Výhrady voči vytváraniu tzv. sociálnych podnikov
uviedol pre The Slovak Spectator dňa 4.5. 2009 Radovan Ďurana z INESS.
AN INCREASING unemployment rate is not the only problem in
Slovakia’s labour market. Along with low geographical mobility and insufficient
life-long education, Slovakia suffers from long-term unemployment, when people
remain without a job for months or even years and begin to lose their working
habits. Some of these unemployed have lost their motivation to work and
companies are not often prone to seek out such people as their working
behaviour is unpredictable or unknown. Now, with the impacts of the global
economic downturn making Slovak employers more cautious, it is even more
difficult for the long-term unemployed to find work.
One possible way to help these people in rebuilding their
working habits and bringing them back into the pool of people able to work is
to launch social firms. The purpose of these firms is to create employment for
marginalised and disadvantaged people and to help them to integrate socially as
well as economically. Slovakia already has some experience with supported employment
and the government has intensified support for such programmes because of the
economic downturn.
“A huge problem for the Slovak labour market is the
perception of unemployment as something normal and not something that a person
should feel ashamed of – an impetus to seek not being unemployed,” Michal
Páleník, the project manager at the Employment Institute, a non-profit,
non-governmental organisation, told The Slovak Spectator. “This is a
sociological problem when there are some villages in which those who work are
considered abnormal and those who do not work are thought to be normal. This is
certainly not good.”
At the end of March, a total of 110,767 Slovaks had been
without a job for more than one year, according to statistics from the National
Labour, Social Affairs and Family Office (ÚPSVAR). This meant that one-third of
the unemployed in Slovakia had been jobless for one year or more. Compared to
the end of 2008, this was an increase of 2,470 persons.
Of the total number of long-term unemployed, ÚPSVAR
registers 52,564 of them as having been without a job for more than four years.
The highest number of jobseekers failing to find work for
more than 12 months, along with the highest current jobless rates, is in
eastern and central Slovakia. In March, the largest number of long-term
unemployed was in Košice Region, accounting for 27,186 of the 62,072 jobseekers
in this region. Banská Bystrica Region followed with 26,832 persons without
work for more than 12 months out of a total of 59,463 unemployed, and Prešov
Region had 26,759 long-term unemployed out of 65,841 jobless people.
In all other regions of Slovakia – except Nitra Region,
where the long-term unemployed remained at 11,560 people – fewer than 10,000
people had been without a job for more than 12 months. Bratislava Region
registered the lowest number of long-term unemployed, with 1,430 persons.
Social firms
The task of social firms is to create an ‘interim’ labour
market in which those who are socially disadvantaged with low labour productivity
can find a job, because in the formal labour market they have little chance to
do so, Páleník told The Slovak Spectator. In a social firm they can learn or
re-learn working habits or gain some current work experience.
But there is a danger that social firms may unfairly compete
against employees and employers in the regular labour market.
“Social firms cannot ‘steal’ workers from regular
companies,” Páleník said. “They must focus on disadvantaged persons in whom
regular companies are not interested. They must not sell their products at a
discount and thus push other companies out of the market. There is a risk that
when such firms are subsidised they might produce more cheaply than companies
operating within the normal business environment.”
Ideally, they also should not operate in the same market
with normal companies.
“For example, when there is a locksmith in a village it is
nonsense to place a social firm there employing locksmiths,” said Páleník. “If
social firms operate in such a way that they liquidate other firms they will
change nothing in the labour market.”
In general, social firms should employ people for whom there
is no demand in the regular labour market and they should manufacture products
or provide services which cannot be sold at prices that compete with the prices
of a commercial company, said Páleník.
Social firms are not expected to generate profit or, when
they do, it should be re-invested into their further development or their
employees.
While social firms are sometimes considered ‘expensive
affairs’, Páleník of the Employment Institute thinks that the expenditure for
such firms should be compared with the amount that one unemployed person costs
the state.
“One jobless Slovak costs the state €350 monthly,” said
Páleník.
When calculating budgets for social firms, the Employment
Institute regards social firms’ expenditures as a mid-term investment, for
example for three years. Thus expenditure of €12,500 for one person trained and
employed in a social firm is advantageous for the public finances.
The concept of social firms has been known abroad for years,
according to Páleník. Slovakia already has some experience from when it
launched a model of supported-employment agencies which focused primarily on
helping disabled people. After the source of funds dried up, this model
disappeared.
According to Páleník, both supported-employment agencies and
social firms need a certain amount of subsidy because such an entity is always
‘starting over again’. A social firm cannot develop and retain its own labour
force because the principle of the social firm is to employ and train people:
when they learn how to work and get some good working habits and skills, they
must leave the social firm and make their own way in the labour market.
State support to
social firms
The government of Prime Minister Robert Fico, which also
views social firms as a tool to fight the impacts of the crisis, has approved,
within its crisis packages, measures to support employment of disadvantaged
jobseekers in social firms.
These firms should address regional unemployment differences
through an easing of the legislative requirements for creating social firms,
according to Barbora Petrová, spokesperson of the Ministry of Labour, Social
Affairs and Family.
For example, within the adopted crisis measures, social
companies are not now obliged to show that they have used 30 percent of their
net earnings for the creation of new work positions. Moreover, municipal
bodies, other local administration bodies and their organisations are no longer
bound to the minimum limit of 30 percent of the jobs in social firms being
filled by disadvantaged job-seekers.
The ministry hopes that social firms will employ 10,000
people annually. In 2009, the average annual state contribution for each position
in a social firm is €3,303, while the total funds approved for the measure are
€33 million. In 2010, the annual subsidy for each job position will increase to
€5,102 with a total budgeted amount of €61.3 million. Additional state funds
are allocated to help social firms cover the costs of training. The allocated
sum amounts to €70.2 million for 2009; next year this will decrease to €64.6
million.
Eight pilot social firms were established last year. They
have so far received €5.4 million in advance payments, according to Petrová.
These measures have already attracted some criticism.
Critics view the social firms as non-transparent, expensive and not
accomplishing their primary tasks.
“The social firms
mostly operate in areas already occupied by private investors,” Radovan Ďurana
of the Institute of Economic and Social Studies (INESS), an economic think
tank, told The Slovak Spectator. “A subsidy for jobs in social firms creates
artificial competition for these private companies which, de facto, endangers existing
jobs, particularly in areas of production with lower added value.”
Ďurana also thinks
that social firms motivate state or local authorities to engage in business
even though they often have no business experience. Moreover, he thinks that
engaging in business should not be within the remit of the public
administration. He warned that easing the conditions for the launch of social
firms could be at odds with the original idea behind them.
“It is possible to
solve the problem of employment of disadvantaged people more effectively, for
example by reducing the payroll taxes of such employees,” Ďurana said.
The
Slovak Spectator, 4 May 2009 Jana Liptáková Career and HR
