Romania among countries with the lowest gross minimum wages in the EU

Romania continues to be among the European Union countries with the lowest gross salaries on the economy, of 743 euro (approximately 3,700 lei) in Q2 of 2024, according to the most recent infographic  published by the Social Monitor, a project of the Friedrich Ebert Foundation Romania.In Q2 2023, the minimum gross salary per economy in Romania was 604 euro (approximately 3,000 lei).‘Romania was in 2024 almost close to the level of the minimum gross salaries in Bulgaria (477 euro), Hungary (675 euro) and Latvia (700 euro). Starting with 1January 2025, the minimum gross salary in Romania will increase at 4,050 lei/month against 3,700 lei as it is at present, according to a government decision adopted in November 2024. The minimum net salary, namely what the employee gets will be 2,575 lei (515 euro)/month (with deduction of 300 lei which is valid today) with 212 lei more than at the end of 2024’ say the representatives of Friedrich Ebert Foundation Romania.Over the last ten years, Romania has recorded the highest increase in the minimum wage in the European Union, on average +13.7% per year, followed by Lithuania (+12.3%) and Bulgaria (+10.6%). In July 2024, Romania will be in the group of countries with a gross minimum wage of around €1,000 (group 2 according to Eurostat data, around 5,000 lei), alongside the countries of Central and South-Eastern Europe. Even so, the level of the minimum salary in Romania is lower than other countries in Centre and Eastern Europe, such as Croatia (840 euro), Estonia (820 euro), Lithuania (924 euro), Poland (997 euro), Slovenia (1,253 euro). At the other end, the highest minimum gross salaries are registered in western European countries such as Luxembourg (2570 euro), The Netherlands (2,134 euro), Ireland (2,146 euro), Belgium (2,070 euro) and Germany (2,054 euro).Despite constant increases, the net minimum wage remains insufficient to cover the needs of a decent living in Romania. According to the updated calculations of the minimum basket for a decent living, carried out by the Friedrich Ebert Foundation in collaboration with Syndex Romania, the value of the minimum consumption basket for September 2024 amounts to 10,450 lei per month for a family of two adults and two children, and 3,972 lei per month for a single adult. Since joining the European Union until 2022, Romania has generally ranked second overall among the countries with the lowest minimum wage in the EU, after Bulgaria. From 2024 onwards, there is a slight catching-up with Central and Eastern European countries. However, Romania's minimum wage policy has its own peculiarities that put employees at a disadvantage. At present, the minimum wage is not set according to the branch of industry, the level of vocational training or the length of service of employees. Recent data do not provide a clear picture of the sectors in which most minimum wage employees work. However, previous studies informing the 2016 minimum wage policy indicate that these sectors include manufacturing, distributive trades (both wholesale and retail), repair of motor vehicles and motorcycles, hotels and restaurants. Employees in these sectors have been among the hardest hit by the COVID-19 pandemic, often being the first to be sent on technical unemployment. The evolution of the number of labour contracts paid at the minimum wage shows a significant increase in recent years. While around 450,000 such contracts were recorded in 2011, the number has steadily increased to 1.95 million (37% of all contracts) in 2017 and 2.8 million (46%) in 2018. By 2025, the government has estimated that around 1.8 million employees will benefit from the minimum wage policy. According to the quoted source, over the last 35 years, the minimum wage policy strongly influenced the development strategy of Romania but the country has constantly kept the last positions in Europe, irrespective of the economic growth recorded. At European level, the minimum wage policy is regulated through the European Pillar of Social Right, principle 6 which states minimum wages adequate to a decent living. In 2022, the European Council and Parliament adopted Directive (EU)2022/2041 which aims at improving the working conditions in the EU through establishing a common framework for  the adequacy of statutory minimum wages.