The Labour Divide | Page 8

training sub-minimum wages. Mandatory training or
apprenticeship is a beneficial rigidity because it encourages skill
gaining. Germany is an excellent example of the benefits of a
well-developed apprenticeship program.
Most of the unemployed can be retrained, regardless of age and level of
education. This surprising result has emerged from many studies.
The massive retraining and re-qualification programs needed to combat
unemployment in Macedonia can be undertaken in collaboration with
the private sector. The government will train, re-train, or re-qualify the
unemployed worker – and the private sector firms will undertake to
employ the retrained worker for a minimum period of time following
the completion of his or her training or retraining. Actually, the
government should be the educational sub-contractor of the business
sector, a catalyst of skill acquisition for the under-capitalized private
sector. Small business employers should have the priority in this
scheme.
There should be separate retraining and re-qualification programs
according to the educational levels of the populations of the trainees
and to the aims of the programs. Thus, vocational training should be
separated from teaching basic literacy and numeracy skills.
Additionally, entrepreneurship skills should be developed in small
business skill training programs and in programs designed to enhance

the management skills of existing entrepreneurs.
All retraining and re-qualification programs should double as advisory
services. . The instructors / guides / lecturers should be obliged to
provide legal, marketing, financial, sales-related or other consulting.
Student who will volunteer to teach basic skills will be eligible to
receive university credits and scholarships.
Entrepreneurship and Small Businesses
Small businesses are the engine of growth and job creation in all
modern economies. In the long run, the formation of small businesses
is Macedonia’s only hope. The government should encourage the
provision of micro-credits and facilities to set up small and home-based
businesses by the banking system. In the absence of reaction from or
collaboration with the banking system, the state itself should step in to
provide these funds and facilities (physical facilities and services –
such as business incubators).
Thus, the state should encourage small businesses through microcredits,
incubators, tax credits, and preference to small businesses in
government procurement.
II. The Facts
Labour Mobility, Unemployment Benefits and Minimum Wages
We are all under the spell of magic words such as “mobility”,
“globalization” and “flextime”. It seems as though we move around
more frequently, that we change jobs more often and that our jobs are
less secure. The facts, though, are different. The world is less
globalized today than it was at the beginning of the century. Job tenure
has not declined (in the first 8 years of every job) and labour mobility
did not increase despite foreign competition, technological change and
labour market deregulation. The latter led to an enhanced flexibility of
firms and of hiring and firing practices (temporary or part time workers)
but this is because many workers actually prefer casual work with
temporary contracts to a permanent position. Granted, people have been
and are moving from failing firms and declining industries to
successful ones and booming sectors. But they are still reluctant to
change residence, let alone emigrate. Thus, jobs remain equally stable
in deregulated as in regulated labour markets. Yet, this phobia of losing
one’s job (arising from the aforementioned erroneous beliefs) serves to
increase both the efficiency and productivity of workers and to

moderate their wage claims. It is safe to assume that collective
bargaining led to increased wages and, thus, to less hiring and less
flexible labour markets. It is therefore surprising to note that despite the
declining share of unionized labour in two thirds of the OECD
countries – unemployment remained stubbornly high. But a closer look
reveals why. Both France and the Netherlands (where unionized labour
declined from 35% of the actually employed to 26%), for instance,
extended the coverage of collective agreements to non- unionized
labour. It is only where both union membership and coverage by
collective agreements were both reduced (USA, UK, New Zealand,
Australia) that employment reacted favourably. Thus, at the one
extreme we find the USA and Canada where agreements are signed at
the firm or even individual plant level. At the other pole we have
Scandinavia where a single national agreement prevails. All the rest are
hybrid cases. Britain, New Zealand and Sweden decentralized their
collective bargaining processes while Norway and Portugal centralized
it. The evidence produced by hybrid cases is not conclusive.
Decentralized bargaining clearly reduced wage pressures but
centralized bargaining also moderated wage demands (union leaders
tended to consider the welfare of the whole workforce. Still, it seems
that it is much preferable to choose one extreme or the other rather than
opt for hybrid bargaining. The worst results, for instance, were obtained
with national bargaining for specific industries. Hybrid Europe saw its
unemployment soar from 3 to 11%