At the level of 2019, the poverty in Romania was still very deep. The National Strategy on Social Inclusion and Poverty Reduction (2014-2020) shows that one in five Romanians, poverty caused by insufficient income, and much of the poverty caused by low income is persistent. Three quarters of the poor are has been in this situation for at least three years. Also, a third of the population cannot afford to buy products or services considered desirable or even necessary to live a decent life. According to the same document, there are still children who have never been to school, and the percentage of young people without a proper education is high. Many people are inactive or formally unemployed, with little chance of gaining adequate access to the labor market, and that there are inequalities in coverage with basic health services. The largest categories include children in difficult situations, people with disabilities, single or dependent elderly people and the Roma, who number three million people, but the estimated population as poor or vulnerable is about five million people.

Keywords: poverty, income, consumption, minimum consumption basket

The end of February 2020 announced in Romania the first case of illness with the Covid-19 virus, a situation that later triggered the taking of exceptional measures to protect the population, its forced stay at home and the adoption of ten Military Ordinances, the first being implemented with March 18, 2020. The effects of these military ordinances in Romania led to a change in people's mobility (Table 1) as follows: visits to shops and other trips for recreation decreased by over 80%. Travel to shopping and buying medicines from pharmacies have halved. Walking in parks decreased by an average of 60%. The presence in stations and bus stations decreased even more, by about 70%. Employees' travel to jobs fell by 40%. Remaining in the residential space has increased by more than 14%.^1,2

The infection with the Covid-19 virus in Romania had caused on 21.04.2020:

• 85% of deaths were people with comorbidities.

• 1 in 7 infected people was medical staff.

• over 71% of those who died were over 60 years old.

• 64.3% of the victims were men.

The evolution of the cumulative cases of infection and deaths due to COVID-19 infection, on 21.04.2020, in Romania (between February 26 and April 19, 2020) is illustrated in Graph 1

Graph 1 Evolution of cumulative cases and deaths due to COVID-19 infection on 21.04.2020 in Romania.
Source:2

Even without the return of emigrants, at the beginning of 2019, the poverty rate in Romania was 35.7%, given that at the European average, it was 22.5%.³ At the level of 2019, the poverty in Romania was still very deep, about 4.6 million people living at risk of poverty. The highest incidence of poverty is usually among children and young people up to the age of 18, with about a third of them living around the poverty line.

In such a social environment, in Romania, employees sent home in technical unemployment had promises from the Government that they would receive, somewhere at an uncertain date in May (the state of emergency was established on March 16) 75% of the gross salary of framing. And government aid for technically unemployed private sector employees amounted to 75% of the employee's gross salary, but not more than 75% of the average gross salary in the economy.⁴

The rating agency Fitch assessed Romania's outlook negatively, which reflects the substantial worsening of Romania's public finances in the short term, as the outbreak and spread of the COVID-19 pandemic worsen an already deteriorated fiscal position. Although Fitch says in the Report ⁵ that it expects the economy to recover in 2021, uncertainties about the duration of the pandemic, combined with poor fiscal management in recent years, pose significant challenges in consolidating public finances in the medium term: "We forecast that the deficit to rise to 8% of GDP in 2020, reflecting a decline in revenues, as most economic sectors have been affected, and on the expenditure side they will be growing ”. According to the Romanian Government's estimates, the deficit will be 6.7% of GDP.

The rating agency Moody's shows that the structural deterioration of Romania's public finances is exacerbated by the increase in long-term debt, as well as the deterioration of Romania's external position: current expenditure, accompanied by other measures that would positively influence fiscal sustainability (increasing investment expenditure and constantly reducing the current account deficit being mentioned by the Agency).⁵

Dan Schwartz, tax consultant for RSM Romania, part of RSM International, the sixth largest global network of financial consulting firms, said: “The state should, perhaps, find another way to finance companies. A formula that is complementary to those offered by financial institutions, as happened in the previous crisis in the countries most affected by the financial crisis of 2006-2008, where the state became a creditor for the business environment. During this period, the state guarantees loans up to 10 million lei, for small and medium enterprises, ie enterprises with a maximum of 250 employees, a turnover of 50 million euros. When the state acquires shares, it becomes for a period of time a shareholder in a private enterprise. This would be a solution in addition to those offered by banks and other financial institutions. The Government grants the payment of aid, for employees who are technically unemployed, from the budget of the Ministry of Labor⁶ through the National Employment Agency (ANOFM), to companies that are in the following two situations:

