Poverty and the lack of jobs have driven more than three million Romanians abroad to look for work over the past decade and none of the governments so far has put any policy in place to bring them back.
If the 2.5 million Romanians working abroad worked in Romania for an average salary of EUR340 a month, the total salary volume would go up by EUR18.5 billion to more than EUR50 billion a year. Out of this amount, at least EUR8.25 billion would go to the public budget as contributions paid by employers and employees for healthcare, pensions, unemployment and as payroll tax, while the rest would go toward consumer spending.
Ionel Blanculescu, owner of Consultanta si Investigatii Financiare (Financial Consultancy and Investigation), says the migration phenomenon is like Maslow’s hierarchy of needs. He says the main reason why Romanians migrate mostly to Italy and Spain (countries in whose organizational culture they do better), is that they have higher aspirations than what their own country can fulfill, the same way as Italians and Spaniards migrate to France and the UK and Germans, French, and Brits go to the US.
“The workforce leaving Romania is the highest-skilled because it has the necessary professionalism for a superior market in terms of labor quality, which was difficult to get into and where they specialized. Had this workforce not left, the jobless rate would have probably been higher during the crisis, when EU member states saw rates of 9% while Romania’s was only 5%,” Blanculescu explains.
One of Romania’s biggest problems is the low number of employees compared with the population that can actually work, considering the number of salaried employees is 4.3 million (half as many as there were twenty years ago) and the total number of employees is 9 million. The employment rate in Romania, 58-59%, is currently much lower than in Germany’s, for instance, where it stands at 70%, considering the country is experiencing a shortage of skills and population aging.
“We don’t have realistic solutions in the country to create many jobs to boost the employment rate, because we cannot absorb as much workforce as to match the technical development, which is quite high in Romania. The migration phenomenon is normal and will continue; arguments about the quorum condition (for the recent referendum on the impeachment of Romania’s President Traian Basescu i.e.) are pointless because Romania will always have 2 or 3 million employees working abroad who will not return,” Blanculescu added.
A salaried employee is currently supporting 1.2 retired people from their taxes, and the pension fund’s deficit, which exceeded EUR3 billion this year, keeps increasing. Before the crisis, when there were more salaried and higher-paid employees, the pension budget even posted surplus, such as the EUR320 million in 2006.
Blanculescu admits that, with technological development, more and more people will have trouble finding a job, which is why now plant construction could not generate too many new jobs. The only thing Romania can do is make sure its inhabitants get highly specialized so they can find jobs abroad.
Almost two million Romanians left to work in Italy (more than 1.2 million) and Spain (830,000) over the past few years. Romanian employees have sent more than EUR53 billion back home in the past decade, with remittances dropping significantly during the crisis, according to the data published by the central bank. The peak year was 2008, with EUR8.64 billion. Foreign investment in 2008 stood at EUR9.5 billion, and the number of employees was up to more than 4.8 million (the highest level in the past decade).
How ZF calculated its figures:
The total cost of an employer for an average net salary of EUR340 per month is EUR615, therefore the total salary volume for the 4.3 million salaried employees is EUR31.7 billion a year.
If the 2.5 million Romanians aged over 18 working abroad worked in Romania, the total salary volume would reach EUR50.15 billion a year.
(English version by Loredana Fratila-Cristescu)