The secret of low unemployment “historically” in Serbia – Economy

Until mid-May, our fellow congressman worked in a small business illegally, without registration. If you were called from the Bureau of Statistics, I’d honestly say you’re working illegally.

Photo: FoNet / Press Service of the President of Serbia

The company stopped finding a job because there was hardly any money for the salaries of the full-time employees, so the boss sent him home.

Due to the coronavirus, he stopped reporting to the office and looking for work, and when called by the statistics interviewers, he said that he was not working and that he was not looking for work.

According to the official vocabulary, it went from the active workforce and informal employment to the inactive workforce, but not to the unemployed.

Believe it or not, the Ministry of Justice case contributed to the second quarter unemployment drop to a record 7.3 percent, which is what top officials have been bombarding us with in recent days.

As a general rule, they omit to mention that in the second quarter employment was reduced by 33,200 people, in the informal sector, that is, among those who work illegally.

After all, the Office of Statistics itself, in a statement on the results of the Labor Force Survey for the second quarter, kindly explained that “the new economic crisis has caused a decrease in unemployment, because people who were unable to find work or They were unable to start work because of Measures to prevent the spread of the virus are not considered unemployed (according to the ILO concept) but inactive. “

This is confirmed by the figures, in June compared to April, employment decreased by 33,200 and unemployment by 87,400 people, so the number of inactive people increased by 113,100 people.

In the second quarter of this year there were 153,800 more inactive people than in the same period last year, and the number of active people, that is, those who are employed or looking for work, decreased by up to 183,400 compared to the same period.

The difference refers to almost 30,000 people under the age of 15 in Serbia in the second quarter of this year, compared to the same period last year.

Both economic and statistical indicators and employment data are rarely used. Therefore, the President of Serbia, the Prime Minister of Serbia and the Minister of Finance have been incredibly proud of themselves and the fact that in the last two or three days a record unemployment rate of 7, has been reached. 3 percent.

Jovan Protić, representative of the International Labor Organization in Serbia, points out that the relevant indicator of the situation in the labor market is the employment rate, and not the unemployment rate.

“The fall in unemployment is a consequence of the fall in the activity rate, and that is clear from the data from the Labor Force Survey. The number of people working and the number of job seekers have also decreased. The difference between unemployment and inactivity is that the unemployed seek work and cannot find it, and the inactive do not even seek it. This is not a good sign, but it is neither new nor dramatic, ”says Protić.

By the way, according to an ILO investigation in Serbia, the crisis has affected the loss of working hours amounting to about 500,000 jobs. In other words, this does not mean that 500,000 people lost their jobs, but that in addition to those who were laid off, many people did not work, but received wages or worked part-time.

The hypothetical situation that the unemployment rate may drop to zero also speaks to the reliability of the unemployment rate, for example, if all those who are registered as unemployed answered in a survey that they are not looking for work. Then everyone would become inactive and there would be no unemployed.

Danko Brčerević, an economist at the Fiscal Council, also noted that in the second quarter of the state of emergency, up to 150,000 fewer people were looking for work than last year.

“That is the reason why the unemployment rate fell sharply, despite the fact that more than 70,000 people worked less. “The data on the low unemployment rate should not be so presumptuous at this point,” Brcerevic told the media.

Serbia already has a low labor force, which is the source of work. Thus, in the EU, the activity rate in January this year was 58 percent, while in the first quarter in Serbia it was 54 percent. It fell an additional two percentage points in the following quarter.

The economist Milan Kovacevic points out that non-transparency is dominant in our country, hence these interpretations of the statistics.

“In our country, there is a desire for people to go crazy and not understand what they are talking about. And even in such conditions, it is better when everything is blurred, “she concludes.

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