New agreement to boost youth employment

Bulgaria’s government has made helping young people to find jobs a priority with the First Job National Agreement, signed in June 2012 by ministers and representatives from employers’ associations and trade unions. The aim is to create more jobs for young people and cut youth unemployment by at least 5% by the end of 2013. With youth unemployment topping 30%, the agreement’s signatories have pledged to work together to help young people make the transition from education to work.

Background

On 6 June 2012, the government and social partners signed the First Job National Agreement (in Bulgarian, 205Kb PDF) which is part of a national initiative called Jobs for Young People in Bulgaria 2012–2013. The agreement aims to create new opportunities for young people in the labour market and to provide employment for at least 22,000 of them, reducing the youth unemployment rate by 5%.

The government and its social partners have become increasingly concerned by rising levels of youth unemployment, which recently topped 30%. The statistical data indicate that young people face specific difficulties in finding their first job. The mismatch between the qualifications of young people and labour market needs, structural economic shifts and the erosion of public spending on integrated pro-employment strategies are among the main causes of youth unemployment. The situation is further aggravated by the worldwide economic crisis.

It is against this background that the government and national representative organisations of employers and employees have made the commitment to cooperate on initiatives to support the integration of young people into the labour market. They want to provide more opportunities for young people to gain work experience and have pledged to help them make the transition from education to work.

Main points of agreement

Social partner commitments

Social partners will contribute to the implementation of the agreement, through:

  • dissemination of information on the existing opportunities for youth employment, including programmes laid out in the appendix to the agreement (in Bulgarian, 180Kb PDF);
  • encouraging employers to recruit young people on labour contracts (in permanent jobs, internships and temporary work), providing opportunities to acquire initial work experience after leaving education;
  • participation in the review of the existing legislation and implemented programmes, and proposing changes to promote youth employment.

Government responsibilities

Ministries will support the implementation of the agreement by:

  • promoting opportunities for youth employment, including hiring on subsidised jobs young people under the programmes and measures outlined in the agreement’s appendix;
  • developing new initiatives to increase youth employment using additional funding from the state budget and European funds.

The Ministry of Labour and Social Policy ( MLSP), through the National Employment Agency, will also be expected to provide information, advice and professional guidance to young people, and will organise job fairs.

Wages of the employed youth and social and health insurance contributions normally paid by the employer will be financed from the state budget for programmes funded by the European Union, or by means of the employer.

Eight ways to boost youth employment

The agreement includes a plan for eight programmes and initiatives for young people to be funded under the national action plan for employment and the Operational Programme ‘Human Resources Development’ 2007–2013 (1.8Mb PDF). These include the ‘New start’ (an apprenticeship programme), ‘First job’, ‘New job’, ‘Development’, and ‘Start of career’ programmes, as well as subsidised schemes encouraging employers to hire the young unemployed.

Reactions

Bulgaria’s Prime Minister, Boyko Borisov, said: ‘The support of employers and trade unions for this initiative is very important.’

The Minister of Labour and Social Policy, Totyu Mladenov, added:

With this agreement we express our joint commitment that finding work for young people will become a priority. Our aim is to ensure that at least 22,000 young people are recruited in new jobs by the end of the programme in 2013.

Trade unions and employers are even more worried about the situation, with some claiming youth unemployment is still being underestimated and in reality is nearer to 50%.

The social partners’ estimates are based on the national sociological surveys and the latest national statistics data for the first quarter of 2012, showing that unemployment among those aged 15 to 24 years is 31.4%, and 14.7% for those in the 25–34 age bracket. It is also thought there could be as many as 95,000 young people who are not actively seeking work.

The Vice-President of the Bulgarian Industrial Association ( BIA), Dimitar Brankov, commented that the present agreement is a good first step but is far from being a real solution. He says finding a long-term solution for the problem would be possible only with changes to the Labour Code making it easier to dismiss workers of retirement age and expanding the opportunities for hiring temporary agency workers.

The President of the Bulgarian Industrial Capital Association ( BICA), Vasil Velev, said:

In our view the measures proposed will have real and prompt results. However, we would like to stress that solving the problem comes through economic growth, which requires a better business environment and increased investment.

Meanwhile, the President of the Confederation of Independent Trade Unions in Bulgaria ( CITUB), Plamen Dimitrov, said that if Bulgaria was to reverse the sharp decline in youth employment it must:

...put emphasis on macroeconomic and sectoral policies that stimulate demand and create jobs as well as on policies that ensure equal rights for young people and secure jobs.

The President of the Confederation of Labour ‘Podkrepa, Konstantin Trenchev, said the programme would encourage self-realisation among young people in Bulgaria and integration into the labour market and society, helping solve the demographic crisis.

Commentary

Integrating young people into the labour market and boosting productive youth employment is a challenge. It may require changes in public policies such as the promotion of better qualifications and skills to match labour market needs, improved access to job offers and apprenticeship schemes, as well as a greater co-operation and shared responsibility between the government, employers and trade unions.

Against this background the First Job National Agreement looks like a promising first step in addressing the issue.

Nadezhda Daskalova, ISTUR

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