Between 1994 and 1998, Romania's labor force has fallen from 10 million to 8.8 million. Part of the drop came from growing unemployment. But even more people simply fell out of the labor force by taking early retirement or invalid benefits. Agriculture has also soaked up a huge proportion of the spare labor force as industrial firms collapsed and land was restored to its owners. In 1990, agriculture used to account for 28 percent of the workforce. It now accounts for 42 percent.
Working conditions are regulated by various laws, most importantly the Labor Code of 1991. It sets a working week of 40 hours per week, and paid holidays of 18-24 days a year. It also stipulates redundancy payments and higher pay for workers in dangerous sectors. Nevertheless, workers still complain that working conditions are worsening in Romania. Wages have been slow to recover from a slump in 1997, when they fell 22.6 percent in real terms. And accidents at work are still one of the biggest causes of death for men aged 30 to 50.
The bargaining power of Romanian workers is limited in most sectors, thanks to the weak economy. The huge unions of the communist era have collapsed as the country turned to democracy, and their successors are far weaker. Unions and strikes are both allowed under the 1991 law, but workers complain that there are restrictions on their activity. Politicized sectors, like the miners, have frequently held large street protests. But these have often had political aims rather than pushing for improvements to working conditions.
The current leftist government views relations with the unions as key to its ability to govern the country. That is why it formed a social pact with unions and employers in February 2001. The unions have agreed that wage increases should keep pace with productivity in order to make the country's exports competitive. In return, the government has promised to keep unemployment below 10 percent, improve workplace safety, reduce the grey economy, and stop appointing political managers to state-owned firms.