• The first situation is that of companies directly affected by "restrictive measures that have been ordered by the authorities in an emergency, such as: hotels, restaurants, cafes, entertainment institutions by suspending activity during the emergency". This includes companies that have totally or partially discontinued their activity, as a direct result of the measures imposed by the authorities.
• The second situation refers to companies indirectly affected by the crisis. They must prove that their turnover has fallen by at least 25% in order to be eligible for technical unemployment benefits.

The latest data from the Ministry of Labor⁷ show that, in February 2020, over 862,000 people were technically unemployed, and another almost 174,000 people had employment contracts. 44.8 million lei (about 9.5 million euros) were paid for almost 170,000 beneficiaries. The counties with the most beneficiaries were Dolj, Buzău and Bacău. When austerity was installed, the population resized its consumption, in the sense of compressing or closing certain types of expenditures.

At the beginning of 2020, the international company Picodi⁸ conducted a study in 54 countries around the world on the minimum wage in the economy and how this income ensures a minimum comfort of life for the population of those countries. The methodology of the study was based on the comparison of the minimum wage rates at the beginning of 2020, with the wage rates in 2019. The countries in which the value of the minimum wage per economy is negotiated by unions, as well as countries where there is no national wage rate set for the minimum wage. Local currencies were calculated according to the average exchange rate in Google Finance in the fourth quarter of 2019. In the ranking of countries with increases in the minimum wage in the economy, Romania ranked 30th out of 54 countries considered. And in 2020 the minimum net salary was higher in Romania by 6.6% compared to 2019 (1,346 lei, respectively 1,263 lei).

In Hungary the minimum net wage increased by 8.1%, in Bulgaria by 8.8%, in Ukraine by 13.2%, in Serbia by 15.5%. Also at the beginning of 2020, the net minimum wage was confronted with the prices of eight staple foods on the market.

In this endeavor, an essential monthly shopping basket was created that contained the following foods: bread, milk, eggs, rice, cheese, meat, fruits and vegetables, products that can cover the daily requirement of nutrients for an adult. The prices of the products that enter this basket, related to the Romanian market, can be seen in Table 2:

The total value of the essential monthly shopping cart containing the eight basic products was 314.88 lei (January 2020), 5.06% more than the total value of the shopping cart in 2019. The shopping cart at the level January 2020 represented 23.4% of the minimum net salary in the economy. The same shopping cart calculated at 2019 prices accounted for 23.7% of the minimum wage in the economy in 2019. How to spend money differs from one family to another, as does the way to perceive well-being.

Picodi compared the prices of the same products in several countries and checked what percentage of the minimum wage an employee would have to spend to meet their basic food needs. In this classification, Romania ranked 25th, below Romania, ranking: Serbia (23.4%), Bulgaria (29.5%), Ukraine (42.1%), the Republic of Moldova (50.1%) (Table 3).

The incomes of the population started to erode since 1991. The critical years for the real value of the average net salary income⁹ were the years: 1993 with 59.9%, 2000 with 60.8%. For the entire period 1993-2003, the average net salary was just over 60% of what could be procured in the reference year, 1989. The anti-crisis policy measure, reducing the value of real wages by 25% and increasing VAT from 19 to 24% in June 2010, affected the average net wage income by bringing it closer to its purchasing power since 2008. one third of public employees, as well as salary revenues from the private sector, led either to the reduction of the employed staff or to the maintenance of the number of employees, but with the decrease of the salaries by 10 to 15% (Graph 2).

Graph 2 Dynamics of the average net salary in October 1989-2018.
Indices of the average net salary per economy, price and graphical indices executed by the author. Source: 9

The real value of the minimum wage income¹⁰ per economy had studied in the time period 1989-2018, a first downward trend. Practically, starting with 1991 it decreased continuously, reaching a maximum level in 1999 and 2000, with 74.2% and 75.6%, respectively (Graph 3). The decrease in this income indicator was influenced by the increase in fuel, energy and water prices, but also by the general increase in the prices of goods and services on the market.

