Tariceanu: Salaries seem to have increased in an exaggerated way as they start from a very low level

Salaries seem to have increased exaggeratedly much in percentages only because Romania started from somewhere very low, says Premier Calin Popescu-Tariceanu in an interview last week.
According to the Prime Minister, salaries will go on increasing without affecting the economy as they anyway increased less that the productivity of companies.
“Romania’s attractiveness must not only be represented by the low salaries, it must be represented by the opportunities it offers to investments,” says Tariceanu.
The cheap manpower was the main element drawing foreign investors in the past few years, but the local market starts losing this advantage after the salary rises in the past few years. According to the statistics bureau of the European Union, the total costs with manpower incurred by the employers in Romania had the most spectacular evolution in the past seven years, as compared with other countries in Central and Eastern Europe.
Thus, costs went up by over 309% starting in 2000 till the second quarter of last year. In other countries such as the Czech Republic the advance of the costs of manpower was much more moderate, only 57% all along the seven years. At the same time the net average salary increased in the past ten years 3.4 times, from 104 euros in 1989 to 354 euros in June this year, the most favoured sector being the public administration, with a rise in salaries of almost 5 times, say the data supplied by the National Statistics Institute (INS).
However, the profitableness rate per employee is ten times lower in Romania than in Europe and the incomes per employee are only four times lower than the European average. According to the study Saratoga – Human Capital benchmarking, made by PwC in 2007, the revenues generated to a company by an employee amount to 40,000 euros a year in Romania, whereas in Europe they top 160,000 euros.

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