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Minimum Wage Institution In The Financial And Economic Crisis. Policies And Practices.

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  • Valentina Vasile

Abstract

The economic and financial crisis became apparent in Romania somewhat delayed but persists and is aggravated due to the weak sustainability of the economic growth recorded in the last few years. The considerable diminishment of output because of reduced exports and domestic demand compression for goods and services generates new unemployed contingents and triggers the diminishment of employees' earnings. Additionally, the distribution of employees on income brackets places the median under the level of the average wage on economy and heightens incomes' inequality. In this context, the economic and social significance of the minimum wage increases from the perspective of sustaining domestic demand and from the social one of maintaining an adequate living standard, as well. In spite of the sizeable increase of the minimum wage during the transition period, it remains one of the lowest in EU and it does not exceed the minimum subsistence level. The paper presents the crisis impact on the labour market from the viewpoint of using the minimum wage as instrument of maintaining/stimulating domestic demand and social protection of employees and identifies the elements of adequate policies for the crisis situation and to the particularities of labour market and economic conditions in Romania.

Suggested Citation

  • Valentina Vasile, 2009. "Minimum Wage Institution In The Financial And Economic Crisis. Policies And Practices.," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(11), pages 1-2.
    • Handle: RePEc:alu:journl:v:2:y:2009:i:11:p:2
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    References listed on IDEAS

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    3. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 11855, April.
    4. International Monetary Fund, 2009. "Guatemala: Request for Stand-By Arrangement-Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Guatemala," IMF Staff Country Reports 2009/143, International Monetary Fund.
    5. World Bank, 2009. "World Development Indicators 2009," World Bank Publications - Books, The World Bank Group, number 4367, April.
    6. International Labour Office., 2008. "Global employment trends for youth : October 2008," Global Employment Trends Reports 994801993402676, International Labour Office, Economic and Labour Market Analysis Department.
    7. International Monetary Fund, 2009. "Mongolia: Request for Stand-By Arrangement: Staff Report; Staff Supplements; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Mongolia," IMF Staff Country Reports 2009/130, International Monetary Fund.
    8. Jacques Poot & Brigitte Waldorf & Leo van Wissen (ed.), 2009. "Migration and Human Capital," Books, Edward Elgar Publishing, number 12599, August.
    9. Jante Parlevliet & Theodora Xenogiani, 2008. "Report on Informal Employment in Romania," OECD Development Centre Working Papers 271, OECD Publishing.
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    Cited by:

    1. Claudiu George BOCEAN, 2012. "Human Resource Compensation In Time Of Crisis," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 285-292, November.
    2. Ivona STOICA, 2015. "The regional consumption credit. Trends, structures and territorial relevance," Romanian Journal of Economics, Institute of National Economy, vol. 41(2(50)), pages 282-296, december.

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    More about this item

    Keywords

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    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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