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Unemployment — between reality and statistics
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Generally, an economic growth impelled by investments in almost all productive sectors attracts new jobs, which means increases the employment rate, according to economic theory. But the situation on Moldovan labour market inclines to the other extreme; the country records an economic growth but statistics reveal a high unemployment rate, which could exceed 8 percent in the first half of this year (the unemployment rate for the 2nd quarter of 2011 exceeded 6 percent).
How to explain this situation? First, such a conjuncture is typical to many developing economies, including Moldovan, in which effects of economic growth do not strongly influence the employment, especially because these markets are relatively rigid and inertial. Second, the modernisation of equipment in many sectors which develop the economy (last-generation installations etc.) that usually needs less labour force could explain this fact.
Another proof in this respect would be that statistics indicate a rise of investments in modern equipment and devices. Or, companies or enterprises do not reemploy but some of employees who were formerly dismissed because of the decline of demand or just those selected after severe contests. Third, some sectors hardly recovered after the crisis, such as the building sector, which finally suppressed most of jobs. In addition, one should not forget that many people get formally registered as jobseekers with Labour Force Offices, while they illegally work de facto or are employed in the informal sector, which is hard to account.
As already noted above, the labour market is rigid and reacts quite slowly, and laws should probably be amended for this purpose, since authorities often assure that they seek a flexible labour market, but do not provide any arguments to demonstrate above all the rigidity that a new Labour Code would combat. Even more, such arguments are unavailable, as appropriate data are unavailable, too. It is pretty hard to learn the number of new and suppressed jobs. Press reports indicate a net difference between the current number of jobs and that recorded last year or in 2009, but they do not indicate any inflow behind this result: how many jobs were created and how many jobs were suppressed, or this indicator is very important for policy drafters to find out how does the economy react to changes. For example, Moldova has a high number of temporary work contracts, and this does not reduce the unemployment rate but on the contrary.
What will happen, what should the Government do? The recovery of economy is not capable to redress the labour market. I have already said on other occasions and I think I am right to repeat again that running for jobs or workplaces will be the sport of next years. Moldova is not the only country to encounter such a situation, as the conjuncture in the region and other states is more or less similar. In fact, the situation cannot be another, as population is exposed to new realities on market which demand more modern technologies and less labour force.
Perhaps the Government (along with social players Employers and Trade Unions) should consider ways to social solidarity like those used by the West, such as reducing the time of work, granting unpaid holidays, paying 75 percent of salaries when employees do not work because of poor economic activity, etc. All these examples are emergency situations, when employers cross difficult periods such as lack of demand. I think the reduction of the time of work is a preferable alternative for employees instead of collective dismissal. Higher education and requalification are required for former employees. In addition, equilibrium between demand and supply on labour market should be respected, given performances of our education system.
Fortunately, majority of political leaders in Moldova underline the importance of education. However, authorities should think more about infrastructure of education, quality of curricula, etc. The number of seats in technical (professional) schools, higher-learning engineering schools should be increased. The future belongs to countries which focus on technical (engineering, mathematics/physics) education, rather than on producing lots of economists and jurists.