Minimum Wage Institution In The Financial And Economic Crisis. Policies And Practices
The economic and financial crisis became apparent in Romania somewhatdelayed but persists and is aggravated due to the weak sustainability of the economic growthrecorded in the last few years. The considerable diminishment of output because of reducedexports and domestic demand compression for goods and services generates new unemployedcontingents and triggers the diminishment of employees’ earnings. Additionally, thedistribution of employees on income brackets places the median under the level of the averagewage on economy and heightens incomes’ inequality. In this context, the economic and socialsignificance of the minimum wage increases from the perspective of sustaining domesticdemand and from the social one of maintaining an adequate living standard, as well. In spiteof the sizeable increase of the minimum wage during the transition period, it remains one ofthe lowest in EU and it does not exceed the minimum subsistence level. The paper presents thecrisis impact on the labour market from the viewpoint of using the minimum wage asinstrument of maintaining/stimulating domestic demand and social protection of employeesand identifies the elements of adequate policies for the crisis situation and to theparticularities of labour market and economic conditions in Romania.
Volume (Year): 2 (2009)
Issue (Month): 11 ()
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- Jante Parlevliet & Theodora Xenogiani, 2008. "Report on Informal Employment in Romania," OECD Development Centre Working Papers 271, OECD Publishing.
- International Monetary Fund, 2009. "Romania; Request for Stand-By Arrangement: Staff Report; Staff Supplements; and Press Release on the Executive Board Discussion," IMF Staff Country Reports 09/183, International Monetary Fund.
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