Graph 3 Dynamics of the minimum net salary in October 1989-2018.
Indices of the minimum net salary per economy, price indices and graph executed by the author. Source: 10

In other words, between 1999 and 2000, the purchasing power of a minimum wage was a quarter of what could be bought in 1989. From 1994 to 2002, except in 1999 and 2000, the purchasing power of a minimum wage was purchase of the minimum net wage income and about a third of that of 1989. The situation was quite fluctuating in the next period, and then from 2013 the purchasing power of this income have an increasing trend until 2018, when reached the value of almost 132% compared to 1989.

The Budget and Salary Planning Report, a document compiled by the data service of Willis Towers Watson, a world leader in consulting, brokerage and solutions, conducted a survey in March 2017 on approximately 13,250 respondents from companies in 139 countries. According to this study, Romania will register an average salary increase of 4.5%: "... taking into account the inflation rate forecast at 1.2%, Romania will have a real salary increase of 3.3%".¹¹ Romania's inflation rate is not comparable with similar values ​​in other Eastern European economies: Hungary (0.6%), Bulgaria (1.7%), Austria (0.6%), Czech Republic (0.6%), Croatia (1.4%), Poland (1.4%), Slovakia (1.1%) and Slovenia (0.8%).

The areas with the highest increases in the average net salary were health and education, according to data published by the National Institute of Statistics.¹² The average net earnings increased, at national level, by 446 lei, between February 2018 and February 2019, from 2,487 lei to 2,933 lei.

The largest increases in the average net salary,¹² between February 2018 and February 2019 were registered in: education 879 lei (from 2,402 to 3,281 lei; health and social assistance 878 lei (from 2,787 lei to 3,665 lei); constructions 831 lei (from 1,932 lei to 2,763 lei); other extractive activities 792 lei (from 1,740 lei to 2,532 lei); activities auxiliary to financial intermediation, insurance activities and funds pensions 739 lei (from 3,307 to 4,046 lei).

At the opposite pole were the salaries from the following fields of activity: the manufacture of tobacco products 408 lei (decrease from 4,779 lei to 4,371 lei); air transport 58 lei (from 5,079 lei to 5,137 lei; manufacture of drinks 68 lei (from 2,768 lei to 2,836 lei); manufacture of clothing 157 lei (from 1,571 lei to 1,728 lei) ); manufacture of electrical equipment 146 lei (from 2,422 lei to 2,568 lei).

Employees in the Bucharest - Ilfov region will continue to have the highest average monthly net salary in the next four years estimated at 3,139 lei in 2017, 3,425 lei in 2018, 3,706 lei in 2019 and 3,969 lei in 2020. On the other hand, the lowest net earnings are to be recorded in 2019 in the South-East regions 2,319 lei and in 2020 in South-West Oltenia 2,442 lei. ¹³

The World Health Organization¹⁴ drew attention to the importance of a healthy diet that should contain 70-80% plant-based foods and only 60 grams of meat per day, which is saturated fat; fish, which has better fats, can be eaten in larger quantities. The daily basket could also include: wholemeal flour, bread with bran, cabbage, pork liver, mackerel, telemeau, onion, carrots, potatoes, beets and cornmeal; the daily basket could be diversified with apples, rice, leeks, other animal organs and a greater variety of fish.

The minimum food consumption basket calculated within the Research Institute for Quality of Life¹⁵ is based on the consumption norms established by the nutritionists from the Institute of Hygiene and Public Health. These consumption norms for an adult and professionally active person, who works in average conditions of physical and intellectual effort, amount to 2,700 calories per day. The products needed for daily consumption are: meat and meat products, milk and milk products, oil, vegetables, potatoes, beans, apples, sugar and sweets in small quantities and coffee mentioned in the consumption preferences of adults in our country.

