Number of jobless people could double or even treble, opinions

Together with the declaring of the state of emergency and the adoption of a number of measures, the number of the unemployed will double or even treble. Besides the fact that many business entities stopped work, for the salary earners with small pays it is more convenient to get fired and to receive unemployment benefit, which will be higher. In such conditions, the authorities should think now already where these persons out of work can be employed, including the citizens who return home, ensuring their re-qualification, said participants in a debate staged by the Institute for European Policies and Reforms, IPN reports.

Economist Marcel Spătari, director of Syndex Romania, said the salary earners ask to be sacked so that they could receive that unemployment benefit of 2,775 lei, which in practice is higher than that salary of 50% received in the case of technical unemployment. This is a strange situation as those who keep the job receive less money that the unemployed persons. This happens in the case of small salaries on paper on which the employer should also pay taxes. The jobless person gets 2,775 lei on which no taxes are paid.

The expert noted the number of jobless persons is expected to rise, but it is not clear why the Government allocates money for those who are out of work, but offers nothing to those who work. Those who didn’t work received unemployment benefit and will continue to receive it. But the authorities decided to direct the money not to those who work, but to those who do not work as it is hard now to estimate how many people work, what salaries they get and other aspects that can determine the impact. The Government decided to allocate 264 million lei for the unemployment benefit to a fund that during a year constituted 52 million lei. This amount of 264 million lei would have covered the technical unemployment for two months – the average salary for about 33,000 people.

Sergiu Sainciuc, vice president of the National Confederation of Trade Unions, said that 5-6% of the total number of officially registered jobless persons received unemployment benefit as they met the eligibility criteria. These were persons who had worked for 12 months during the past 24 years. Other persons didn’t get such benefit. About 2,000 applications for unemployment benefit were already submitted online to the National Employment Agency that registered about 1,000 unemployed persons by now. The Confederation received many complaints from people who say that they have to go on forced unpaid leave. Measures should be taken to support the businesses that, for their part, create and maintain jobs. Measures should be also taken to ensure the re-qualification of the unemployed. For the purpose, the education institution and companies should cooperate so that the unemployed are employed when the state of emergency is lifted.

Dumitru Vicol, emerging markets strategist at an American bank in London, said the post-crisis period could be very difficult, especially because no one knows when the crisis will end, for example, in May-June, or if the second wave of pandemic will follow. Amid the measures taken by the authorities, the extension of unemployment is forced as the people are motivated to tender their resignation and become unemployed so as to get that benefit of 2,775 lei.

According to the expert, the Government considers it is better to increase the number of the unemployed as the currently jobless persons will be joined by the citizens who return from abroad and this will be the most serious challenge. More than half of the Government’s efforts should be aimed at the post-crisis period as the unemployed should be employed somewhere. Therefore, the executive should come up with a clear recovery plan and say what the priority sectors are and channel financial resources to ensure the jobless are employed in these areas.

The debate titled “Impact of COVID-19 on the Republic of Moldova: How can we ameliorate situation of salary earners in the period of crisis?” was organized by the Institute for European Policies and Reforms with support from the Hanns Seidel Foundation.

Note: The Constitutional Court suspended the law adopted by the Government by assuming responsibility for it bypassing Parliament. The law contains a number of measures to support the citizens and business during the state of emergency. The announcement was made by Prime Minister Ion Chicu in a press briefing.

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