payment of a national minimum wage.

As mentioned, another important tool in tackling poverty is the guaranteed minimum income, enshrined in the Law No. 416/2001, as subsequently amended and supplemented.

According to World Bank findings, in most social assistance programmes, benefits are not linked to actions that reduce exposure to risks, resulting in welfare dependency and work disincentives. The guaranteed minimum income is the only programme that has an in-built work incentive, whereby benefits will increase by 15% if a family member works. The children’s allowance creates a work disincentive for women by granting generous benefits (85% of the salary) for a long period of time (two years).

In February 2009, the Romanian government, through Emergency Ordinance No. 6/2009, put in place the legal basis for the guaranteed minimum welfare pension, which is now the equivalent of about €70 a month. The ordinance states in its preamble the need for adopting the guaranteed minimal pension as a safeguard against social exclusion and poverty, which threatens recipients whose pensions are still below the acceptable level.

Social benefits of all kinds have also been put in place through various programmes: the programme for families, which includes the allowance for newly born children, the children’s allowance, incentives for parents who, although benefiting from parental leave, choose to resume work, gift trousseaus (clothing and other supplies) for newly born children, nursery tickets, the complementary family allowance, the support allowance for single-parent families and the foster-family allowance; newly-weds support programme for newly wedded couple, including a financial contribution of €200 upon marriage; the home heating allowance programme for the cold season.

2.3 Please describe the main measures taken for improving the income situation of the working poor. Are there any fiscal measures in place, in the form of tax credits, or in-work benefits more generally, for maintaining or raising the income of those in employment with low earnings? Are there any social transfer schemes in place to ensure that the income of households exceeds a minimum level, even if the people in the household are in work? If so, please outline their main features, including whether or not they apply to the self-employed as well as employees.

See section 2.2 above.

2.4 Please assess the role that minimum wage legislation plays in limiting the number of working poor. Please indicate the nature of the regulation (statutory/legislative/collectively agreed/sectoral) in your country and how the minimum wage varies between different groups of worker.

Minimum wage regulations play an important role in combating the risk of poverty. Article 159 of the Labour Code provides that the national gross minimum wage guaranteed for the normal working time shall be determined by government decision, after consultations with the trade unions and employer organisations. No employer may negotiate, stipulate, or pay, under an individual employment contract, base salaries below the national gross hourly rate. Employers must guarantee the payment of a monthly gross salary which is at least equal to that of the national gross minimum wage. The social partners negotiate every year a minimum wage provided for by the national collective agreement, which is the threshold for sectoral, group or intra-company collective bargaining. The trend in recent years has been a minimum wage negotiated above the level determined by government.

A collective agreement sets the level of the minimum wage for unskilled workers, and the scale applicable for each level of education and vocational training. The scale starts from 1.0 for unskilled workers, and further provides for a minimum coefficient of 1.2 for skilled workers, or 1.4–1.5 for those with a secondary school education, and 2.0 for higher education graduates. Differences between the negotiated minimum wages may also exist between sectors.

In 2008, for example, the gross minimum wage set by the government was RON 500 (about €124 as at 18 March 2010) for the period January to September, and RON 540 (€134) for the period October to December 2008, which was equal to about 29% of the national gross average monthly salary.

Between sectors, the minimal salaries agreed on in 2008 varied greatly. For example, the minimal gross salary negotiated in the transport sector was RON 700 (€173) a month, or about 38% above the national minimum wage; in the machine-building industry, the negotiated minimal salary was RON 690 (€170), or 36% higher than the national minimum wage; while in the wood industry, the minimal salary was 23% above the national minimum wage. With effect from 1 January 2009, the government approved a monthly minimum wage of RON 600 (€148).

Regarding the proportion of workers receiving a minimum wage, an INS survey conducted in October 2006 found that the proportion of Romanian employees working at least 22 days a month and receiving a gross pay at or below the national minimum wage had increased from 5.4% in 1999 to 8.4% in 2006 (RO0801019I). The proportion varies considerably from one economic sector to another. For instance, the highest proportions of employees earning the minimum wage or less were found in the following sectors: hotels and restaurants (at 23.4% in 2006 compared with 21.4% in 1999); retail trade (at 21.3% in 2006 compared with 18.6% in 1999); industry (at 12.4% in 2006 compared with 19.9% in 1999); real estate (at 12% in both 2006 and 1999); and public administration (at 10.2% in 2006 compared with 0.1% in 1999).

