70,000 Belarusians lost work last month

The number of dismissals sharply increased in March.

Those who lost jobs have problems with finding a new one, so many of them are likely to be labelled as “social parasites”. Why does the Belarusian state punish people suffering from economic problems instead of protecting them?

Why was the ordinance on “social parasitism” adopted during the wave of layoffs and unemployment growth?

According to official statistical data, the number of dismissals is growing in the country: 66,900 people lost their jobs in March. As many as 53,200 Belarusians were laid off in February, Yezhednevnik writes.

The forecast of the Ministry of Labour and Social Protection that the tendency of the unemployment growth will change in spring as demand for seasonal workers will appear hasn't come true. Agricultural companies really need more workers, but their activity is unable to cover the number of mass layoffs at industrial plants and factories, where almost 17,000 people were dismissed in the last month.

Some plants that don't dare lay off employees just don't pay them wages. As many as 518 companies owe wages to their workers now, while their number in February was 277. As of April 1, 90,000 workers in the country didn't receive wages.

The number of employees working part time increased threefold in comparison to last year.

To lay off or not to lay off?

The World Bank released a note focusing on Belarus' labour market.

The World Bank thinks enterprises should cut staff to be able to survive in conditions of a decline in production and shrinking markets. Costs of preserving unproductive jobs increase in a difficult economic situation.

“About two-thirds of wage earners in Belarus work at state-owned enterprises (SOEs). Firm-level econometric evidence1 suggests that Belarus SOEs have about 10 percent more employees than they need,” experts of the World Bank think.

On the other hand, if all excess workers are laid off, the unemployment rate could shoot up by 4.2%, according to the World Bank.

The state faces a dilemma: to allow loss-making enterprises to lay off workers or to continue subsidising jobs it doesn't need.

The World Bank proposes that the state help unemployed people instead of shifting its social function onto enterprises. The measures should include unemployment assistance for a limited period, job-search assistance, training, employment incentives and entrepreneurship programmes.

Fines instead of assistance

The state is going to issue fines to laid off people instead of helping them. The ordinance on “social parasitism” came into force in 2015 amid crisis.

If a laid off worker cannot find a new job and remains a “social parasite” for six months, he will have to pay 20 basic amounts (3.6 million rubles) in 2016.

This “protection” of people suffering from economic problems look strange for the state that declares itself “social” in the Constitution. Economist Siarhei Chaly draws attention to this fact in his programme Economics in Layman's Terms.

Don't make people go to plants

The expert says the law on social parasitism was invented by the authorities in other economic conditions to solve the old problems that we don't have now.

Aliaksandr Lukashenka ordered the government to prepare a law on social parasitism in October 2014 at a meeting to discuss employment and migration. The main problem discussed at the meeting was a decrease in labour force. There were not enough workers, and the number of vacancies exceeded the number of officially unemployed people.

According to Siarhei Chaly, the problem began to worry the president even earlier – amid scandals over the modernisation of wood processing plants, when workers were quitting plants during the upgrading period due to low wages. It made the ruler think how to keep workers at plants (later ordinance No.9 was released for this purpose) and attract new people.

The ideological content of the struggle against social parasitism significantly changed later. The problem, which the document was to solve, disappeared by the time it was released. Plants don't need new workers. On the contrary, the optimise their staff. A new problem, opposite to the old one, appeared, and ordinance No.3 can only make it worse.