The pros and cons of the unitary pay law

The unitary pay law has triggered fierce debates in Romania

Leyla Cheamil, 04.04.2018, 13:51

The unitary pay law, which came into force in 2017, providing an increase in monthly incomes in the coming five years, started showing effects in January 1st this year. These effects however have triggered controversies and protests among employees in several fields of the public sector. When the law was promulgated, in June last year, the head of state Klaus Iohannis argued that sustainable salary increases were necessary, in order to improve peoples living standards and to do away with inequities and income gaps.

On Tuesday, President Iohannis invited the Prime Minister Viorica Dancila and the Labour Minister Lia Olguta Vasilescu for talks on the effects of the new law in the first quarter of the year, in relation to the principles and commitments assumed by the ruling coalition, formed by the Social Democratic Party and the Alliance of Liberals and Democrats. The President warned that, against the background of reckless fiscal-budgetary policies, incongruous with the overall dynamics of Romanian economy, people run the risk of seeing further drops in purchasing power.

In response to that, Prime Minister Viorica Dancila talked about the economic growth and the good results registered last year, which have improved living standards. She recalled that the average gross salary went up by 14%, and pensions grew by 18% as compared to the previous year. Here is Prime Minister Viorica Dancila:

Viorica Dancila: “Personnel expenditure has grown by 19%. This means that salaries in the public sector have grown by 19% as compared to 2017, which in turn means that 1.2 million families now have bigger incomes. Official statistics show that the purchasing power in Romania went up by 12.7% in 2017, in terms of salaries, and by 10.3% relative to pensions.

In turn, the Labour Minister Lia Olguta Vasilescu stressed that the new salary scheme will start showing its full effects as of 2022. On the other hand, though, the president of the National Liberal Party Ludovic Orban says that from the very beginning the Liberals raised an alarm signal as to the fiscal chaos created by the new salary law.

Ludovic Orban: “This law runs counter to the very principles that were presented as arguments in favour of the new law. The law has been by no means unitary; quite the opposite. One proof that the law is bad is that the government had to change it several times, by means of emergency ordinances and amendments to emergency ordinances.

Orban has also stated that, in fact, the unitary pay law has seriously discriminated against several categories of public sector employees, and mentioned the example of the public healthcare, where doctors salaries have been increased, but that has not happened for the other categories of staff in the system.

(translated by: Mihaela Ignatescu)