DEVELOPMENT AND CORRELATION OF THE GROSS WAGE WITH INFLATION

Madalina-Gabriela Anghel, Maria Mirea and Cristian Olteanu
Additional contact information
Madalina-Gabriela Anghel: „Artifex” University of Bucharest
Maria Mirea: Bucharest University of Economic Studies
Cristian Olteanu: Bucharest University of Economic Studies

Romanian Statistical Review Supplement, 2018, vol. 66, issue 2, 29-38

Abstract: In this article, the authors proposed to analyze the degree of satisfaction of the employees according to the gross income achieved, but also in line with the effect of inflation. This study is also based on the fact that the current national administration (the government) is currently preparing comprehensive wage legislation.Of course, wages remain the main source of income for people working in economic activities, as well as their families. From this point of view, the analysis of the real earning index becomes even more important because besides the gross salary is the question of knowing the actual salary adjusted to the inflation rate. The real earning index is, in fact, the most important to characterize the income resources available to the country’s population, how it manages to meet its living needs.In the study, we aimed to compare consumer prices, ie the evolution of inflation, with the average net earnings index, not gross. From this, we conclude that the consumer price index, through the value-added tax reduction policy from 24% to 19%, had an approximately linear course, which did not affect the level of the nominal net salary too much. On the other hand, in the new law that came into force on 1 January 2018, a number of elements have emerged that may lead to instability in assessing the evolution of real net employee incomes. In this respect, we mention that if for the minimum wage the Ordinance stipulates imperative the increase to 1900 lei, regarding the transfer of the tax obligations from the employer to the employee, the imperfection of this article gives the possibility to interpret that, where there is no policy but it is a private sector, there may be negotiations that can have two effects: on the one hand if some employees want to lose their jobs, not accepting what the employer proposes, and in some cases some wages, under the pressure of maintaining the job.The purpose of this article is to analyze gross and net salary in relation to inflation and with some indication of how regulations in the new wage law can bring some effects. Importantly, it is imperative for Romania to increase the net average gross salary, but this should have a reflection on raising the real salary, especially since 2017, by flattening prices (administratively deflated), the effect of inflation will have a negative influence on actual income.

Keywords: real wage; income; deflation; price index; correlation (search for similar items in EconPapers)
JEL-codes: E24 J31 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.revistadestatistica.ro/supliment/wp-con ... SS_02_2018_A2_EN.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rsr:supplm:v:66:y:2018:i:2:p:29-38

Access Statistics for this article

More articles in Romanian Statistical Review Supplement from Romanian Statistical Review Contact information at EDIRC.
Bibliographic data for series maintained by Adrian Visoiu ().