It is said that Romanians do not have high salaries because they are not productive.
In fact, the Romanian employees have the highest labor productivity compared to the wages of the whole European Union.
You also see what is the share of the remuneration of the employees in the value added in the food retail sector, where the pyramid is reversed – if we are the first (192%) in productivity, the last (49%) in wages, below the European average of 66%.
We work most efficiently for the least money. And this is when the value added in the sector increased by 85% between 2012 and 2016 – again, the highest growth in the EU.
Employees in Romania have the highest productivity compared to wages in the EU (FES study on the trade sector)
The Friedrich Ebert Foundation together with Syndex Romania launched the study “Trade sector in Romania – a balance after three decades of transformations”. The study is conducted by Syndex Romania, authors Stefan Guga and Marcel Spătari, and offers an assessment of the current situation of the Romanian trade sector and of the transformations it has undergone during the last decades.
The main conclusions of the study:
After 1990, we can identify at least three phases of trade sector development:
(1) the 1990s – the first part of the 2000s: the glory period of the small trade;
(2) mid-2000s – late 2010s: the rise of large multinational chains;
(3) end of 2000 – present: development of e-commerce.
The development of hypermarket chains and the decline of small trade with domestic capital seem to have had a major negative impact on cash & carry stores, which for many years were the pioneers of foreign investments in Romanian trade. At the same time, the growth of the hypermarket segment seems to have reached its limits, which is suggested by the completion of very aggressive development strategies and attempts to diversify activities towards the supermarket and proximity segments.
Foreign investments in the latter have directly affected the viability of small companies with domestic capital, many of them unable to cope with the new competitors. For the big commercial chains, the directions of development for the future seem to be the expansion in the small cities or even in the rural area, as well as the intensification of the competition in the big and medium cities – both involve the segments of the supermarket and shops of proximity.
Leaving aside the temporary decline of the crisis period, from 2007 to present the population employed in trade has remained constant – about 1.2 million people.
Behind this figure, however, are important transformations: the decrease in the share of informal work and entrepreneurship, or the increase in the number of employees in large and very large enterprises.
The productivity of labor in the latter is significantly higher than that of small businesses, but this is only partially seen in the income of the employees. In other words, even though the employees of the multinational companies in the trade earn better than their peers in the small companies with domestic capital, the distribution of value added has become more and more unfavorable to the labor force in the last decade, most of the benefits of productivity growth. going to employers. From this point of view, the big companies of the trade do not make a discordant note in the landscape of the economy of Romania.
The growth rate of the activity of the food retail sector in Romania was well above the European average. This evolution was due to a favorable economic context, but it was fueled by a much higher labor productivity due to the increase in labor intensity.
Thus, in the period 2012-2016 the value added increased by 85% in the food retail sector, while the evolution of the share of the remuneration of the employees in the added value fell from 62.2% in 2012 – below the European average of 68.7% in that year – up to 48.8% in 2016.
Thus, in 2016 the remuneration of retail employees as part of the added value was in Romania at the second lowest level in the European Union (49%), well below the European average (66%).
Wages are the most sensitive subject, but the physically demanding working conditions, especially from the psychic point of view, make the general level of satisfaction of the employees with regard to the situation at the workplace quite low.
Employers are actually trying to compensate for the shortage of staff by increasing the intensity of work, while wages remain far below the actual needs of the employees.
Under such conditions, it is not surprising that firms have difficulty attracting young employees, while the existing workforce is getting older and more dissatisfied with what companies offer.
Certainly, the problem of staff shortages requires more drastic solutions to increase wages and improve working conditions.