Social Minima and the Guaranteed Minimum Income Program in Romania, 1995-2024

Abstract The present paper provides a qualitative historical analysis of the evolution of the Guaranteed Minimum Income (GMI) program in Romania between 1995 and 2024 in relation to envisaged social minima. It argues that the transformations of GMI reflect the interplay between demand for cheap labour, regulations over precarious employment, and behavioural control for allegedly securing the “employability” of beneficiaries, with little (if any) concern for benefit adequacy. As elsewhere in Europe, labour market dualization was accompanied by the possibility to cumulate income from precarious labour with social assistance benefits. For the active-age recipients, GMI benefits did not replace market income and guarantee a social minimum, but rather they compensated for low income from casual work with some minimal social transfers and subsidies. Importantly, GMI included public health insurance, without charging beneficiaries. The decrease of GMI in real terms during the last two decades was accelerated by the effective decoupling of social assistance benefits from the national minimum wage and the long-term abandonment of a reference-budget for goods and services that could have served as a benchmark for both. When such a minimum basket was finally reintroduced in 2020 as a policy instrument for the annual indexation of the national minimum wage, social benefits were excluded from its scope. The reform of GMI, designed in 2016 but implemented only in 2024, slightly simplified the bureaucratic load and increased the threshold for social aid, but it did not substantively alter eligibility rules and mechanisms of behavioural control. To date, there has been no relation between the value of GMI and the computations of social minima.