IMF believes a possible minimum wage increase would have negative effects

IMF representatives on Wednesday morning talked with Labour Ministry officials, with the head of the IMF mission to Romania, Jeffrey Franks, stating a possible minimum wage hike needs to be assessed, as it may have negative effects over the economy.

“Raising the minimum wage may dampen hiring and you must be very cautious in taking such a decision,” said Franks after a meeting with the Labour Minister Ioan Botiș.
The chairman of the National SME Council (CNIMPP), Ovidiu Nicolescu, had previously stated no raise in the minimum wage was necessary amid the current crisis situation, since such a move would make at least another 50,000 companies bankrupt.
According to him, the issue of raising the minimum wage can be brought up only after the country exits the crisis, in one year.
“Any wage increase must be correlated with a rising labour productivity, and labour productivity has not increased”.