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October 28, 2021
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Romanian Public Sector to Lay Off Employees in 2021

Romania is one of the European countries where there is this huge discrepancy between the salaries in the public sector and the salaries in the private sector. Besides, in Romania the number of the public employees has grown almost each year and now it reaches an astonishing figure.

Romanian Public Sector: 1.3 million employees

In total, in Romania there are around 1.3 million public employees. Some analysts already consider this figure exaggerated, let alone the performance of the public sector altogether.

The Netherlands, for example, a country with a population of around 17 million, as compared to Romania, which has around 21 million, there are 1 million employees in the public sector. A comparable figure, some might say, but there is one “little” difference: the GDP and the economic power of the country. The Netherlands afford hiring so many public servants, such as to better serve the communities, but Romania cannot compare to the Dutch state in terms of economic and financial power.

How many public employees needed in Romania?

Ask any politician this question and you won’t get two answers alike. In fact, nobody could answer this question. It’s hard because no serious evaluation was conducted over the years as to the quality of the public services in relation to the number of the employees.

We can answer other questions instead.

Are the public employees in Romania necessary? But of course they are, in any country, by all means, but not in such a high number, especially when the country is still struggling during this tough crisis.

Do the Romanian public employees need to be paid with decent salaries? Of course they do, but the salaries in the public sector need to be aligned to the economic power of the country and also to the quality of the services offered. You’d be taken aback by the vocabulary, the tone of voice and the attitude used by some public employees paid from our taxes while being addressed a simple request.

Do the citizens deserve better services from the public sector? Indeed, they do. But it’s not the case in Romania, unfortunately.

Is the public sector a burden for the private sector in Romania?

More and more consider that the public sector is the burden on the private sector’s shoulders. One can tell that by studying the level of the average salary in the public sector and the ratio with the one in the private sector.

Analyses indicate that the salary in the public sector exceeds with 50% the average net salary in the private sector. Precisely, the private sector employee earns an average of 629 EUR a month, while in the public sector the average net salary is 1430 EUR a month. This is the biggest discrepancy in the European Union. Is the public sector 50% more performant than the private one? Not at all, but on the contrary!

It’s even more than that: the pension system rewards some of the public employees with much more than their monthly salaries. In Romania there are pensioners who earn as much as 10,000 EUR a month, a sum which could induce envy among the Western European pensioners.

It’s not only that: the previous social-democratic government intended to raise the pensions even more which could have been a good thing for the pensioners, but it could’ve spelled disaster for the long term public debt.

The restructuring of the Romanian public sector: the layoffs

The succeeded governments ruling the country promised to reform the public system and to diminish the number of the public employees, but these were only promises, as we could see. Year after year, new public employees were hired in the name of a better public service for the population, but this is far from happening. Some might say it’s even worse.

This time, though, the liberal government ruling the country decided to take the first small, but steady steps towards reforming the public system. The Prime Minister announced his intention of reforming the state sector, including the personnel in the ministries. Also, a first move was made in one of the state owned companies: CFR Marfă, the Romanian state railway transporter, will lay off almost a third of its personnel.

The decision was made to lay off 1,400 employees from almost 5,300. Even so, the average net salary for the remaining employees, of around 1,000 EUR, remains way above the one in the private sector. Still, the layoff process will cut off 14% of the overall expense with the salaries.

Will laying off personnel and keeping or slightly reducing the average salaries bring better service for the population? If so, what would be the criteria used to reduce the number of the personnel? Performance? Almost all state employees are evaluated as “very good” when it comes to their annual performance evaluation. Age? It would be discriminatory.

The Romanian Government has to decide upon all that and even more – it has to analyze the underperforming sectors of the economy and to lay off or restructure the public owned companies. Only by doing that the companies run by the state will get to bring their own contribution to the GDP instead of living off the tax payers money.

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