The Labour Divide | Page 7

through stock options schemes to the workers). In return, the trade
unions will be granted effective control of the shop floor. This is the
neo-corporatist approach. It means that the tripartite social contract will
increase employment by moderating wage demands but the unions will
control policies regarding unemployment insurance, employment
protection, early retirement, working hours, old age pensioners, health
insurance, housing, taxation, public sector employment, vocational
training, regional aid and subsidies to declining and infant industries. In
Sweden and Germany there is co-determination. Workers have a
quasi-constitutional shop floor representation even in non-wage related
matters (such as the work organization).

Many countries instituted an “Incomes Policy” intended to ensure that
employers, pressurized by unions, do not raise wages and prices. In
Sweden, for instance, both labour and management organizations are
responsible to maintain price stability. The government can intervene in
the negotiations and it can always wield the whip of a wage freeze, or
wage AND price controls. In Holland the courts can set wages. Wages
and unemployment benefits are perceived as complementary economic
stabilizers (contra the business cycle).
Another possibility is a Guaranteed Wage Plan – Employers assure
minimum annual employment or minimum annual wages or both to
those employees who have been with the firm for a minimum of time.
Firms and trade unions must forego the seniority treatment (firing only
the newly hired – LIFO, last in first out). The firm should be given a
free hand in hiring and firing its employees regardless of tenure.
Labour Disputes Settlement
The future collective agreements should all be subordinated to the
National Employment Contract. All these agreements should include a
compulsory dispute settlement through mediation and arbitration. All
labour contracts must include clear, compulsory and final grievance
procedures. Possibilities include conciliation (a third party bring

management and labour together to try and solve the problems on their
own), mediation (a third party makes nonbonding suggestions to the
parties) and arbitration (a third party makes final, binding decisions), or
Peer Review Panels – where the management and the employees
together rule on grievances.
I recommend allowing out of court settlement of disputes arising from
the dismissal of employees through arbitration, an employees' council,
trustees or an employer-employee board.

Unconventional Modes of Work
Work used to be a simple affair of 7 to 3. It is no longer the case.
In Denmark, the worker can take a special leave. He receives 80% of
the maximum unemployment benefits plus no interruption in social
security providing he uses the time for job training, a sabbatical or
further education, or a parental leave. This can be extended to taking
care of old people (old parents or other relatives) or the terminally ill –
as is the case in Belgium (though only for up to 2 months). It makes
economic sense, because their activities replace social outlays.
In Britain, part time workers receive the same benefits in case of
layoffs and wrongful dismissals and in Holland, the pension funds
grant pensions to part time workers.
Special treatment should be granted by law and in the collective
agreements to night, shift and weekend work (for instance, no payment
of social benefits).
All modes of part-time, flextime, from home, seasonal, casual and job
sharing work should be encouraged. For example: two people sharing
the same job should be allowed to choose to be treated, for tax purposes
and for the purposes of unemployment benefits, either as one person or
as two persons and so should shift workers. In Bulgaria, a national part
time employment program encouraged employers to hire the
unemployed on a short term, part time basis (like our Mladinska
Zadruga).
Macroeconomic Policies
The macroeconomic policies of Macedonia are severely constrained by
its international obligations to the IMF and the World Bank. Generally,
a country can ease interest rates, or provide a fiscal boost to the
economy by slashing taxes or by deficit spending. Counter-cyclical

fiscal policies are lagging and as a result they tend to exacerbate the
trend. Fiscal boosts tend to coincide with booms and fiscal contraction
with recessions. In view of the budget constraints (more than 97% of
the budget is “locked in”), it is not practical to expect any employment
boost either from the monetary policy or from the fiscal policies of the
state in Macedonia.
What I do recommend is to introduce a “Full Employment Budget”
(see details in Appendix number I). A full employment budget adjusts
the budget deficit or surplus in relation to effects of deviations from full
or normal unemployment. Thus, a simple balanced budget could be
actually contractionary. A simple deficit may, actually, be a surplus on
a full employment basis and a government can be contractionary
despite positive borrowing.
Apprenticeship, Training, Retraining and Re-qualification
The law should be amended to allow for apprenticeship and training
with