Romania’s labor costs up 13 pct last year

Romania maintained last year a double-digit growth rate of the hourly labor costs, of 13.1 percent, but still ranks second-lowest in terms of wages, after Bulgaria.

In the last quarter of 2018, the hourly labor costs rose by 0.6 percent quarter-on-quarter and by 13.1 percent year-on-year.

The fastest growth rates were registered last year in health and social assistance (+32 percent y/y), education (20 percent) and IT&C (17 percent), while labor costs in mining and quarrying declined by 9.2 percent.

In 2017, Romania’s hourly labor costs rose by 15 percent, the fastest growth rate in the EU.

Romania’s hourly labor costs rose from EUR 4.9 in 2015 to EUR 5.5 in 2016 and EUR 6.3 in 2017. Compared with 2004, when they amounted EUR 1.9, Romania’s hourly labor costs grew 3.3 times, Eurostat data show.

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Expressed in national currency, Romania registered a 17.1 percent increase in hourly labour costs in the whole economy, from RON 24.7 in 2016 to RON 28.9 in 2017, the fastest growth in EU.

Official data show significant gaps between EU member states, “with the lowest hourly labour costs recorded in Bulgaria (EUR 4.9), Romania (EUR 6.3), Lithuania (EUR 8.0), Latvia (EUR 8.1), Hungary (EUR 9.1) and Poland (EUR 9.4), and the highest in Denmark (EUR 42.5), Belgium (EUR 39.6), Luxembourg (EUR 37.6), Sweden (EUR 36.6) and France (EUR 36.0)”.

Due to the fast wage growth, the gap between Romania and the other countries from EU’s Eastern flank has diminished. In 2004, labor costs in Hungary were 3.1 times higher than in Romania (EUR 5.9 vs. EUR 1.9), but last year the difference declined to 44 percent (EUR 9.1 vs. EUR 6.3).