​In recent months, National Bank economists have warned about inflationary pressure in the labor market, which is showing signs of overheating. Employers complain about the labor shortage in the labor market and find it difficult to find workers. Why is the labor market so tough?

The employment plans of Romanian firms indicate that the economy remains stable for now. The total supply of the labor force (people who have or are looking for work) has returned to pre-pandemic levels, but, conversely, the demand for the labor force (the working population plus vacancies) has increased by several tens of thousands of jobs.

This excess demand also contributed to nominal wage growth, apart from political decisions based solely on electoral criteria. The economic slowdown we are already seeing should help rebalance.

The biggest deficit, however, comes from the fact that we have an increasingly aging population. Aging is causing the share of the elderly (aged 65 and over in the rural population) to rise from just over 15% to nearly 20% over the past 10 years. In addition, many people on the verge of retirement have left the “workforce”. » with the corona pandemic.

How it will be in the next 7-10 years

Although many jobs will be lost in some sectors, we will have 300,000 more workers in the public sector, according to a study by Professor Cătălin Ghinăru.

Non-competitive sectors of activity (public administration and defense, education, health care and social assistance) represent a total of 1,238,000 employed persons at the level of 2020, or 14.1% of the total employed population.

On the horizon of 2030, the increase should amount to 299 thousand people, or in the percentage ratio by 2020, 24.1% (per year, on average, 29.9 thousand people; in 2025, these industries should provide work for 1.367 million people or growth compared to 2020 by 10%). , the increase between 2025 and 2030 will be 12.4%). Substantial growth that exceeds overall employment growth. In other words, employment growth in the uncompetitive sector is almost 3 times higher than the expected total employment growth for the national economy as a whole.

Another problem is the aging of the population

The aging and shrinking active population has been compensated by immigrants, who we see every day on bicycles or scooters in the center of the capital.

The pandemic has brought another phenomenon, albeit a minor one here: the quiet layoff or “silent resignation,” where young people reduce the intensity of their work. But most of the “quiet” quitters are high-income workers, while the largest labor shortages have been in the core occupations. This points to another factor: disease.

In 2022, on average, 90% of elderly Romanians attributed their health condition to the fact that at least one of their daily activities was affected. 15% more than before the pandemic, another INS study shows

And the worst news is that the baby boomers will soon retire

When you talk about the labor force, in most cases you mean employed Romanians plus unemployed people looking for work. That’s right, the labor force doesn’t include the unemployed who aren’t looking for work (like stay-at-home moms, retirees, or students). Discouraged workers who would like to get a job but have given up looking are also not included in the labor force. To be considered for the workforce, you must be available, willing to work, and recently looking for work.

The distribution of labor resources by development regions shows that:

• The North-East region provides 16.6% of Romania’s labor resources

• The southern region – Muntenia has 14.4% of the country’s labor resources

• 13.2% of the country’s labor resources and 13.5% of the population of working age (1583.5 thousand people) are concentrated in the North-Western region.

• The highest share of people employed in agricultural activities (16.9% and 16.8%) was recorded in South-Western Oltenia and North-Eastern regions.

• Industry and construction concentrate 39.0% of the employed population in the central region, 36.5% in the northwestern region, 36.3% in the western region, and 36.0% in the southern region of Muntenia

• More than 50.0% of the employed from almost all regions, with the exception of Southern Muntenia and South-Western Oltenia, worked in the service sector.

• The highest share of the civilian population employed in the service sector was recorded in the Bucharest – Ilfov region (73.5%)

• As of January 1, 2023, the majority of the employed population is made up of workers in the regions of Bucharest – Ilfov (86.0%), West (73.5%) and Center (71.7%).

• The smallest shares were recorded in the regions of South-Western Oltenia (64.2%), North-East (64.5%) and South – Muntenia (64.7%).

• Self-employed workers and unpaid family workers accounted for an important share of the civilian employed population in North-East (26.2%, respectively 7.1%), South Muntenia (27.0%, respectively 6.3%) and South-West Oltenia (26 .0%, respectively 7.3%).

• At the end of 2022, the Northeast region accounted for 18.1% of the total number of registered unemployed, followed by the Southwest region of Oltenia (16.7%), South Muntenia with 15.9% and the Southeast region with 14, 9% The lowest shares were recorded in the western regions (5.6%) with 13.5 thousand unemployed and Bucharest – Ilfov (5.7%) with 13.7 thousand unemployed.

Photo Source: Pramote Polyamate | Dreamstime.com