Numbers Alone Cannot Explain Unemployment in Slovakia

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Looking at the world only through aggregates can be dangerous. Especially if you are trying to see whether someone wants or does not want to work. On the one hand, Slovak unemployment rate is declining. Automotive industry and large companies find it difficult to hire enough employees. According to the recent reports, workers are brought in not only from Ukraine or Hungary, but even from Serbia.

On the other hand, the unemployment rate is still high in Slovakia. There are 110,000 of people who are looking for a job for two or more years. And the individuals who could find work for more than a year are accounted for more than 60% of all unemployed. In the EU28, this ratio is 47.8%.

The current Slovak Prime Minister and Minister of Labor had looked at these two numbers and found an immediate explanation: people do not want to work! How else can we explain the reported lack of staff and a large number of long-term unemployed existing simultaneously? Such simplified reasoning is only another manifestation of the use of hazardous aggregates.

Although some phenomena can indeed be summarized under one concept, it does not mean that it is a homogeneous mass. The economy does not work like Tetris, where you can take the unemployed and shove them in the vacant post. There are several reasons for this.

Too Many People in Rural Areas

The first one is the geographic distribution of people in Slovakia. Generally, the districts with high unemployment rate (Rimavská Sobota, Revúca, Rožňava and Kežmarok) are not among the districts where automotive industry and other large employers are allocated. They tend to clump together around the big cities, while many Slovaks continue to live in the countryside, far-off the cities.

Only 12% of Slovak population live in cities with more than one hundred thousand residents. While in the Czech Republic it is 22%, in Austria and Hungary 28%, in Poland 29%, in Germany 32%, and in Finland this figure is up at the level of 35%.

This means that Slovak society is poorly urbanized, and the labor supply is often allocated precisely in the urban areas. Moreover, Slovakia is among the leaders in the EU when it comes to the rate of properties in private ownership, which makes moving for work even more difficult. However, resettlement as such is not always the main problem.

Thit brings us to the second reason: the mismatch of work skills, habits and knowledge in comparison with the available jobs. Even if the work position is in the same area where the unemployed person lives, it does not automatically mean that they “fit” together.

The Obstacle? Bureaucracy

Perhaps it is clear to everyone that the unemployed with basic education cannot aspire for an open IT specialist position. What is less obvious is that someone without any work habits is usually unable to get a long-term contract, even if it is “only” a manual job.

What this kind of an employee with low productivity needs first is to gain the working habits and capabilities. Climbing up the career ladder begins from the bottom. However, these people often do not get such an opportunity, because the occurrence of these jobs is made legislatively impossible. The law does not allow them to work for a wage lower than the minimum wage. Thus, creation of simple jobs in the villages of Eastern Slovakia is effectively blocked. Even though these would not create a high added value, it would still be an opportunity to gain some work experience.

Nowadays, an employee with completed primary school without any work experience living in Eastern Slovakia has to make a minimum value of almost EUR 600 every month. Not to mention the resulting bureaucracy and obligations carrying a risk of heavy fines for employers on top of it all.

These are the people the PM and Minister of Social Affairs accuse of misusing the system. This is the way the government wants to distinguish between those who want to work and those who do not. However, by using these aggregated views, the government has forgotten about those who cannot work – because for them, there is nowhere to work at.

Translated by Martin Garaj

This article was originally published in Slovak here

Robert Chovanculiak
INESS