SOCOL CRISTIAN| MARINAS MARIUS MINIMUM WAGE AS A PUBLIC POLICY INSTRUMENT – PROS AND CONS As regards the comparison to other EU/non-EU countries, while until 2014 Romania was in the lower half of the rankings, with a minimum wage of 35% of the average one(Figure 10), in May 2016 it will make it to the upper half, with a 44% level that is consistent with the need to reduce economic inequalities, poverty and economic deprivation and to boost work efficiency. 5. Was the increase of the minimum wage correlated with the rise in productivity? The share of the minimum in the gross average wage at national level had two inflection points in the analyzed period(2000-2016), as shown in Figure 11. Thus, the percentages of increase in the minimum wage were high in the first three years(122% in 2000, 40% in 2001, and 42% in 2003), starting from a very low level, which resulted in a minimum wage of around 40% of the average one in Q1 2003. From 2004, the minimum wage was rather correlated to the evolution of inflation than to the economic growth and income expansion, so that in Q4 2007 it only amounted to about one quarter of the average one. The evolution differed from the average one in the countries of the region, where the minimum wage was above 40% of the average one. The option of the authorities in Romania for a slow increase of the minimum wage may seem surprising, considering that expansive taxation measures(flat tax and a reduction in social welfare contribution) were introduced to diminish the wage costs of companies. Moreover, the economic growth in 2004-2007 could have easily outweighed the impact of stabilization of the minimum wage at about 40% of the average one. The around 40% year-on-year increase of the minimum wage in 2008 stabilized it at 30-32% of the average wage during the economic crisis, a percentage similar to those in other EU countries, such as the Czech Republic and Estonia, but at least 5% below the ones in Bulgaria, Hungary, Latvia, Lithuania, Slovenia and Poland. Since 2013, seven successive minimum wage increases have been applied in connection with tax reductions and economic recovery. The share of the minimum wage in the average one rose from 2013 to 2016 at a high rate compared to the economies in the region, but the level reached(41.3% in Q1 2016 and 44% in May 2016) is below the one in Poland, Slovenia, Hungary, Latvia and Lithuania. In fact, according to IMF (2016b), the mean percentage of the minimum wage in the average one is approx. 46% in the CESEE countries. Figure 11. Evolution of the minimum wage in relation to the average one 44.0% 42.0% 40.0% 38.0% 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 20.0% 22.8% 39.7% 24.8% 41.3% 41.3% 2000.q1 2000.q3 2001.q1 2001.q3 2002.q1 2002.q3 2003.q1 2003.q3 2004.q1 2004.q3 2005.q1 2005.q3 2006.q1 2006.q3 2007.q1 2007.q3 2008.q1 2008.q3 2009.q1 2009.q3 2010.q1 2010.q3 2011.q1 2011.q3 2012.q1 2012.q3 2013.q1 2013.q3 2014.q1 2014.q3 2015.q1 2015.q3 2016.q1 20