In the midst of the coronavirus pandemic, many of the food products became more expensive. A monitoring carried out by the Competition Council¹⁶ between December 2019 and March 2020 shows that for many products the prices increased by over 2 lei / kg, although in some cases there is no economic motivation.

Salami, fresh tomatoes, milk and apples were the most expensive products in March compared to December 2019. However, there are also products whose prices have fallen, as is the case with corn, onions, eggs or beans. Thus, in the case of white bread of 300 grams, the price had reached 1.92 lei on March 23, after 1.4 lei in December, 1.8 lei in January, and 1.6 lei in February. And regarding the assortment of intermediate bread, of 300 grams, the price increased from 1.44 lei in December to 1.92 lei in March according to the monitoring of the Competition Council.

The price of white potatoes was on March 23 of 2.80 lei / kg, compared to 2.65 lei / kg in December 2019 and 2.73 lei, respectively 2.71 lei / kg in January and February 2020. At present, in Bucharest markets the price of white and red potatoes far exceeded that indicated by the Competition Council, it is now in the cheapest markets between 4 and 4.5 lei / kg. An increase in the price was also observed for cow's milk of 1.5% UHT. On March 23, the price per liter was 4.95 lei, while in December the price was 3.94 lei, in January 4.10 lei, and in February 4.46 lei.

The increase in prices for agro-food products was determined by imports. Romanian producers have lettuce, green onions and radishes, but no one buys them, they throw away. Supermarkets have reduced their demand from domestic producers and prefer to bring in imports. The price of a kilogram of yellow onion on March 23 was 3.06 lei / kg, compared to 3.23 lei / kg in December, 3.09 lei in January and 2.96 lei / kg in February. Until the end of March, this product also suffered a sharp rise in price, the price reaching about 6 lei / kg. Fresh tomatoes also increased in price during this period, reaching an average price of 9.29 lei / kg on March 23, increasing by 2.23 lei compared to December 2019 and by 1.56 lei compared to February. However, both products are imported during this period.

Beans became cheaper, the price reaching 10.67 lei / kg on March 23, from 10.9 lei in December, 13.17 lei / kg in February and 11.55 lei / kg in January 2020. The price of Golden apples had increased from 3.77 lei / kg in December 2019, to 4.77 lei / kg in March 2020.

Another product whose price was monitored by the Competition Council was salami, where price increases were also recorded. It had reached an average price of 28.83 lei / kg in March 2020, after selling in December 2019 with 26.53 lei / kg, with 26.69 lei / kg in January and with 26.77 lei / kg in the month of February. Regarding Victoria salami, the price had reached 29.08 lei / kg, after selling in December with 27.07 lei / kg, in January with 28.56 lei / kg, and in February, with 27.28 lei / kg. In this case, the explanation is that most of the processed pork is imported, and externally prices are rising.

In the case of pork, only the sliced ​​chop registered an increase of 86 bani, from 20.25 lei / kg, in December, to 21.11 lei / kg on March 23. Otherwise, the other varieties registered a slight decrease, but here it must be taken into account that in December it is the highest consumption of the year. And for chicken, only in the upper thighs was found an increase, from 12.40 lei / kg in December, to 12.58 lei / kg on March 23, while other varieties recorded price decreases up to one leu.

Currently, in Romania, a decreasing number of people concentrate in their hands, large financial resources, and the majority of the population lives much less than they should for a decent life. The National Strategy on Social Inclusion and Poverty Reduction (2014-2020) shows that one in five Romanians faces poverty caused by insufficient income, and much of the poverty caused by low income is persistent. Three quarters of the poor are has been in this situation for at least three years [17]. Also, a third of the population cannot afford to buy items considered desirable or even necessary to live a decent life.

According to the same document, there are still children who have never been to school, and the percentage of young people without a proper education is high. Many people are inactive or formally unemployed, with little chance of gaining adequate access to the labor market, and that there are inequalities in coverage with basic health services. The largest categories include children in difficult situations, people with disabilities, single or dependent elderly people and the Roma, who number three million people, but the estimated population as poor or vulnerable is about five million people.

