October 2, 2022

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One million budget holders will have 150 lei higher salaries. A state employee’s salary is 30% higher than in the private sector

One million budget workers will receive salaries increased by 150 lei on average. The increase will come into effect starting with August, announces the Minister of Labor, who assures that the money needed for the increases is already included in the budget.

The government has also decided to increase aid for the vulnerable. The elderly and families with children or people on the edge of survival would receive an additional 100 lei. The authorities have not yet determined when this increase will be applied.

The wage increases decided now for state employees mean an additional expenditure of 2 billion lei until December. If we look at how much money was given for salaries and increments in the budget system, 68 billion lei were collected in the first seven months of the year.

This means a quarter of the total expenditures made by the state during this period. But the most money is given to social assistance – that is, pensions, child benefits and social benefits – all exceeded 100 billion lei, which is a third of the total.

We go further and balance the state’s expenditures and revenues – you see – the state spends more than it has in the budget. State revenues were over 26 billion lei lower than expenses, and the gap is covered by loans.

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employment, budgets, state

7,000 lei average salary for budget workers, only 5,500 lei for private workers

We have the deficit here with the red line – if in the first three months we were talking about 15 billion lei, in the middle of the year it was already over 23 billion, and at the end of the year we could have a huge deficit: 80 billion lei.

1 million state employees will benefit from increased wages, out of a total of 1 million 200 thousand, for the salaries related to the month of August. Basically, it is about all those who, due to the pandemic, had their increases postponed.

Now, they receive a quarter of what they were still due as a raise, according to the wage law.

Marius Budai, Minister of Labour: ”The increases will be around 150 lei per employee and there are employees who will receive even less. These expenses will be made within the already approved budget“.

In recent years, the raises from the state have been much more frequent and higher than those from the private sector, according to official data. According to the Fiscal Council, in 2021, the average salary in the state was 30% higher than in the private sector, i.e. 7,000 lei compared to 5,500 lei.

Although pensions had to be increased, the Minister of Labor talks about their increase only from January 1, 2023. However, the government decided to increase social benefits. For the 165,000 Romanians on the edge of survival, from the fall of next year the income would increase from 260 lei to 275 lei. For the elderly from 300 to 400 lei, and for families with children – from 600 to 700 lei.

Big problems with price increases are all over Europe

All of Europe is facing big problems due to rising prices and bills, and governments are forced to make efforts to help people.

In Britain, people are taking to the streets to demand higher wages.

Rebecca McDonald, Chief Economist, Joseph Rowntree Foundation: ”This decline in living standards is on a scale not seen in decades. Serious interventions are needed to prevent a difficult year from turning into a catastrophe for many low-income families“.

In France, the authorities have decided to increase the minimum wage and civil servants’ wages, but also a more generous tax relief scheme to help those on very low wages.

Germany is coming with similar measures, where from next year incomes under 10,600 euros will no longer be taxed, and child allowances will increase.

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