Government to put employment policy focus on training

The Minister of Labour and Social Policy recently announced that, in 2008, the Bulgarian government will change its labour market policy focus from subsidised employment to further qualification and vocational education. The announcement was made in the minister’s report on activities over the two-year period that she has been in power so far. The decision has been attributed to the low level of unemployment, which reached 6.9% in August 2007, and the low educational and professional level of those registered as unemployed.

In August 2007, the Minister of Labour and Social Policy, Emilia Maslarova, presented the report on activities for the last two years (in Bulgarian, 101Kb PowerPoint presentation). In the report, the minister outlined the main successes and challenges in the field of labour market and social policy in Bulgaria, and announced a policy shift planned for 2008, as detailed below.

Labour market situation

Minister Maslarova contends that the labour market has performed more favourably due to the government’s active labour market policy, which introduced new measures aimed at boosting employment and reducing unemployment. This position is underlined by the improvements in the following key labour indicators in the second quarter of 2007 compared with the same period in 2005:

  • a 3.5 percentage point increase was recorded in the employment rate among the population aged 15–64 years, thereby reaching a total rate of 55.4%;
  • 241,000 people found employment through the National Employment Agency (Агенция по заетостта) branches;
  • 14 new employment and vocational training programmes were introduced;
  • 10,000 new state subsidised jobs were created by local enterprise;
  • 6,600 persons with disabilities were employed;
  • the number of unemployed people declined by 32.2%, with the unemployment rate decreasing from 10.77% to 7.06%, the lowest rate since 1991;
  • 52% of those registered as unemployed have been included in employment and training programmes and measures.

Skills deficit remains

Despite the positive change in the labour market, Minister Maslarova emphasised that some further challenges required an adequate response, such as the:

  • increasing shortage of skilled workers;
  • persistent long-term unemployment of unskilled and lowly educated persons, who represent 46% of all those registered. Some three quarters of young people aged up to 29 years have no professional skills;
  • very low participation rate in lifelong learning, amounting to 1.3% of the population aged 15–64 years.

New policy focus

The Bulgarian government has thus decided to revise its labour market policy, discarding previous efforts to provide subsidised employment to unskilled jobless people. Under the existing job creation programmes, worth BGN 190 million (€97 million as at 31 October 2007) in 2007, companies are reimbursed by the government for minimum wage and social security and training costs for any unemployed persons they hire. The programmes envisaged for 2007 are expected to create jobs for 82,000 people, including 31,000 unemployed people who must undergo vocational training. However, the government plans to reverse this ratio in 2008. Instead, most of the resources will be allocated to vocational training, career counselling and internship programmes.

The new approach focuses on the supply side policy, opting to invest in various training initiatives. Minister Maslarova stated that the policy shift is a response to the changing labour market situation characterised by a low unemployment rate and a high proportion of registered unemployed persons with low educational and professional levels.

Reaction of social partners

Social partnership has played a significant role in the formulation and implementation of employment policy measures. The social partners are committed to the labour market policy improvements and are ready to support all reasonable policy initiatives. The employer organisations welcomed the new policy focus; in their opinion, the existing subsidised employment creation programmes had run their course. The employers supported the new policy orientation as companies are currently experiencing a shortage of qualified workers.

Trade union confederations also reacted positively, assessing the new policy approach as being in line with their own strategy; the latter was expressed recently in their Memorandum on social and economic development until 2010 and in the Pact on economic and social development 2006–2009 (314Kb Ms Word doc), which was concluded with the government (BG0609029I). The trade unions also emphasised the need for more proactive employer policies focused on lifelong learning and vocational training in enterprises.

Nadezhda Daskalova, Institute for Social and Trade Union Research

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