Today, a panel discussion was held on the topic “Vulnerable workers on the corona rollercoaster” where FINANCE THINK – Institute for Economic Research and Policy – Skopje presented the results of the research on the effects of the pandemic on five groups of vulnerable workers in North Macedonia.
The study “The effect of Covid-19 on vulnerable workers in North Macedonia: Monitoring of low-paid workers, unpaid family workers, paid domestic workers, workers with atypical employment contracts and informal workers” and the organization of the event was supported by the Foundation Open Society – Macedonia.
The event was addressed by Fani KARANFILOVA-PANOVSKA, Executive Director of the Foundation Open Society – Macedonia, Despina TUMANOVSKA, Finance Think, Darko DIMOVSKI, President of the Federation of Trade Unions of Macedonia, Angel DIMITROV, President of the Organization of Employers in Macedonia, Daniela ZAMPINI, Employment Specialist in the International Labor Organization.
Fani KARANFILOVA-PANOVSKA referred to the importance of the conclusions from the study but also to the project within which the study was conducted.
“This study was prepared within the regional project” Responding to the socio-economic effects of COVID-19 by supporting vulnerable groups, low-paid workers, workers in the informal economy and temporal employees “, which is implemented in the Western Balkans. The project is funded by the COVID-19 Joint Rapid Response Fund of the Open Society Foundations and aims to mitigate the socio-economic consequences of the Kovid-19 impact on vulnerable groups.
5 associations from the country participate in the implementation of the project – Finance think, Analytica, ZMAI, LAG Agro leader and Glasen Tekstilec, and with the activities implemented by our colleagues, today we have a better insight into the effects of government policies on vulnerable groups, but also we really contribute to mitigating the socio-economic consequences for them.
Why did we decide to support this project? In its almost 30 years of existence, as many times before in times of crisis, the Foundation focuses on supporting the most vulnerable. “Workers operating in the informal economy have been and are really one of the hardest hit, given their low incomes and the risk of falling into extreme poverty as a result of the Covid-19 pandemic.”
The study accurately distinguishes several findings:
The crisis caused by the Covid-19 virus has brought to the surface structural inequalities and weaknesses in the labor market, hitting some groups of workers harder than others. Low-wage workers, workers in the informal economy, domestic paid workers and unpaid family workers are among those most affected by job and income losses. The cross-sectional analysis of the five groups of workers showed that the total job loss during the pandemic of about 7.5 thousand per year is mostly low-wage workers, of which the dominant part are informal workers, and about one third are domestic paid workers.
However, during the pandemic there were two positive trends in the labor market: First, almost 47 thousand low-paid jobs were lost, but they were not lost but exceeded the threshold below which one job is considered low-paid (about 13,000 MKD, according to ILO definition), due to the increase in the minimum wage and government subsidies on wage increases introduced before the onset of the pandemic. Second, and perhaps more significant, is the finding that during the pandemic over 14,000 informal jobs were formalized in order to take advantage of some of the government’s job protection measures, more specifically the measure of subsidizing wages in the amount of MKD 14,500 per employee.
The process of mass immunization gives hope for the pandemic to subside, and hence the need to favor developmental rather than social measures. In the future, any wage subsidy in response to Covid-19-type shocks will need to include a strong re-employment component in order to reduce the discouragement of those who have lost their jobs.
In addition, policymakers need to focus on reaping the benefits of job formalization and translating them into long-term benefits. Our recommendations include the introduction of incentives to prevent re-deformation, support for the formalization of other informal places, and the regulation, but not excessive, in the spirit of social dialogue, of fixed-term employment contracts.
Finally, measures and policies are needed to increase labor market resilience in order to respond quickly and promptly in the event of future shocks. More effective policies and participatory dialogue between all stakeholders should focus on vulnerable and insecure workers, to avoid the possibility of increasing inequalities in the future.
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10 June 2021