The consumer basket for families with school-age children is an important indicator for shaping social policies and assessing the quality of life of these families. It would also explain the vulnerability and social risk to which this segment of the population is exposed. In the following we analyze the situation of a family composed of two adult employees with two school children, from the urban environment, when the parents' salary incomes suffered a reduction following the decision to force the population to stay at home and the entry of a large part of employees from labor market, technically unemployed.

Taking into account 75% of the value of the average wage per economy or the minimum wage (Table 4 & 5), in the case of employees with parental status and allowances of dependent children we have a real picture of the income of these families facing the prices of goods food, non-food and services, which are purchased in March 2020.

The family of two adults with two dependent children in urban areas (Table 4) with an income consisting of two average salaries calculated at 75% of their value due to technical unemployment and two child allowances,¹⁸ in March 2020, which is reported the minimum decent and subsistence basket calculated for the respective family of two active adults with two school children (Graph 4) is still in a comfortable economic situation, covering 96% of the minimum decent basket (196.2%) and more twice the minimum subsistence basket (243.7%).

Graph 4 The dynamics of the purchasing power of two average net salaries plus two child allowances in relation to the minimum decent basket (MD) and the minimum subsistence basket (MS), in the urban environment, in the period 1989-2020.
Source: 18

If we take into account (Table 4) two minimum wages of 75% of their value, as a result of technical unemployment plus two child allowances,¹⁸ in March 2020 (Graph 5) and relate to the decent minimum basket and subsistence calculated for the family of two adults with two dependent children, the situation worsens. The minimum decent basket is not covered, leaving a percentage of 10% as a deficit, and the minimum subsistence basket (112%) is exceeded by 12%.

Graph 5 Dynamics of purchasing power of two net minimum wages plus two child allowances in relation to the minimum decent basket (MD) and the minimum subsistence basket (MS), in the urban environment, in the period 1989-2020.
Source: 18

The family composed of an employee parent with two school-age children in maintenance in the urban area (Table 5), in March 2020, having an income consisting of an average salary calculated at 75% of its value due to the technical unemployment at which two child allowances are added¹⁹ and which relate to the minimum decent and subsistence basket calculated for the family in question are placed in a relatively good economic situation covering with 46% the minimum decent basket (146.7%) and 82% on the subsistence one (182.3%).

For the same family in which we consider a minimum wage of 75% of its value plus two child allowances (Table 5) compared to the minimum decent and subsistence basket calculated for an employee with two school-age children,¹⁹ the result is not shows a worsening of the family's situation; the minimum decent basket is covered in a percentage of 72%, remaining a deficit to be covered of 28%; if we take into account the minimum subsistence basket, it is covered only in proportion of 89%.

Disposable household incomes caused by the decrease of the salary incomes to 75% of the employment salary and not more than 75% of the average gross salary per economy, in the period February-March 2020 start to decrease in relation to food, non-food and food expenditures. services that families must do in order to meet consumer needs.

These differences in the purchasing power of income, whether minimal or average, show a great variety and differentiation between the levels of economic development of some countries, compared to others, on the European continent and, of course, these levels practically reflect the quality of life they have. they have the citizens of the respective countries, but which are really enjoyed by very few European citizens, especially those from the countries that later joined this administrative structure.

None.

The author declares no conflicts of interest.

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18. The absolute values ​​of the average salary, from the Statistical Yearbooks of Romania 1990-2018, the allowances of two children, website of the Ministry of Labor, Family, Social Protection and the Elderly. The values ​​of the minimum consumption baskets for the family of two employees with two dependent children for the decent minimum and the subsistence minimum calculated by Phd. Gheorghe Barbu in the period 1990-1999, then by Phd. Adina Mihăilescu in the period 2000-2018. Index calculation and graphical execution of Phd. Adina Mihailescu.
19. Absolute values ​​of the minimum wage and allowances for two children, website of the Ministry of Labor, Family, Social Protection and the Elderly. The values ​​of the minimum consumption baskets for the family of two employees with two dependent children for the decent minimum and the subsistence minimum calculated by Phd. Gheorghe Barbu in the period 1990-1999, then by Phd. Adina Mihăilescu in the period 2000-2018. Index calculation and graphical execution of Phd. Adina Mihailescu.