Alexandru Bădăru
The paradox lies “in the unexpected and unpublicized redistributive effect”: as a result of changes in tax and contribution rates, the salaries of public sector employees—particularly “administrators” and “security personnel”—will increase, while those of the average agricultural worker will decrease.
This is shown by calculations conducted by Alexandru Bădăru, former director of Forța Fermierilor and an expert in economic policy.
In 2027, as a result of changes in income tax rates and contributions to social and health insurance funds, the monthly net salary of agricultural workers (taking into account the personal exemption) will decrease by 228–860 lei, averaging 361 lei. (The calculation was based on the projected 2027 gross minimum wage in agriculture of 7,400 lei, the maximum of 29,500 lei, and an average of 12,000 lei per month).
By comparison, according to calculations by Alexandru Bădăru, the projected increase in monthly net wages for certain categories of civil servants (“managers,” “law enforcement officers,” and others) will amount to 850–2,770 lei, with an average of 1,962 lei. (The calculation was based on the projected 2027 gross minimum wage for public sector employees in these categories of 8,757 lei, the maximum of 34,750 lei, and the average at 23,814 lei per month).
Taxes Will Widen the Wage Gap
According to the expert’s findings, the significant difference in the projected change in salaries stems from the fact that, compared to the situation in 2026, for certain categories of civil servants in 2027—thanks to the Ministry of Finance’s proposal— the tax and contribution rates will be significantly reduced. Specifically, social security contributions will drop from 39% and 29% to 21%.
“Although Finance Minister Gavriliță stated that the proposed changes regarding payroll taxes will not affect either employees or employers, my calculations show that this statement is incorrect. First and foremost, this applies to the category of workers with the lowest wages and the highest risk of poverty.
In agriculture, the majority of workers are men, as women in rural areas have few opportunities to find employment. As a result, in rural households, often only one spouse earns a salary.
At the same time, changes in wages in the context of tax reform must be assessed by taking into account the expected increase in VAT and, consequently, household expenditures on virtually the entire range of goods and services.
Given this very important factor, a hypothetical rural couple’s budget will lose not 361 lei per month (due to the decrease in the average wage), but approximately 540–660 lei per month (due to the rise in prices for goods and services caused by the VAT increase).
Most likely, this amount will actually be significantly higher than the estimated range. In other words, we can safely predict a decline in the purchasing power of those employed in agriculture by at least 8–12% compared to the current situation.
At the same time, it is worth remembering that the absolute poverty rate currently stands at 42.9%.
“At the government level, it is necessary to address the worsening wage disparity between the public and private sectors, especially in agriculture, without compromising the goal of increasing state budget revenues,” – concludes Alexandru Bădăreau.
