The new public sector wage law will have a negative impact on the activity of local companies, which will find it even more difficult to compete with the public sector for attracting employees.

Over 2.44 million employees currently work for companies with Romanian capital, but the employers warn that they have already started to experience a massive migration of the engineers from the private sector to the state, where salaries are higher, reports local Economica.net.

The provisions in the public sector wage law defy economic realities and the employees in the private sector, especially those working for companies with local capital, according to the Association of Local Investors PIAROM.

The local investors warn that many companies will be unable to continue their activity because they won’t be able to pay salaries similar to those in the public sector and will lose their employees, which will affect the budget revenues. PIAROM also points out that the salaries in the private sector are based on productivity, job complexity, and sectorial competition, and that these criteria are missing from the public pay law.

Other local investors’ associations have expressed similar concerns related to the new public pay law in recent months.

The average salary in the public sector was EUR 842, in February, compared to EUR 652 in the private sector. The gap will increase significantly after the new wage law comes into effect.

editor@romania-insider.com