The officially announced figures are stunning : 35% of the workforce – about 280,000 folk – are unwaged and looking out for a job. Each 1.43 worker support one underemployed person. In the USA the figure's 3.3 to four staff supporting all of the underemployed AND all the pensioners! The reality is less ominous. Many employed folks in Macedonia go unreported. Their bosses incline not to report them as employed in order to avoid having to pay social benefits and retirement benefits to the state. This considerably warps the official figures – yet, it'd be safe to say that the rate of unemployment in Macedonia is close to twenty p.c.. Unemployment has only bad aspects.
A certain level of unemployment is thought to be healthy. Folks move between workplaces – this is named labour mobility. People desert old professions for new ones, coaching themselves to grab higher paid, further education positions. This kind of healthy unemployment is named “friction unemployment”. A quantity of three percent to 6% is considered to be friction unemployment in the West (relying in which country). But the sort of unemployment that is abundant in Macedonia is not of this type.
It is permanent in that the same people are unwaged steadily for at least a year. It is habit – forming : people lose their self grace, they become conditional upon outside assistance, they are afraid to face fact. Such unemployment has grave psychological consequences. People change under its influence to such an extent that they no longer qualify as workers. This impacts on the situation within families.
Folk who used to make provision for their families are cast aside as no products, losers with no prospects for the future. This deeply and negatively affects the fabric of society’s basic unit : the family. But unemployment also has a great macroeconomic impact. The State doles out millions of DM each month to pay unemployment benefits. Rather than putting this money to productive use – it is spent on keeping people idle at home on an allowance which is not even enough for bare subsistence. No one is happy : the Government – because its budget is overly and unnecessarily inflated, the country – because decent money is therefore spent rather than being invested and the underemployed – because they can hardly survive on what the state gives them.
Unemployment is not totally unique to economies in transition. Even much stronger economies – like France‘s and Spain’s – suffer from it. Spain’s real jobless rate has similarities to Macedonia’s. What are the long run, structural causes for unemployment? There are more hypotheses than there are underemployed people. Some say that free trade encourages unemployment of inexperienced and semi-skilled labour.
Factories move overseas to places where labour is cheaper . Cheap imports of textiles and basic electronic wares compete with the local production and – often – wound it badly. Others blame labour market rigidities. If the psychology of employees and companies alike is that of “one big family” where no one is fired even in difficult times and even if he is amateurish. If the rules and regulations of the state are in favour of a static workforce. If social benefits (yearly holiday, sick pay, child support) increase the costs of employing – unemployment will be created. Bosses will not hire further staff in times of economic boom – because they may not be able to fire them in time of crisis.
They will prefer to manufacture in places where labour costs are debatable and low. Where trade unions have been abolished (Britain and the United States are the prime examples) – unemployment all but vanished. Yet others stress the technological revolution (mainly in the fields of informatics). So many professions become outdated at such a quick pace – and so many professions are revolutionised so frequently – that more roles are lost than created. But no matter what the reasons are for unemployment – certain states are fighting this cancer of society in creative tactics. During the 1990’s, Israel – a country with 4,500,000 million folk and 20,700 square kilometres – soaked up an inrush of more than six hundred thousand immigrants (=15% of the populace), mainly from the previous USSR.
One could expect an astounding increase in unemployment. If Macedonia were to take in three hundred thousand extra immigrants (=15% of its population) tomorrow – its jobless rate would have skyrocketed until the new entrants would be absorbed by the marketplace. Not only did Israel succeed in providing the majority of this deluge of immigrants with roles – it also reduced the overall rate of unemployment among its old population! How did it succeed in doing the incomprehensible? Israel made a decision to give the unemployment benefits to the employer – not to the unemployed. The Government came to the employer with the following proposal : Find work for the jobless person. The jobless person – because he finally discovered work with a real chance to continue to be employed in the future if he actually contributed to the business that he was employed in. The Govt was content – because it did not increase its budgetary outlays and spending.
Yet, simultaneously it has increased the level of work in the economy. Another Israeli twist : the Government also paid part of the social benefits of the person that was previously unwaged in his first 3 years of work. This saved the employer a lot of money and encouraged him to use and to report the employed person to the authorities. A complete different approach was experimented with in Great Britain. All those jobless in a particular geographic region were assembled into a “Community”. The Community included a great range of professions : carpenters and tailors, electricians and farm hands, gardeners and teachers.
A computerized centre was set up. Each jobless person registered with this centre, listing both his professional capacities – and services and goods that he had an interest in, but did not have the money to purchase . A matching process then ensued : the tailor was looking for a teacher to give his kids some one-on-one tuition (which he couldn't afford in his current financial straits). The teacher was looking out for a tailor to saw a communion dress for her child.
Therefore the computer matched them up : The teacher tutored the tailor’s kids – in return for his services in sawing the dress for her child. Both of them were therefore employed, recovering their sense of self-worth and dignity. Moreover, both of them were able to afford things which were really needed by them but which they could afford under no different circumstances.
This is a return to primordial, pre-monetary, barter economy. But who will decide how many private tuition supplied by the teacher – are worth one dress sawed by the tailor? A special price list was published. It reflected the conditions which overcame in the “real” market-place in which real money changed hands. To ease the “payment” process – special Community money was published in lieu of the unemployment benefits which the administration used to dole out to the members of the Community.
Now, each member of the Community received from the Governing body a once a month allowance in Community money (instead of real cash) which he was able to use only with other members of the community, unwaged as he was. This way, the buying power of the underemployed was employed completely with the other jobless, easing their across-the-board situation. It also eased the Government’s situation – because it did not have to print additional cash to pay out unemployment benefits. Albeit, this was a fairly tiny and limited experiment – but it was such a success that I believe that it warrants the attention of each nation facing high unemployment.