Impact of COVID-19 already hurting wages in Romania

The results of the economic crisis generated by social distancing measures are already visible in Romania: The net average salary dropped by RON 100 (EUR 23) in one month, taking the average net wage for Romanian citizens in August to RON 3275 (EUR 672).

In August 2020, the average gross nominal earnings were RON 5,337 (EUR 1,095), 2.4 percent lower than that registered in July 2020. The average net nominal earnings dropped by 2.9 percent but were 7.6 percent higher versus August of the previous year. The most affected private sector was IT, where the average net salary fell by RON 500. IT sector employees, however, have no reason to fear (yet), as their average net wage is RON 7,400 (EUR 1,518), more than four times the net average salary that employees in the hospitality industry take home (RON 1,700 or EUR 349).

This should raise a red flag for many: Workers in the grossly underfinanced education system, including teachers, have seen the biggest – 12 percent – cut in their monthly wages, followed by those in public administration and healthcare.

The decreases in average net earnings have been caused by suspended activities in the wake of the coronavirus, which has led to the continuation of technical unemployment for certain economic operators and partial remuneration of employees. Other consequences have included production target failures and lower sales, as well as the hiring staff at lower wages compared to the average in certain economic activities, the National Institute of Statistics noted.

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Author: István Fekete