Labor Market in Macedonia


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Employment_vs_unemployment

Published, February 10, 2013/Update July 18, 2013

If one wants to challenge not only current government, but also domestic thinkers in the sphere of economy and members of opposition, inevitably should ask for an endurable solution to an unemployment burden. Consistently, Macedonia is in lead with unemployment figures in the past twenty years among the countries in the region with percentage of unemployment rate that rarely falls down below 30 percentage, as shown with domestic statistic. 

In terms of geographical location, Republic of Macedonia is situated on Balkan Peninsula and it is in the heart of sought central Europe and borders with Greece, Bulgaria, Serbia and Kosovo. It is landlocked country and according to the State Statistical Office last census data of 2002 it has 2.022.547 inhabitants. General overview of state of the economy in the country outside its borders is perceived as a country in development. The USA State Department notifies the country has an open economy that is in cohesion with other markets in the world.

“Macedonia is a small economy with a gross domestic product (GDP) of about $9.8 billion). It is an open economy, highly integrated into international trade. The services sector is becoming increasingly important, accounting for more than 45% of GDP creation”, presents State Department.

The official statistic number of the unemployment dropped on 31,3% in the second quarter of 2011, but remained of the highest in Europe. The State Department Background note on Macedonia in November 8 2011 underlines “many people work in the gray economy, and many experts estimate Macedonia’s actual unemployment as being somewhere between 20%-25%.

According to  basic economic data of the National Bank of the Republic of Macedonia, that has central role in creating monetary policy, the percentage of unemployment increased in the first quarter of 2012 to 31,6 percentage compared to 31,4 percentage in 2011.

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Source for the photo: By Airman 1st Class Kerelin Molina [Public domain], via Wikimedia Commons 

According to the data available on the site of Employment Service Agency of the Republic of Macedonia, the number of the person unemployed registered in the records of the Agency in June 2013 are 96.999. The document available on the agency Web page (http://bit.ly/15PbnOs) shows that 126.740 person search for a job. In June 2012, the data of the Agency (http://bit.ly/15psBQo) has registered in their evidence 261.322 unemployed person.

To compare, the State Statistical Office most recent data on the labor market for the first quarter of 2013 (http://bit.ly/13B0haB) shows that 284.823 person are not employed.

Earlier, the data on unemployment published by the State Statistical Office of December 17 are for the third quarter of 2012 and shows that “Republic of Macedonia numbered 940.657 persons as an active work force, of which 652.498 or 69.4% were employed, while 288.159 or 30.6 % were unemployed persons”.

Latest data of State Statistical Office also shows that number of available job vacancies is 4 849 or the job vacancy rate was 1, 24% in the third quarter of 2012, among them the largest is the number is in manufacturing, 1577 and the lowest number, 5 is in electricity, gas, steam and air conditioning supply and real estate activities.

Number of occupied post is 386.909 and among them largest is the number of employees in manufacturing 89.520, followed by wholesale and retail trade; repair of motor vehicles and motorcycles G, 61.310 and 43.935 occupied jobs in public administration and defense; compulsory social security.  Construction industry occupies 23.538 jobs placement. In total, state employees occupied 139.529 job posts in the country. 

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Numbers of occupied and available job post in Republic of Macedonia for third quarter of 2012. Source for the chart State Statistical Office

Even though, according to national statistical data in Macedonia, the number of employed person is double compared to those are not active on the labor market, high percentage of unemployed is a challenge to every government that wants to promote, to develop and improve the life of citizens in the country, not only in terms of buying social peace, but also to foster changes in people’s mindset and level of consciousness toward environment and its sustainability and protection.

Inevitably, this correlates with ideas, theories or using of world economy knowledge to bust employment and maintain the country on stable economic path simultaneously supporting development and creating jobs. Recently, after December 24th 2012 and the way State budget for 2013 was voted in the Parliament (Assembly) by the majority of Parliamentarians create the following question: How much ruling government is ready to go in support of government-sponsored policy of full employment and is this a reasonable step for further development of economy in the country?

