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Newest (and poorest) members of the EU, Bulgaria and Romania, post 15% and 11% compensation gains,

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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 08:01 AM
Original message
Newest (and poorest) members of the EU, Bulgaria and Romania, post 15% and 11% compensation gains,
respectively, for the 12 months ending in June 2009. For the whole 27 country EU the gain was 3.7%.

It is nice to see the EU bring in two countries (in 2007) that are poorer than Mexico and with the result of tremendous economic progress in those new members and continued wage gains (3.7%) in the wealthier old EU members.

http://www.sofiaecho.com/2009/09/15/784998_increase-in-...

"Bulgarian labour costs increased at the most rapid rate in the European Union, according to EU statistical office Eurostat, comparing figures for the second quarter of 2009 with Q2 2008."

"The figures were released by Eurostat on September 15 2009. Separate statistics have shown that salaries and wages in Bulgaria are among the lowest, if not the lowest, in the EU." -- Sounds like Bulgaria and Romania still have a long way to go to catch up to the rest of Europe, but they're headed in the right direction.

"According to Eurostat, total hourly labour costs in the euro area, the 16 countries using the common European currency, increased by four per cent in nominal terms in the year up to the second quarter of 2009, compared with 3.6 per cent for the previous quarter.

Across the 27 member states of the EU, the annual increase was 3.7 per cent up to the second quarter of 2009, compared with 1.3 per cent for the previous quarter." -- I doubt that the US had any increase at all in labor compensation from June 2008 to June 2009.
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izquierdista Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 08:10 AM
Response to Original message
1. Poorer than Mexico
I would have to argue that point. While GNP data may indicate that they are poorer, the Gini index would give you a different picture -- the wealth they do have is spread around more. In my travels through all three countries, I observed Romanians and Bulgarians living better than the average Mexican. That is because Mexico has great wealth disparities, with one of the world's richest, Carlos Slim, holding a huge chunk of Mexico's assets, while in Romania and Bulgaria their long experience with socialism and communism has left a more equal playing field.
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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 08:33 AM
Response to Reply #1
2. That's a good point. Mexico's per capita income is about 15% higher, but the unequal distribution
is much higher. Mexico's Gini index is 46.1 (which is really bad as it signifies high levels of unequal distribution of income/wealth). Sadly Mexico's Gini index is almost exactly the same as the US'.

The Gini index of Bulargia (29.2) and Romania (31) are almost the same as the rest of the EU (31) so I'm not sure how much the history of socialism and communism has to do with it, as much as a progressive European sense that we are all in this together.

While Mexico is "richer" in absolute per capita GDP ($14,560), the better distribution of income makes up for this in the new EU members ($12,341 and $12,579) . I do give credit to the "old" EU ($36,812) for admitting new members which were significantly poorer than they were and am glad that the result was greater prosperity for the poorer new members while maintaining labor compensation growth in the "older" member countries at the same time.
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izquierdista Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 09:23 AM
Response to Reply #2
3. Effect of socialists
Socialism and communism definitely had an influence. In Eastern Europe, Communists were in power for about 40 years; coincidentally, the countries with low Gini numbers (Slovakia, Czech Republic) are in that group. As you point out, Western Europe also has some low Ginis, but they have had many Communist and Socialist voices active in their governments, unlike in the US. The ones where the leaders railed against socialism (UK under Thatcher) have the highest Gini (UK at 34) and places that embraced socialism like Scandinavia have the lowest (Sweden at 23, lowest in the world).
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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 10:00 AM
Response to Reply #3
4. Maybe it's a "chicken and egg" thing.
Are countries with a more egalitarian culture more likely to support socialist voices and parties or are the socialists responsible for the egalitarian culture? At least, socialist movements and egalitarian cultures reinforce each other.
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CBR Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 10:10 AM
Response to Original message
5. Interesting. My colleague is in Romania now doing
her dissertation research on corruption in the legal system with an emphasis on the post-soviet transfer.
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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 11:23 AM
Response to Reply #5
6. I believe that "rule of law" and corruption issues were among the things that Romania had to resolve
before it was admitted to the EU. It would be interesting to hear how the "rule of law" and legal system in general adapted to the post-soviet world.
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