2.5 How effective are the policies in place for reducing the number of working poor? Please refer to any survey, research studies or policy evaluations which have been undertaken to assess the measures in place.

Generally, the strategies and policies that have been developed so far do not directly target the working poor, but poor people at large. In its ‘Romania Partnership Strategy for the Period 2009–2013’, the World Bank is of the opinion that social protection systems in Romania do not address poverty very well, and that Romania’s welfare expenditure per capita is among the lowest in the EU. The World Bank states that: ‘The budget required to satisfy the demand for financial assistance aimed at controlling extended poverty and at covering the demand for unemployment benefits and assistance to poverty-prone persons will be a tough challenge, considering the narrow space for manoeuvre the state revenues leave.’

No data are available regarding the effects of measures taken so far on the working poor.

3. Attitudes of the social partners to the working poor

3.1 What is the attitude of the social partners in your country to the issue of in-work poverty? Is there any debate on the relative priority to be given to the quality of jobs and working conditions as against the quantity of jobs? What has been the impact of the current economic recession on their positions and on the actions taken towards reducing in-work poverty?

During the transition years, the prime aim of the trade unions was to maintain the number of jobs or reduce redundancies to a minimum, as well as to bargain for higher minimum wages. Another aim was to secure collective agreement provisions for better severance pay in the event of collective dismissals.

On 25 July 2008, the Romanian government and the social partners signed a tripartite agreement on the growth of the gross national minimum wage over the period 2008–2014 (RO0808019I). Due to the recent economic and financial crisis, the provisions of the tripartite agreement regarding the growth of the minimum wage, and the ratio between the national minimum wage and average salaries, could no longer be observed.

Similarly, when negotiating their sectoral collective agreement, the trade unions have often accepted the existing minimum wage level – for example in the metal and automotive industries – and refrained from demanding rises for the sake of saving jobs.

3.2 Do trade unions have explicit policy proposals for reducing the number of people on low wages? If so, please outline the main features of these. Do such proposals include complementary schemes on healthcare, pensions and family support to help increase the effective income of workers? Do trade unions see a specific role for themselves in implementing and managing such schemes? What level of importance is attached to reducing the number of working poor in relation to creating more jobs or keeping more people in employment?

The priority of the trade unions has been to maintain jobs and to negotiate as high a minimum wage as possible.

Under the tripartite agreement on the minimum wage for the period 2008–2014, the social partners proposed an increase in the ratio between the minimum wage and the national average salary from 31% in 2008 to 50% by 2014. However, this objective has proved difficult to realise owing to the effects of the economic crisis.

Four of the country’s five national trade union confederations, which are affiliated to the International Trade Union Confederation (ITUC), organised during the period 23 September to 7 October 2008 a campaign sustaining the ‘World Day for Decent Work’. During the first round of debates on the topic of the ‘eradication of poverty and inequities’, the participants approached issues such as the right to work, employment and social welfare. The leader of the National Trade Union Confederation Cartel Alfa (Confederaţia Naţională Sindicală Cartel Alfa, Cartel Alfa), Bogdan Iulian Hossu, highlighted: ‘We want the minimum wage to reach, as soon as possible, the worth of €500, so that it should enable earners to live a decent life’ (RO0810039I).

Furthermore, the National Trade Union Bloc (Blocul Naţional Sindical, BNS) called a rally in May 2009. About 8,000 people joined in the protest in the capital city of Bucharest, coming from all parts of the country and representing almost all economic sectors, including public administration, banking and finance, agriculture, defence and sporting. At the rally, the trade union leaders’ main demands included the safety of jobs, economic programmes capable of creating new jobs, maintaining the current purchasing power of earnings, increasing the minimum wage from RON 600 (€147) to RON 800 (€196), more affordable prices for basic products and services, and a unitary social security system.

At the talks that followed the rally, Romania’s Minister of Labour, Family and Social Protection, Marian Sârbu, made public the government’s intention to sign with the social partners an economic and social pact for the year 2009 (RO0906019I).

3.3 Do employers generally support measures for reducing the extent of in-work poverty? If so, indicate the principal measures they support and implement themselves such as respecting minimum wage levels, ensuring adequate basic rates of pay, paying suitable amounts for working overtime or in bonuses.

The employers were involved in reaching the tripartite agreement on the growth of the gross national minimum wage over the period 2008–2014, signed on 25 July 2008. As mentioned, this agreement provides for a minimum wage rise from 31% of the national average wage at present to 50% by 2014 (RO0808019I).

