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Job scheme criticised as stop-gap measure

"My future is uncertain. I will lose this job in December, will be unemployed and spending my time at home again," said Judita Foltínová, one of the 70,000 people who have so far taken part in the government's new 'work for welfare' employment programme.
The mainstay of a government employment policy document, the scheme has already fulfilled its main aim, cutting Slovakia's soaring unemployment rate from July's 19.4% to 16.6% in September.
The programme, started in August this year and designed for people who have been unemployed for more than one year, has given jobs to 59,368 people and will cost the government two billion crowns ($40 million).

"My future is uncertain. I will lose this job in December, will be unemployed and spending my time at home again," said Judita Foltínová, one of the 70,000 people who have so far taken part in the government's new 'work for welfare' employment programme.

The mainstay of a government employment policy document, the scheme has already fulfilled its main aim, cutting Slovakia's soaring unemployment rate from July's 19.4% to 16.6% in September.

The programme, started in August this year and designed for people who have been unemployed for more than one year, has given jobs to 59,368 people and will cost the government two billion crowns ($40 million).

However, despite its apparent success with lowering the unemployment rate, people on the scheme, like Foltinová, have complained that the programme has one major fault - it is only temporary - meaning that she and others will have to find a new job when her contract ends in December.

"I will no longer fall into the group of those having been unemployed for more than one year, and won't be allowed to qualify for the programme again," she said with a mix of frustration and sadness.

Moreover, there are more unemployed waiting to step into her shoes. Although the programme gives unemployed people only temporary work, government officials and analysts say that its main aim has been to get people back to work in any form, giving them the opportunity to re-acquire working habits they lost after being unemployed for a long time.

According to Ján Tóth, analyst with ING Barings, similar programmes have been successful in other European countries because they helped jobless people to find a new job after their programme ended. "It doesn't mean that everybody managed to find a new job. But thanks to the skills which they acquired during the programme, many people found a job. I hope this will happen in Slovakia as well," Tóth said.

He added that the government had to ensure that the programme was continued next year, otherwise the unemployment rate would quickly return to the 20% level it had reached at the beginning of this year. The government has committed itself to cutting the unemployment rate to somewhere close to 16%. A draft of the 2001 budget presupposes an allocation of 1.5 billion crowns ($300 million) for the programme.

According to Labour Ministry officials, some changes aimed at offering the unemployed a wide range of work possibilities are expected to be implemented in next year's programme. "We want people to be employed by small and medium-sized businessmen [SMEs] and persuade SMEs that they don't have to be afraid to hire unemployed people. We would also like to include university students who have been unemployed less than one year in the programme," said Štefan Condík, director of the labour section at the Ministry of Labour, Social Affairs and Family.

Welfare programmes have previously been largely implemented with the involvement of municipalities, state-institutions, hospitals and non-governmental organisations.

But not all unemployed who were included in the programme will remember it in quite the same way as Foltínová. According to an official from Bratislava's District I Office, some people on the scheme who were supposed to do seasonal work failed to turn up, while others scheduled to provide mentally handicapped people with assistance gave up after only one day on the programme.

According to Darina Malová, a labour expert with the country's largest educational institution, Comenius University, for many unemployed it is difficult to rid old habits and get back into regular working mode. "They would rather sit at home, like couch potatoes and take occasional jobs," she said.

She added that illegal work was widespread across the country, that many jobless felt disinclined to take regular employment, and that many companies prefered to employ people without signing contracts, thereby avoiding the 38% insurance payments required on the salaries of full time employees. "When you look at how much an employee has to pay to health insurance companies and an employer to the social insurance company, it is better for both of them to agree on cooperation without a contract and the need to pay these payments," Malová said.

"The higher the contributions to these [social and insurance company] funds are, the more people will avoid paying them," she added.

The draft for the 2001 budget envisages an increase in payments for medical insurance from 13.7% to 14% and company contributions to social insurance from 27.5% to 28%.

But for Foltínová, there is no other choice than welfare because in the her home region of Rimavská Sobota - which has one of the highest unemployment rates in Slovakia at just over 30% - there is no chance of finding a job. "I would accept any kind of job in order to earn money. I was unemployed for five years and finally got a job. But what is the point in helping me to regain working habits when there is no possibilty of finding another job in this part of Slovakia?" Foltínová asked.

The Labour Ministry's Condík agreed, saying that finding a job for those who took part in the programme was a difficult task, dependent as it was on the revival of Slovakia's corporate sector and more foreign investment.

"Only a revival of the economy, which we believe will happen, will permit the gradual creation of new jobs, and thus the importance of the welfare programme [and the skills acquired through it] will be justified," Condík said.


As the chart above shows, the work-for-welfare programme has had a dramatic effect on unemployment since its launch in August..jpg
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