Annals of the University of Oradea: Economic Science (Jul 2018)
THE ROMANIAN LABOUR MARKET ASSESSMENT AND CHALLENGES TO JOIN THE EURO AREA
Abstract
In this article, we are assessing how prepared is the Romanian labour market so far in the context of joining the Euro Area, by proposing as tool the labour market flexibility (LMF) meant by its definition, to absorb the economic imbalances. Among the determinants of the LMF considered in our analyse are the demo-economic structures, the employment rate, the unemployment rate, the wage flexibility, the working time and employment period, the geographic mobility, etc. The analytical approach is structured on studying the distinct features of the Romanian labour market compared to the other EU Member States in general and those in the Euro Area in particular that can induce different responses to the various adjustment levers in Romania, compared to the other states. The results our research highlight that there still are gaps between Romania and the other EU28 Member States, and therefore, reducing these gaps requires the promotion of measures / programs to stimulate investment in technology, as well as measures to protect the redundant workforce resulting from these investments and, implicitly, specific strategies and the ability to support the costs attached to them. Since Romania is no longer competitive in terms of the availability of adequate workforce, this in a wider context of the new challenges faced by the Romanian economy, with potential significant impact on labour demand architecture (digitization, industry 4.0, environmental compliance and sustainable development requirements, energy paradigm changes, etc.), which support the need to estimate the demand for labour and its quantitative and structural-qualitative characteristics, as well as strategies adopted by the state and companies to provide the necessary labour force. Therefore, a responsible wage setting policy is needed to ensure that overall wage dynamics are attuned to productivity developments and reflect prevailing conditions on the labour market, while the public administration and the private sector need to work closely together to improve the Romanian labour market before it becomes a major impediment to further economic development.
