Counter-spin: There are new workplaces, but they are paid for from the budget

VMRO-DPMNE’s leader, Nikola Gruevski, has announced that he shall open at least 150.000 new workplaces in the next decade. Aiming to persuade the citizens that he is qualified and capable to fulfill this promise, Gruevski stresses that during his party’s one-decade rule, more than 170.000 workplaces have been opened. However, facts show that great deal of newly created workplaces in the private sector are not real, and employees occupying those workplaces are paid by the budget

Author: Vlatko Stojanovski

Spin: We are offering the new era. The new era of 150.000 new workplaces. It is offered by us, this coalition that has created 173.000 workplaces in the past decade and has decreased the unemployment rate from 40 to nearly 22 percent. We can promise that we shall create 150.000 new workplaces and shall bring the unemployment rate below 10 percent. Everyone who wants to work, if he is persistent enough and wants to find a job, shall find one…

[Source: Our goal is to increase the quality of life…, date: 11 October 2017]

Counter-spin: On almost all of VMRO-DPMNE’s pre-election rallies, Nikola Gruevski has bragged that his successful policies and measures in this area have resulted in creating new workplaces, which have reduced the unemployment rate. To back that up, he emphasizes that during the rule of VMRO-DPMNE (2006-2016), 173.000 new workplaces have been created. However, data show that the number of new workplaces does not correspond completely with the increase of the employment rate.

According to State Statistic Office’s database, there were 570.404 employed persons in 2006, whereas in 2016, the number of employees was 723.550, or 153.147 more.

In fact, this number is 20.000 people lower than the number proclaimed by Gruevski, and this could mean that the newly created workplaces haven’t been filled by persons who were unemployed at that time, but by people who had previously been employed elsewhere.

But, the bigger problem than the number of employees and the increase of the employment rate, in nominal terms, is the structure of newly created workplaces. Plenty of them have been created in the public sector, and the private sector has been stimulated by the state, through various subsidies, to open new workplaces. Hence, the increase of the employment rate is not a result of the stepped-up economic activity and economic growth, for the most of it, but of the state decisions and measures with budget implications.

ONE-THIRD OF THE NEWLY EMPLOYED HAVE FILLED WORKPLACES IN THE PUBLIC SECTOR

The public sector has significantly grown in the period 2006-2015, having 105.000 employees in 2006 or 129.600 in 2015, according to the analysis of public sector’s characteristics “What kind of public sector do we have?” authored by the Center for Change Management (CCM) at the beginning of 2017. This means that during the rule of VMRO-DPMNE, 24.600 persons have been employed in the public sector, which is 24 percent increase up to and including 2015. However, according to CCM’s analysis, if you take the number of people who have retired during that period into account, the number of new employees in the public sector may be even bigger.

Let’s assume that the persons aged 60-64 make 4 percent of all employees in the public sector. This means that from 2005 to 2008, 4.200 people have retired from the public sector. If people continued retiring with the same pace, it means that 4.800 persons have retired until 2012 and 3.150 more until 2015. In total, 11.550 people have retired from the public sector between 2005 and 2015. Therefore, it means that at least 36.150 persons must have been employed from 2005 to 2015 in order to attain the total number of 129.000 employees in 2015, is stated in CCM’s analysis (page 15).

The growth of the public sector continued and reached 129.653 employees in 2016, according to the Register of Employees in the Public Sector, drawn up by the Ministry of Information Society and Administration. In this way, over the course of the “renaissance”, more than 30.000 have been employed in the public sector, comprised of 1.291 institution – ministries, municipalities, administrations, agencies, funds, bureaus, courts, educational, health, cultural, social institutions etc., according to the Law on Employees in the Public Sector.

However, state companies that are completely or partly owned by the state, such as AD ELEM, MEPSO, Macedonian Post, Macedonian Railways and others, which employ more than 30.000 people, are not part of the public sector. These state-owned companies employ more and more people each year, so the biggest one of them – ELEM, according to the data this company provided us with, the number of employees has increased from 3.800 in 2006 to 4.892 in 2016.

SUBSIDIZED EMPLOYMENTS IN THE PRIVATE SECTOR

Further, great deal of employments in the private sector during the past 10 years have been paid for from the budget. According to the World Bank report, 89 percent of the new workplaces have been created with fiscal incentive, exempting from paying social contributions and similar dues, which brings pension fund’s survival into question.

As the new government led by SDSM and Zoran Zaev reported, 25 foreign companies have received 225 million euros in the form of subsidies between 2007 and 2017, when VMRO-DPMNE was in power, with Gruevski as the PM for nearly 10 years. The fact that these companies employ 20.000 people, means that each of these employees “damaged” the state for 11.000 euros.

More specifically, Gruevski’s governments have spent 26 million euro for irreversible grants, 10 million for constructing the buildings, 14 million for creating new workplaces meaning that some of the companies have received 1.000 euros per workplace while others 11.000 euros. In addition to this, foreign investors have received 5 million euros for training of employees, meaning that some companies have received 100 euros, while others 3.000 euros per worker. The amount of tax and customs exemptions for that period is 69 million euros, sacrificed by the government for the sake of investors’ benefit.

Thus, it turns out that nearly one-third of the new workplaces have been created in the public sector and state-owned companies performing commercial activities. Plus, most employments in the private sector have been paid for from the budget, having in mind that 89 percent of the new workplaces have been opened thanks to fiscal incentive. What’s more, 25 foreign companies have received 225 million euros in the form of subsidies in just 10 years.

When it comes to the increase of the employment rate and creation of new workplaces, these facts and data should be known, because they point out that the government hasn’t created economic ambient that will naturally increase the employment rate and decrease the unemployment rate, but it has done so to the detriment of the budget, which proves to be unsustainable on the long run. Owing to the aforesaid, we consider Gruevski’s assertion regarding the employments in the Republic of Macedonia as complete truth spinning.

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