Pay Rises and Elections
Government warns that raising salaries on the eve of elections might damage the economy
Roxana Vasile, 04.11.2016, 12:48
If Romania has registered the highest economic growth rate in the whole of the EU, why are you against pay rises? This is how some of the politicians in Bucharest have attacked the Government, which opposes some of the questionable decisions made by Parliament lately, in the run up to the December 11th elections.
It has actually become quite a habit before elections for political figures to resort to various ways of buying votes. In the first years after the Revolution, they would hand out flour, sunflower oil, buckets or aprons, but, gradually, such useful commodities were replaced by legislative initiatives aimed at securing more votes for those who needed them.
Early this week, the joint budget and labour committees of the Romanian Chamber of Deputies endorsed a 15% raise in salaries in public education as of January 1st, 2017, and a similar one, as of December this year, for salaries in the healthcare sector. Also, they decided that bonuses for the administrative staff in public healthcare be calculated based on the salary level in 2016, not in 2009 as it was the case before. Also, staff with the health insurance agencies will have their salaries raised by 25%.
On Monday, the Chamber is to vote on these measures, and the Labour Minister Dragos Pislaru warns that such pay rises might affect the economy. He has stated that a government order has already regulated a 15% pay raise for employees in the education and healthcare sectors, plus a further 15% increase at a later time. He argues however that such raises should take place gradually by 2021.
Dragos Pislaru: “In any normal country, payroll expenses must not exceed a certain percentage of the budget, because when you invest in salaries rather than in infrastructure, when you practically ignore any warning, you must accept that this could raise the suspicion – which this time I believe is well grounded – that its just electoral bait. This summer we came up with a plan: to increase the entire payroll in the public sector by 2021, by 30% on average.
The Economy Minister and Deputy Prime Minister Costin Borc has said that if the salary bill, as it is today, is endorsed by Parliament, the Government will take it to the Constitutional Court. According to the Executive, the impact on the budget of the laws voted by Parliament in the past months stands at some 2 billion Euros. This will either increase the deficit or decrease the amounts of money allotted for investment. Moreover, the gaps between the salaries of various categories of public sector employees would widen.
From an economic standpoint, Romania is in a good situation. What would be the point then in destroying it in order to just win several extra votes? Increasing salaries in the education and healthcare sectors once again might throw Romania back to the 2008 election year, when Parliament offered pay raises only to subsequently cut salaries twice as much because of the economic crisis.
(translated by: Mihaela Ignatescu)
