'First Job' programme seeks to prevent youth unemployment
Unemployment among young people in Poland is three times higher than the average rate, which is itself high. In order to address the problem and seek to prevent youth unemployment, in June 2002 the government launched a new programme, 'First Job', whose aim is to enable young people entering the labour market to acquire their first work experience.
According to data from the Polish Official Statistics (Główny Urząd Statystyczny, GUS), the unemployment rate has been gradually rising over the past few year, reaching a record high of 20.3% in the first quarter of 2002. The rate then fell to 17.2% in May, before rising slightly again to 17.3% in June. In the first half of 2002, some 3.1 million people were unemployed.
The problem of youth unemployment is even more acute, with the unemployment rate among those aged between 15 and 24 standing at 45.5% at the end of the first quarter of 2002. Over recent years, the situation of young people on the labour market has been deteriorating dramatically: in 1998 the unemployment rate for the 15-24 age-group stood at 25.6% in 1999, rising to 29.9%, 41.2% in 2000 and 41.1% in 2001. The two key factors in this rising unemployment are: first, economic stagnation, which in 2002 will result in Gross Domestic Product growth of under 3% according to government predictions ( independent experts are less optimistic – they forecast that growth will not exceed 2%); and second, the entry into the labour market of age cohorts born in the demographic explosion of the first half of the 1980s - the Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Społecznej, MPiPS) estimates that in 2002 about 1 million young people will leave post-grammar schools, and around 360,000 of them will register as job-seekers.
In searching for their first job, young people more and more frequently find themselves in a vicious circle, arising from two intertwined factors: their lack of work experience does not allow them to take on a job; and their failure to find employment does not provide them with any experience. The lower a young person's educational background, the harder it is to find a job. Graduates of vocational schools are in the worst situation, whereas those with a higher educational background are in the best position in relative terms, although higher education no longer guarantees employment.
In a search for adequate solutions to these problems, the Ministry of Labour and Social Policy has formulated a programme to stimulate employment for young people, known as First Job (Pierwsza praca). The programme consists of five components:
- small and medium-sized enterprises will employ young people, with the government assisting the employers, refunding these employees' pay and social insurance contributions. The programme also involves training for school leavers (with 'assistants' receiving a 'scholarship' from the relevant labour office), 'socially useful' work in the form of public works (with employers entitled to a refund on pay and contributions up to a specific amount), loans for creating new jobs, and special programmes for the groups facing an impending threat of unemployment;
- self-employment will be encouraged among young people through streamlining the procedures for establishing an enterprise, the provision of cheap credit and guarantees, and the possibility of a temporary suspension of payment of pension and disability pension contributions;
- education and training measures include schooling in entrepreneurial skills, continuing education (organised by labour offices) and initiatives in schools to promote employment (the creation of 'professional careers offices');
- voluntary workers will be taken on within both non-governmental organisations and the public administration; and
- information, vocational guidance and employment services will be provided by the Information and Professional Career Planning Centres (Centra Informacji i Planowania Kariery Zawodowej), at the regional (voivodeship) level and in selected local authorities (gminas), and by labour offices (pending the process of 'de-bureaucratisation').
The period of financial support varies, depending on the form of employment stimulation (and on whether it is combined with salary payment), between six and 12 months.
The significance of this programme is demonstrated by the amount of money allocated for it, which is PLN 1 billion. The financial means will be drawn partially from the Work Fund (PLN 154 million), and partially from other earmarked funds, the 'enfranchisement reserve' and foreign aid.
First Job was launched officially in Cracow on 3 June 2002. The Minister of Labour, Jerzy Hausner, also travelled to various parts of the country and met representatives of local communities. Local programmes are to be formulated locally, ie they will be prepared by labour offices at the higher local government (poviat) level, which will allow for the adoption of the solutions that best recognise the needs of a given area. In order to disseminate information on the First Job programme as widely as possible, the Ministry has created a special website.
However, apart from a variety of advantages, some commentators state there a number of defects in the programme. The greatest perceived disadvantage is the fact that the employment contracts provided for by First Job are for a specified time. Critics argue that after this period ends the employer can dismiss a person employed on the basis of the programme and in their place employ another school-leaver, thus continuing to receive the government refund.
A former Minister of Labour, Michał Boni, in an interview with the daily newspaper, Rzeczpospolita, both supported the general idea of the programme and claimed that the programme had failed to engage schools in its initiatives, although it is schools that should provide their students with appropriate knowledge of the reality of labour market. Moreover, he pointed out that the introduction of the First Job programme has not been harmonised with other initiatives to stimulate the economy, as a legislative package aimed at supporting small and medium-sized enterprises (First, Entrepreneurship) had not yet been enacted by the main chamber of parliament (the Sejm). Mr Boni also expressed his anxiety as regards public employment agencies, which he stated seemed unprepared for the new challenge of active prevention of unemployment.
In late July 2002, after only one-and-a-half months of operation, it is too soon to evaluate the First Job programme's effectiveness. However, it should be noted that it is the first institutionalised and national-scale attempt at solving the problem of unemployment in Poland.