If the target figures are reached, in 2014 the average gross wage in Romania would be, at the current exchange rate, in the region of €757, while the gross minimum wage would be somewhere around €379. However, assuming that prices remained at today’s levels, Romania would still be, in 2014, far from the pay rates evident in most other EU Member States.

4. Effect of current economic recession on in-work poverty

4.1 Is there any evidence that the number of working poor has tended to increase during the current economic recession (as a result of reduction in wages and/or working time)?

On launching its ‘Romania Partnership Strategy for the Period 2009–2013’ in July 2009, the World Bank predicted that poverty in Romania would worsen in 2009. According to World Bank data, the number of poor people will increase from 5.7% of the population in 2008 (or 1.2 million persons) to 7.4% in 2009 (1.6 million persons).

4.2 Have any surveys or studies been launched since the crisis started to assess the effect on the working poor and to monitor the numbers involved? Please give details of such surveys or studies (their objectives, the approach adopted, the institution in charge, the main findings and so on).

See section 4.1.

4.3 Have any policy measures been taken to reduce the possible effect of the economic recession on the working poor?

Through an emergency ordinance, the government increased the guaranteed minimum income by 15% with effect from July 2009. The rise was approved under the loan agreement with the World Bank, which requested better safeguard measures for the disadvantaged segments of the population during the economic crisis. According to the new ordinance, the guaranteed minimum monthly income shall be about €30 for a single person, €54 for families of two, €75 for families of three, €93 for families of four, €110 for families of five, and about €7.4 per household member for families with more than five persons.

A World Bank press release regarding the partnership strategy with Romania for the period 2009–2013 stated that: ‘considering the huge pressure the global financial crisis has put on the Romanian economy and society, this strategy is designed to establish the means by which the World Bank will support Romania’s efforts to restore its resources for sustainable and equitable growth, so that the country could come out of this crisis stronger, and diminish, with immediate effect, the consequences that the crisis has on the poor.’

In this context, following talks with the European Commission (EC), the Board of Directors of the IBRD/World Bank approved a loan of €300 million for the proposed public financial management, social protection and the financial strengthening programme forseen in the context of the international financial crisis.

5. Commentary

In 2008, the minimum wage in Romania stood at 10%–20% of the equivalent salary in the original 15 EU Member States (EU15), while consumer prices stood at over 50% of the average consumer prices for the EU15. In other words, in Romania, for a gross minimum wage that is five to 10 times lower, one may buy consumer products and services that are only approximately 50% cheaper.

It is estimated that those in receipt of the minimum wage (about €140 a month) account for at least 15% of the 4.5 million employees recorded in Romania’s official statistics. These people can be considered part of the working poor population. Another group among the working poor are farmstead workers, of whom there are over two million. The estimations in this report conclude that 60% of rural workers earn a monthly income that is well below the minimum monthly wage.

Moreover, official statistics regarding the distribution of households (by decile income bracket) show that, in 2007, the monthly income in deciles 1 and 2 amounted to about €110 and €167 respectively, which translates into a monthly average income of €38 per person for decile 1 and €57 for decile 2. The number of people living in households that correspond to these first two deciles is in the region of 5.2 million persons. Given that only 20% of these people work, this means that the number of working poor is about one million persons, which adds to a large share of minimum wage earners. In other words, the number of poor people may be far greater than official statistics quoted by Eurostat and the World Bank. Looking at the statistics overall, the working poor in the old EU Member States would rank among the first on the list in terms of the most favourable wage earnings compared with Romania.

References

International Bank for Reconstruction and Development (IBRD)/World Bank, Romania: Poverty Assessment. Analytical and Advisory Assistance Program: First Phase Report, Fiscal Year 2007 (537Kb PDF), Report No. 40120-RO, November 2007.

International Bank for Reconstruction and Development (IBRD) and International Finance Corporation, Romania Country Partnership Strategy for the Period 2009–2013 (76Kb PDF), June 2009.

Ministry of Labour, Family and Social Protection, Strategic National Report Regarding Social Protection and Social Inclusion for 2008–2010 (492Kb PDF), Bucharest, Ministry of Labour, Family and Social Protection, September 2008.

National Institute of Statistics (INS), Sustainable development indicators online database, Bucharest, INS, 2008.

National Institute of Statistics (INS), The Household Labour Force Survey [Ancheta forţei de muncă în gospodării, AMIGO], Bucharest, INS, 2008.

Constantin Ciutacu, Institute of National Economy, Romanian Academy

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