An entrepreneur's worries

An employer who loses, in less than a year, the people he has painstakingly trained tells us more about Romania’s economy than many national strategies.

A very close friend, an entrepreneur and CEO of a solid company specializing in construction, electrical installations, and photovoltaics, has been complaining for years about the same thing: he cannot find qualified electricians. And when, with his own effort and resources, he trains them himself, he loses them within at most a year. Some may leave for multinationals, others for state institutions and companies, attracted by a secure and much more comfortable income; others simply leave the country.

I have heard the story often enough not to see it merely as an employer’s complaint. It is a genuine macroeconomic indicator, except that it appears in no statistics. The energy transition, the modernization of networks, efficient buildings: all pass through the hands of people the national economy needs but does not have.

The cause can no longer be swept under the rug. On September 8, 2026, the results of PISA 2025 were published, showing declines in all three basic competencies. More than half of 15-year-old students, 52%, do not reach the minimum level in mathematics. In reading, 48% remain below the basic threshold. In science, almost 46% of students perform poorly, compared with approximately 26%, the OECD average. More than a third, 38.5%, are below the basic level in all three domains, almost twice the OECD average, and Romania ranks second to last in the EU, ahead of Bulgaria and Cyprus. A child who, at 15, does not master proportions and a text of medium difficulty will, a decade from now, be either the technician who installs and maintains a photovoltaic park or—more sadly—a person left outside the skilled labor market. No economy can import indefinitely what its own schools do not produce.

Still, it would be too convenient to write only about schools—actually, about the lack of education in an economy that also suffers from a lack of development. In fact, my friend’s story has three layers. The first is the supply of skills, which the education system feeds poorly. The second is a classic problem in the economics of training: the company that qualifies a person has no guarantee that it will retain them, and those who cannot retain what they train eventually train less. The third is more uncomfortable: in the market for scarce skills, the state is both the defective producer and the competitor that, through unnatural competition, attracts what remains. Education is a necessary condition for development, but not a sufficient one. Without a coherent industrial policy aligned with the demands of the future, without competitive salaries and an environment in which those trained here can find a place, whoever can leave will leave. But without education, there is not even anything left to retain.

We were not short of warnings; we were short of pragmatic, wise judgment, as well as properly allocated funds and, above all, continuity. Romania spends around 3% of GDP on education, the least in the EU, compared with approximately 4.7%, the European average. Estonia, frequently cited as an example because of its schools, devotes 14.5% of public expenditure to education, while Romania devotes only 8.2%. The 2011 Education Law promised 6% of GDP. The percentage was never implemented, being postponed year after year through emergency ordinance. The 2023 law replaced it with a target of 15% of the general consolidated budget, and in 2026 education still receives approximately 3% of GDP.

The results can be seen in every column. Only 23.2% of young people aged 25–34 have higher education, compared with the EU average of 44.1%. Early school leaving, at 15.5% in 2025, is the highest in the Union, where the average is 9.1%. Research and development expenditure represents 0.46% of GDP, compared with 2.24% in the EU. The public research budget is 19 euros per inhabitant, compared with almost 285 in the EU.

For the economy, the consequence is direct. An investor goes where they can find what they do not have at home. If we offer mostly cheap labor, they will bring tasks for cheap labor, while the added value will remain elsewhere. This is not a reproach; it is accounting: in 2024, the income of foreign investors in Romania amounted to almost 11 billion euros, of which nearly a third was reinvested, while the rest, 6.6 billion, was distributed as dividends. That is how capital works. The question is how much of the value chain remains here. A well-placed stall sells what others have designed and manufactured; a workshop designs and manufactures. The difference between them is called training.

My friend’s second complaint seems to be about something else, but it is the same story. His employees do not understand what their real gross income means. Not out of bad faith: no one has taught them. At the rates in 2026, 25% CAS, 10% CASS, and 10% tax on the remaining base are withheld from gross pay, while the employer pays an additional 2.25% CAM on top of gross pay. According to my calculations, out of every 100 lei an employee costs them, about 57 reaches the employee’s hands, while the remaining approximately 43 goes to the state. A person who does not know what they pay cannot judge what they receive in return. And the state, as many taxpayers perceive it, makes little effort either to explain or to deliver services—in schools, hospitals, and roads—commensurate with the money collected. When people do not see their money in public services, tax becomes, in their eyes, confiscation rather than a price. And what is perceived as unfair is avoided or, eventually, left behind.

So what are we left to do? Three things, all measurable. First: mathematics and functional reading in primary school, with public targets and a checkpoint at PISA 2028. Second: vocational dual education rebuilt together with employers, and a sectoral training fund that shares the cost, so that the company providing training is not penalized by the one doing the recruiting. Third: economic, financial, and tax education in high school, and a payslip showing the total cost of labor, not just net pay. And behind all of them, a rule for the education budget that is respected, not postponed.

My friend will continue training electricians. The question for Romania is whether it will continue training them for others.