Romania’s Government has drafted three alternative formulas for adjusting the minimum wage on an annual basis - all of them resulting in an adjustment of 7.2% to be operated as of January 2020, Ziarul Financiar reported.

The main elements included in the model are the inflation rate measured in October and the rise in productivity per employee calculated for the previous year. For the minimum wage increase in January 2020, the October 2019 inflation and the 2018 productivity increase were considered.

In addition to the “plain vanilla” formula, that simply aggregates the two growth rates, there are also two alternative formulas providing correction for the GDP growth and unemployment with the purpose of avoiding pro-cyclical measures.

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