New attempts in solving the problem of youth unemployment

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In May 2012, Croatian parliament passed a law to stimulate employment of young people without work experience, which contained a measure called “Vocational training without employment”. With a monthly compensation of 1600 HRK (210 EUR), young people are offered professional qualification in the period of one year.

A first step toward employment

Author

Marina Kostenko

03/17/2014 - 21:53

More and more young people are leaving Croatia in search for a brighter future. This problem can only be solved by gradually directing towards employment of the overabundant but skilled young labor force. That is exactly what happened.

What is the most important goal of the governmental measure is for young people to gain experience and also to enable them to become more competitive in the labor market. Nowadays, grades that students rightfully gain during their study are losing importance over work experience, which is becoming most valued for employers. When you come to a job interview, in most cases if you don't have a filled CV in your hands, you simply don't stand a chance. Somehow a vicious circle has been created, in which young people cannot get a job unless they have previous work experience, and no employer wants to hire an unexperienced person. This raises a question: How to gain experience without employment for the inexperienced? The vicious circle was closed and the question answered with this measure. It is indisputable that in Croatia there is a problem of disproportion between the predominant professions of the unemployed workforce and the requirements of the labor market. However, it is also clear that the one-year internship is not primarily intended for persons with scarce professions (e.g., pharmacists, physicians), but for those with whose professions labor markets are overcrowded (e.g., economists and lawyers). This gives them a chance to express their capabilities and potential. Ultimately, it is necessary to point out that since the beginning of this measure, 62 % of young people has found a job after finishing their internship.

Compensation does not mean salary

This measure has received much criticism from the very beginnings. The first criticism was directed towards the monthly compensation received for the internship. This amount may not be sufficient to cover basic living expenses, but at a time when the crisis takes more and more jobs from working-age people, this kind of internship certainly has its benefits. First of all, the amount of 1600 HRK (210 EUR) is substantially bigger than the one provided by the state if a person is reported on the labor market. Furthermore, the government has allowed the payment of transport costs in the amount of up to 1000 HRK (130 EUR), which also removes a huge burden from the backs of young people. This measure was not intended to instantly create a selfdependent middle or upper class right after college, its intention was to provide young people with a chance to move themselves from the desperation and hopelessness of waiting on the labor market and to prove to an employer that they are capable and motivated enough to become permanently employed. Therefore the monthly compensation is not and needs not to be a monthly salary, but a stimulation.

The private sector is starting to notice benefits

Still, Minister Minister of Labour and Pension System, Mirando Mrsić is being accused of not achieving what was originally intended: to relieve the public sector and to encourage youth employment in the private sector. However, it is necessary to keep in mind that a measure introduced by the state and thus the public sector can not immediately achieve success in the private one. Private owners are still standing on shaky ground and a certain programme must be proven and viable for them to participate in it. Despite that, today one third of the interns is hired in the private sector. Also, more and more private owners and businessmen believe in the usefulness of this measure and therefore tend to hire young people that have been a part of it.

This article deliberately presents only one of the many existing points of views of this contorversial subject. Its content is not necessarily representative of its author's personal opinion. Please have a look at Duel Amical's philosophy.

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Mediocre and exploited young workers

Author

Gabriela Gorupec

03/17/2014 - 21:53

Measures to stimulate employment are introduced so young people gain competitive strength on the labour market. The consequences are though not promising; not only are they lacking economic self-independence due to the fact that the monthly compensation is too low, they are also being exploited by their employers.

Minister of Labour and Pension System, Mirando Mrsić, introduced the policy whose goal was to stimulate employment of young people. It is though important to note that unemployment is increasing not only due to economic crises: In Croatia it's more a result of disproportion between the current professions of the labour force and the labour market. The education system without quotas for enrolment that correspond to the demands on the labour market are contributing to unemployment. As unwanted labour force without experience, young people are more vulnerable. They are „cheaper” labour force due to the fact that they lack experience and therefore more easy to manipulate; they will do whatever it takes to gain work experience. As a result, the cost of labour decreases and salaries for both unexperienced and experienced young people decrease.

Monthly compensation is too low

It is obvious that 1600 HRK (210 Euro) is not nearly enough to cover the basic living costs in Croatia. With a hourly wage of 10 Kuna (1, 50 Euro) young workers are exploited; they are as adults forced to live with their parents, still lacking self-independence as educated citizens. The costs of living are increasing daily; the government is monthly introducing new policies regarding taxes, for example taxes on real-estates and personal savings which contribute to the degradation of young people. Therefore are young people focusing on becoming mediocre; without salary growth their work effort stalls or decreases. Despite that there are efforts regarding the increase of compensations, today this remains only in the area of debate.

Private sector remains unstimulated

In rural areas where unemployment is most present, the new policy is not efficient; its lack of implementation is noticeable in towns and suburbs outside of big cities. One of the main problems is that 60 percent of the current users of the employment measurement are gaining their work experience in the public sector which currently has a distraint regarding permanent employment. It is therefore hard to expect that a young person after one year of gaining work experience in the public sector is offered permanent work. The monthly compensation of employed young people is paid by the government who is not making an effort to increase employment in the private sector. Due to the fact that the private sector is still under-represented it is important to increase policies regarding the private sector and focus on the disproportion between the current labour force and the labour market and the possibility to provide young people with permanent work in their field.