Romania is facing a major crisis in terms of employment, with only 69% of Romanians aged between 20 and 64 currently being in employment. This means that almost a third of the population does not have a job, leading to significant economic challenges. Recently, Romania’s national trade union organized a protest outside the parliament building to demand lower taxation on wages, as they are overwhelmed by taxes and fees that they believe must be lowered. The protesters, consisting of around 3,000 union members, argue that high taxes are hindering their ability to raise their standard of living and are pushing many Romanians to emigrate in search of better salaries abroad.
The protesters are particularly angry at what they perceive as a hostile labor market, accusing the political elite of prioritizing capital over the well-being of workers. They claim that more than 42% of their gross income goes to the state, which is significantly higher than the EU average of 38%. This high level of taxation, combined with low wages, has resulted in Romania having the third lowest employment rate in the EU in 2023, trailing behind countries like Italy and Greece. The president of the National Trade Union Bloc, Dumitru Costin, highlighted the issue of almost two million citizens who did not pay any tax on their incomes or contributions to pensions or health last year, further exacerbating the problem.
In 2023, Romania had an employed population of 7.7 million people, but only 5.6 million people paid social security contributions, leaving 2.1 million employed individuals who did not contribute. Despite the base income tax rate being set at 10%, mandatory contributions to various funds and the state budget result in a much higher percentage of gross salary being taken by the state. Kontas Management, an accounting services company based in Bucharest, emphasized the burden faced by employees due to these high taxes, stating that the current system is unsustainable and detrimental to the workforce.
The protesters are calling for urgent action to address the issue of high taxation on wages and the resulting low standard of living for many Romanians. They argue that if taxes were lowered, they would be able to improve their quality of life and would not be forced to seek better opportunities abroad. The situation has led to around five million Romanians emigrating in search of better salaries and working conditions, further depleting the country’s workforce and economic potential. The trade union’s demands for tax reform and fair labor practices are gaining momentum as more and more Romanians feel the strain of the current system.
The high level of taxation in Romania has created a difficult environment for both employees and employers, with businesses struggling to attract and retain talent due to low wages and high taxes. This has led to a vicious cycle where many skilled workers are leaving the country in search of better opportunities, further exacerbating the labor shortage and hindering economic growth. The government is under increasing pressure to address the concerns raised by the trade union and take steps towards creating a more sustainable and equitable labor market in Romania. By lowering taxes on wages and implementing policies that prioritize workers’ rights and well-being, Romania may be able to reverse the trend of emigration and boost domestic employment rates. It is clear that urgent action is needed to address the root causes of the current crisis and ensure a brighter future for the Romanian workforce.
