OECD experts Denis Drechsler and Theodora Xenogiani said that the illegal labor segment reflects the distrust Romanians have for their state institutions. “Reforms can solve many problems, but these do not take the place of trust. Black market labor in Romania represents the lack of trust in public institutions, the negative perception of the state’s role, and poor understanding of benefits deriving from social contributions,” added Drechsler and Xenogiani. “More than half of the jobs in Romania are not included in labor legislation. Employees are often deprived of access to social security and other benefits, while untaxed wages, paid in an envelope, are a common practice,” according to the OECD experts.
They recommend adopting more innovative policies, such as information campaigns which could change people’s opinions.
The OECD report goes on to say that employers manage to avoid paying taxes and fees because of insufficient mechanisms to punish tax evasion.
