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March 23, 2023

Illegal labour, reloaded

Given the lack of a correlative and anticipative behaviour of the authorities, we often witness situations when well-meant measures turn into their contrary. Though they promised to oppose the severe crisis that has hit Romania, authorities end by issuing such disparate measures, poorly correlated with one another, which only make things worse. A conclusive example with this regard consists in the measures taken against illegal labour – the main setback on the labour market. There is a reason why authorities blamed the budget deficit mainly on the failure to tax the illegal labour. We were told that more than 1.7 million people work without legal papers, and their number is steadily increasing.

As a well-intended measure against illegal labour, authorities recently adopted the new Labour Code, advertised as the best tool to expose and fight this phenomenon, even though it has a bigger extent and uses more insidious subterfuges in Romania than in the other countries of the EU. This explains the odd fact that, despite layoffs being made each day, the unemployment rate does not increase in our country. Public finances, too, suffer from this phenomenon, as they are forced to take loan after loan from abroad. As a first measure of the new Labour Code, the government sent the Financial Guard and Police to make thorough verifications and find the employers that use illegal work, and punish them with harsh fines and even prison time – something that was not stipulated by the previous Code.

Indeed, the controls gained momentum and taxes started to pour into the state coffers. However, after a good start, the process slowed down. A first reason for this regression can be identified in another well-intended government measure, which was poorly correlated with the real evolutions of the market: the massive layoffs operated by the Financial Guard and Police. This deprives the two institutions of the personnel necessary to keep a steady pace of controls, so checks are losing both speed and accuracy. Under the pressure of their diminishing numbers, what financial expert or police officer still in service is willing to sacrifice even his own personal security and conduct controls that might be dangerous, when he knows he may lose his job anytime and resort to illegal labour himself? As we can see, fighting illegal labour turns into its contrary and implicitly promotes corruption, as the government’s measure lacks vision and is contradicted by other measures, which in turn lack a complementary and anticipative character.

And there is another reason too, which unfortunately is correlated with illegal labour. It refers to the nature of layoffs. Increasing unemployment is no solution to fight economic crisis, and unemployment may be possible at a critical moment, but layoffs should be made with value in mind. When operating layoffs, one should not look only at figures, but also at the professional quality of the personnel made redundant. However, this basic economic idea is absent from the actions decided by Romanian authorities. Layoffs are made strictly with numbers in mind, and the money thus saved is quickly spent by raising the salaries of the political clientele. At the Romanian Post, the salaries of managers – appointed from the entourage of ruling party leaders – increased, while the company is sinking to the bottom, towards bankruptcy.

To justify the current layoffs, authorities invoke the need to save money to the state budget, and the need for a thorough reform of the state. Though they are logical, these arguments are undermined by illogical interventions of the government. Usually, the budget is balanced less by cutting salaries and sacking personnel, and more by increasing the production and consumption, which generates more cash as taxes and dues. This increase of the output – in terms of both quantity and quality – which requires quality labour, becomes impossible when the most skilled employees are made redundant. The percentage of university graduates and highly trained specialists in the total number of jobless is higher than the representation of these categories in the total population of Romania. With a public system subject to the most obvious political influences, the members of the ruling party keep their jobs – also with ministries – even if they lack basic professional skills.

Contradictory decisions are also present in the way authorities conceive the flexibility of the labour market. It is known that the very notion of flexibility has a bivalent nature, hence it cannot be obtained without a balance between the interests of employers and employees. This kind of balance should favour the equality of chances, with the same rights and obligations for everybody. Any imbalance opens the way to discrimination. If employers have more power than employees, social scales are tipped and the new Labour Code can even encourage illegal labour, in a well-dissimulated form. Working overtime without pay and under the permanent threat of being sacked is similar to illegal labour, regardless of how well this is hidden behind papers. Bringing truth to light requires frequent verifications, conducted by an adequate number of competent specialists – the precise opposite of today’s situation, when the few experts that remain in the Financial Guard and Police live in fear of being sacked anytime.

This kind of contradictory solutions are present in many actions initiated by authorities. This is why their “actions against crisis” actually encourage illegal labour and deepen the crisis in Romania.

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