Unemployment

76.3% of all men were employed (82.6% of women), 4.3% were employers (1.7%), 4.9% were self- employed (2.5%), 3.4% worked in family owned businesses (7.5%), 10.8% of all men worked in agriculture (and 5.6% of women).

Men made up 62.3% of the employed (women ? 37.7%), 82.2% of all employers (17.8%), 78% of the self employed (22%), 45% of those employed in family businesses (55%), 77.5% of those employed in agriculture (22.5%).

The Situation in 8/99

Economic underdevelopment, agrarian over-employment, external shocks and an unrestructured economy led to an increase in both structural and cyclical employment.

The supply side is still composed mainly of new entrants, women and unskilled or semi-skilled labour as well as educated workers.

The demand structure is incompatible with the supply. It is made of replacement jobs, new jobs (mainly in labour intensive industries), jobs generated by foreign entities.

The number of the unemployed broke yet another record in 1999 and reached 344,472 people. Of these, almost half ? 154,000 ? were unskilled. But the unemployed included 5 doctors, 34 holders of master?s degrees and 11,400 with higher education. About 33,000 of these numbers were made "technologically redundant" ? the euphemism for being laid off due to restructuring of enterprises or their closure.

By comparison, the number of employed people was only 316,000.

In the first 8 months of 1999 alone there were 6,000 new unemployed per month versus a monthly average of 3,700 in 1998. This increase is attributed to the inclusion of people who did not bother to register with the Employment Bureau in the past.

The fiscal burden increased dramatically as contributions deteriorated to 25% of the Employment Bureau?s financing while the state budget contributed the remaining 75%, or 3 billion MKD (equal to 100 million DM or c. 1.7% of GDP). The Employment Bureau also pays health insurance for about 200,000 unemployed workers.

The Labour Unions

The Association of Trade Unions in Macedonia (ATUM or CCM in the Macedonian acronym) is a voluntary organization, which encompasses 75% of all the employed workers in Macedonia as its members.

It is organized in the level of firms and institutions and has in excess of 2600 chapters. Additionally, it has about 150 chapters in the municipalities and in the various industrial sectors (all 15 of them).

The typical Macedonian trade union is not supported by the government and is entirely financed by its membership fees (self sufficient).

The first collective agreement was signed in 1990 at which time the idea of Economic Social Council was floated as well as the idea of a tripartite (government+employees+employers) dispute settlement mechanism.

The Labour Relations act was passed in 1994 and instituted national collective agreement for the economic sector between CCM and the Board of Employers of the Economic Chamber of Commerce of Macedonia. Another general collective agreement covered all public services, public companies, state organs, local authorities and legal persons performing non-economic activities. This latter general collective agreement was signed between CCM and the Government of the Republic of Macedonia.
Yet a third set of more than 20 collective agreements between CCM and various organs of the Chamber of Commerce and ministries covered other sectors.

The Future of Unemployment in Macedonia

Public enterprise restructuring, privatization and reform are likely to increase unemployment benefits by 200-300 million MKD annually (assuming only 2,000-3,000 workers are fired, a very conservative assumption as there are 18,000 workers in the 12 major loss making state firms, whose closure was demanded by the IMF).

Unemployment is very dependent on productivity and GDP growth. The World Bank predicts that with a GDP growth of 0%, the total expenditures on unemployment benefits could equal 2.3% of GDP. Even if GDP were to grow by 4% annually, their projections show unemployment benefits equaling 1.6% of GDP.


Bibliography

"Has Job Stability Declined Yet? New Evidence for the 1990s", NEBR working paper, December 1997.

"Job Tenure and Labour Market Regulation: a Comparison of Britain and Italy using Micro Data", CEPR discussion paper, October 1997.

"A Disaggregate Analysis of the Evolution of Job Tenure in Britain 1975-93"

"Monetary Union and European Unemployment", CEPR discussion paper No. 1485, October 1996.

"Policy Complementarities: The Case for Fundamental Labour Market Reform" by David Coe and Dennis Snower. IMF Staff Papers Volume 44, No. 1, 1997.

"French Unemployment: Why France and the USA are alike" by D. Cohen, A. Lefranc and G. Saint Paul. Economic Policy 25, October 1997.

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