Q> Can you clarify the syntagma “flexibilization of the labour market” which in the last little while is often used in the explaining of changes to labour legislation, to the status of employed and unemployed persons?

A> The socialist system from which we emerged some 12 years ago did not have a flexible labour market. It was considered normal to expect that once you came to a work place that you would wait out your pension at the same place. Mobility was very restricted even within the organization itself, which can even be felt now. (Recently, I was in court as an employer because one of my employees had accused me of relocating her from one position to another within the same department without, according to her, suitable argumentation).

We can no longer produce in the same way as it was done in the Sixties in the last century. The need for constant changes within the structure of production demands a great adaptability to changes on the part of employees, readiness for continuous acquisition of new knowledge and skills, changing professions even several times in a lifetime. This is achieved with more difficulty here because of the inherited habits from socialism. One looked at a company and then at the state as being responsible for the securing of a normal wage for the worker, for the right to work, for a flat, for inexpensive public utilities, for health insurance. The state today has to create an environment in which individuals, companies and all actors on the market are enabled to invest in themselves, for the formation and development of companies with fewer costs, for people to be further educated in accordance with changes in the demands of the labour market.

Q> What is the role of the state and public services, legislation in this? How much of what we call the institutional framework shows up as an obstacle to these changes?

A> Institutional changes are key for the achievement of the most basic of goals - for Croatia to become a prosperous country. In this lies the state’s greatest responsibility. Institutions are a stage on which those transactions between individuals and companies, but also organizations and cultural institutions, are played out on an economic plan. They are all actors in the same drama of development. How much the institution is efficient, is how much those same actors are freer to develop relations with others and their own “style of game”.

Q> It is no longer possible to retain the status of an unemployed person with just one regular monthly reporting to the Croatian Employment Bureau’s register of unemployed?

A> On the Croatian labour market we have a relatively small demand for workers but a fairly large proffering of work. In that type of situation it was only natural that competition between the people seeking employment be developed. However, in the minds of the majority what remains is the notion that they only need “to stand in line” and a job will come eventually, regardless of the type of knowledge and skills someone possesses. Something needs to be changed in this, but with our help. No one can come to a position if one does not actively search for it and if one does not work on one’s own skills which are in demand in today’s labour market. The idea that someone who has a long history of work experience can do everything within the framework of his or her profession is erroneous. On the contrary, if you have 20 years of work experience, the greater the chance that your skills are no longer in demand to anyone and that you are not even aware of this.

Q> Let’s picture one optimistic scenario of reforms to the Croatian labour exchange and changes to the behaviour of unemployed persons by which they upgrade their skills according to the new demands of the labour market, by maximally using state incentives. What if this is not accompanied by an increase in demands to the labour market?

A> There is truth in that; developing one institution while nothing else changes is a completely futile activity. Just as the Croatian Employment Bureau is changing, so will other institutions change. That is a process that requires time in all transitional countries. For example, changes that are being carried out at the Croatian Employment Bureau were not adopted by all employees even within the Bureau itself. We set up an entirely new service of trainers who would make the rounds to all the regional services and branch-offices and help in the introduction of new work methods.

Q> Croatia falls in the category of countries with high levels of unemployment, and according to the statistics from the State Statistics Bureau it is currently at 21,7%.

A> The 21,7% stems from our legislature which has a different measure for unemployment: everyone who came to report to the labour exchange had to be registered as being unemployed, unless he or she was an owner of a firm, a student or similar. The unemployment rate in Croatia is calculated according to international standards, that is, on the basis of work force questionnaires it comes to 15,2%. This method which is applied in all transitional countries includes only those persons who are actively seeking work and are available to work as being unemployed.

Nevertheless, what also needs to be said here is that the rate even calculated in this manner within the group of transitional countries is still very high. I believe that only former East Germany, Romania and Bulgaria have a higher rate. Other countries, on the other hand, have surprisingly low rates of unemployment. It’s incredible that one Czech Republic has a lower rate of unemployment than Germany.

What this indicates then is that it is a very unreliable statistic and everyone has noticed that the unemployment rate is no longer an adequate measuring mechanism. One other indicator is being used all the more frequently, and that is the ratio of the number of people employed in proportion to the number of working-age people from 15 to 64 years of age. This ratio speaks of the employment rate and not the unemployment rate. (The unemployment rate is measured in such a way so that the unemployment number is placed in proportion with the sum of employed and unemployed persons who form the labour force.) The goal for the European strategy for employment is to reach an employment rate of 70% by 2010. That means that 70% of working-age persons from 15 to 64 years of age should be employed in the year 2010. This goal was set up as the result of coming to the awareness that only through work is value created not only for society but for the individual as well and that social exclusion can best be solved so that people become involved in the world of work, in all socially useful activities. This is a goal that we should have as well. Our employment rate here is around 58%. In Europe the employment rate is currently 63%.

Q> How much can the unemployed be characterized as an underprivileged social group?

A> These are people for whom access is made impossible to the many goods available to those employed. Unemployed persons cannot obtain bank loans, and long-term unemployment affects the loss of acquired skills and the decrease in the abilities to acquire new ones. All this has an effect on the loss of self-confidence which is one of the hardest consequences of unemployment. Work on regaining self-confidence with unemployed persons through special workshops is fast becoming one of the most significant functions of our Bureau. In the West this is called “activation”. Studies have shown that subsidies (subsidised employment, subsidised education) are often less successful than processes of activation. Subsidies benefit the employer, while activation benefits the one who is unemployed. If we succeed with activation, subsidies will not be necessary. For this we would need at least double the amount of people in the Bureau and in private institutions involved in mediating employment.

Q> Which groups among the unemployed are in the most difficult position?

A> Youth and young people are discriminated because a large number of them appear simultaneously on the market and because they do not have the chance to attain their first work experience. If the state of waiting continues for some time, they will later find it difficult to become integrated in the working world. Perhaps the most discriminated persons are those with some form of handicap. No law exists which would protect them as in the majority of countries in the world. Another group is older workers who have work experience but shortage of skills. They encounter discrimination towards their age which is very much present in the labour market.

The Bureau offers subsidies for the employment of persons from these categories, but this is not enough. In the employing of persons otherwise difficult to employ what is key is trust on the part of the employer. The employer needs to trust that we will make such a selection of a person with limited capabilities who will achieve optimal productivity in the required tasks.Ý

On the Croatian labour market we have a relatively small demand for workers but a fairly large proffering of work. In that type of situation it was only natural that competition between the people seeking employment be developed.

Perhaps the most discriminated persons are those with some form of handicap. No law exists which would protect them as in the majority of countries in the world.

date> March 18, 2003  interview by> Momo Kuzmanović  photo> Dejan Janković