Thursday , May 19 2022

Government support for companies is currently working. We do not see the real situation yet, says the economist – People – Economy


Milan Krajniak

Milan Krajniak


Many analysts were very wrong when they claimed that the labor sector had no strategy to help people, Labor Minister Milan Krajniak of We Are the Family said at a press conference on employment development. According to him, the test is the decline in unemployment since August, which is supported by government measures. Unemployment fell slightly in October compared to the previous month. However, experts warn that it is only when the state stops subsidizing companies that we discover the state of the labor market.

The registered unemployment rate for October reached 7.35 per cent. Compared to the same period last year, however, it rose more than 2.4 percent. On the other hand, nearly 1,500 more people found work than in the same period last year. Krajniak also pointed out that the unemployment rate is currently slightly lower than just before the crisis in April 2008. Most people found work in the Prešov area. The Prešov region also had the highest number of applications for job assistance.

VIDEO: Krajniak at good unemployment rates.

Keeping employees artificial?

The Labor Minister sees the positive development primarily as predictability and support for companies operating in supply industries. They were subsidized in the spring and their stability was assured to another network of other companies. “They decided to change the structure and take the parts from us. Many companies that wanted to make a spring break are now creating new jobs,” said Krajniak, who has also been carefully confirmed by economic analysts. However, subsidies can distort the real situation.

According to Petr Goliaš of the INEKO organization, the sharp rise in unemployment is largely hampered by compensation schemes for job retention, contributions to support the employment of young people or support measures for smaller entrepreneurs. They also employ people. “Without these measures, the rise in unemployment could double this year,” Goliaš thinks. Many companies keep their people just thanks to state funding. According to Krajniak, however, this is not artificial retention of workers.

“In the spring, we gained the trust of entrepreneurs by running out of money. In this second wave, we see that they are confident and able to calculate how much they will receive, and this gives them a competitive advantage over other suppliers and suppliers.” other countries where production has been completely limited, “he added. According to Róbert Chovanculiak of the INESS Foundation, employment is artificially maintained and the current situation on the labor market can be compared to the “device-assisted” lungs.

According to him, his real state will only be revealed when the state stops paying aid to companies and employees. “It then shows whether entrepreneurs can keep jobs without subsidies,” Chovanculiak said. He added that the state of employment will still depend on how the Slovak economy manages the second wave of the pandemic. It is particularly upsetting for tourism organizations, as production has not been reduced in industrial plants, for example.

Companies: We suspect

According to Miriam Filová, a spokesperson for the Association of Employers Unions and Associations of the Slovak Republic, companies’ subsidies contribute to declining employment, but they are still uncertain. In addition, first aid and more distorted the condition of holding a subsidized job from two to a month. “It simply came to our attention then. We wanted to make it easier for employers to make decisions,” Krajniak explained the change. He added that companies might be afraid to apply for a subsidy, which would then force them to keep the job for two months without survival protection.

In addition, there are no new jobs. After a seasonal adjustment, their number dropped 1.5 percent compared to September. “When it comes to recruiting a new workforce, companies are cautious because of the current, uncertain situation,” Filová said. According to her, employers are feeling a significant fall in the labor market, at the same time they have pessimistic outlook for the future, which is reflected in the low number of vacancies. Because of the crisis and uncertainty, companies are leaving many activities humbled, Filová stresses.

Minister of Labor Milan Krajniak

Minister of Labor Milan Krajniak
Author: Robert Huettner

Consideration should also be given to worsening the situation during winter and spring. This is mainly due to restrictions during the second wave of the pandemic. The redundancies are announced primarily by some operations, which fall under the Slovak Hotels and Restaurants Association. During the first wave of the pandemic, they saw workers fall by almost a third. During the second wave, another 16.5 percent of employees may lose their jobs. In restaurants and hotels, the second wave threatens about 36,000 working people.

Whether unemployment will continue to grow depends not only on the type of measures, but also on the reserves of individual companies and households. For now, the state plans to extend the assistance for as long as necessary. Union funding is still available in Slovakia for 2021. From the next one, a permanent kurzarbeit, intending to introduce a labor sector, should start applying. The situation abroad can also affect the statistics curve of the unemployed. “It also depends on the return of our migrants after some of them lost their jobs in other countries,” said Michal Páleník of the Employment Foundation. Uncertainty remains, he added.

Wages fell in September

According to the Statistical Office, in September average salary increased year-on-year in most sectors. Exceptions are accommodation facilities and car service operations. The average wage of workers in accommodation establishments fell 3.2 percent to 775 euros a month. In addition, its average height has been declining for the seventh month in a row, roughly since the start of the pandemic. However, according to Páleník, the data may be deviating. “The accommodation and catering sector has long been illegally paying for the blindness of labor inspections, which ignores these violations of the law and the abuse of workers,” he thinks.

Since the start of the coronary crisis in the sector, the National Labor Inspectorate (NIP) has dealt with undeclared cases of work. In most reservations, this was also confirmed by the inspection. “After adopting restrictions during the first wave of the pandemic, companies in the hotel and restaurant sector began illegally accessing people’s employment. There were also curious cases in construction,” NIP head of management Michal Horňak revealed. These were mainly workers from Serbia and the Ukraine. As well as undeclared work, during a pandemic, there is also talk of employers forcing employees to sign a warning to avoid a notice period. According to Horňak, people should turn to the NIP.

Conversely, the highest wage growth compared to last year was recorded in September by the retail sector. The average wages of people there increased by eight per cent and reached the level of 825 euros. The surprise of September was also the average wage growth in restaurants and pubs, where it reached the level of 560 euros a month. This is a 7.7 per cent growth and the second highest in September. People in information and communication activities also improved by more than six percent. According to Chovanculiak, the average wage will only start to increase faster when our country’s economic performance stops falling.

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