Current government in Macedonia that is on power after several reelections since year 2006, confuses not only parties in opposition, but also citizens who does not approve their policies, with its constant public relations campaigns, public announcements of government supports in employment, creation and implementation of projects such as Skopje 2014 and other measures with that are justified as government support toward employment in the country and help to construction as sector in economy.

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Skopje region leads with opening job position with 2154 available posts, according to data of State Statiscial Office for job vacancies for the third quarter of 2012. Skopje has biggest number of occupied job post, 196 660 compared to other regions in Macedonia.  Archive photos Skopje, 2012 – 2013

Demonstrated attitude by the government largely driven by the economy believes of the current Prime Minister Nikola Gruevski and Government’s ministers in sectors responsible for economy question how much of the policy that the government tends to impose and implement correlates with economy theory of famous and remarkable British economist John Maynard Keynes.

Although, important is the question how much the ideas of Keynes that helped building of post Second World War economies in western countries are implementable in Macedonia? All these are thoughts for an economic debate that could give more depth and correct answer to brought out question.

Having in mind the context of economy crisis, not only in the USA, but also in Europe, and the attempts of governments and economy leaders to use various theories and approaches to overcome it, it is highly of interest to explain and mention some of key elements in Keynes perception and theory of regulation of the market.

Keynes trusted to idea that after certain point, markets are not able to adjust themselves and that could result in high unemployment for a long time and sluggish economy growth, contrary to his American counterpart Milton Freedman whose ideas was concentrated on completely free market regulations.

Keynes promoted and published his book “The General Theory of Employment” in 1936 where he explains the core elements of the idea how to regulate market based on greater importance of government influence in creation of jobs.

And Keynes actually came up with a solution, too, which should sound pretty familiar. When all else fails, the government can step in where the private sector failed and kick-start the economy”, explained in January 16th 2009 Adam Davidson co-founder and co-host of Planet Money program he realized with National Public Radio.

Another cornerstone of his writings and economy school is to justify the policy of borrowing to endure employment in case where private sector investments are not sufficient to support creation of new jobs on the market. In order to face the challenges of recent economic crisis and to avoid meltdowns, governments in different part of the world bring on surface some of Keynes ideas in economy. 

Media and economist commentators in the USA pay attention to importance of Keynes method in economy. 

Christopher Farrell, economist editor of Market Place Money, personal financial show in production of American Public Media in Business Week article of September 28, 2009 The redemption of Keynes, explains why he thinks this British economist should deserve Man of the Year title.

“Governments around the world have successfully, if messily, resurrected many of his insights from the 1930s to thwart economic collapse. Foremost is his idea that easy money and government spending can rescue an economy in free fall–with credit frozen, businesses panicked, and consumers paralyzed”.

Although, Keynes ideas in economy inspired statesmanship or leaders in the world, such as the USA President Barack Obama to cope with economy crisis in recent days, his thoughts and learning were overlooked by economist before 1990ies and those in politics hardly used his name. 

“Yet by the 1990s, Keynes was largely ignored by economists, who became increasingly enamored with market efficiency and obsessed with the deadweight costs of government”, writes Farrell in Business Week article.

Importance of Keynes in world economy is measured on large-scale of historians or economy professors who tend to study his influence not only in the past, but also in present days.

Historian Peter Clarke, as Ferrell mention in his Business Week article, reaffirms some of Keynes ideas in his book Keynes: The Rise, Fall, and Return of the 20th Century’s Most Influential Economist, says that Keynes is “a product of Eton and Cambridge, he was a multifaceted genius living at the center of Britain’s academic, journalistic government, financial, and artistic communities.” In his article The redemption of Keynes, Ferrell quoted Robert Skidelsky, author of a three-volume biography of John Maynard Keynes and economy professor at Warwick University who points out the importance of bringing the economy on the level of humanism.

“People have started asking: What is economics for? To Keynes, it wasn’t about efficiency or wealth – building. He thought hard about how economics relates to an ethical life, to art and beauty, to what is truly good and valuable. And his return may create room in the post-recession debate for questions along those lines”, underlines Ferrell.

Nevertheless, if current government in Macedonia builds some of the policies or not on the premises of Keynes policy in economy, their success could be measured from the point of his theory of government intervention in market to ensure growth and employment.

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