SECTION of DOCUMENT:
Krzysztof Zagorski, Warsaw
Unemployment constitutes one of the most serious negative side-effects of transformation of former state-socialist economies into democratic free market economies. Its appearance, though theoretically foreseeable, constituted a shock for the societies, for whom the former system provided a relative security of employment associated with low labour efficiency, great overmanning and waste of labour. The effects of unemployment were not fully imagined by people accustomed to a high security of jobs, contrary to the societies where long lasting structural unemployment is perceived as a fact of life, even if a very negative one. Since unemployment is perceived in Central-East Europe as a side effect of transformation rather than as a malfunction of a "normal" economy, public reactions to it may be especially important for supporting the transformation as such. Thus, it has to be closely monitored.
The aim of this paper is documentary and descriptive rather than explanatory and analytical. It will demonstrate, how the attitudes to unemployment were changing in Poland with the ongoing economic transformation. The attitudes in Bulgaria will be used as a reference point, since the general stereotype, if not a grounded opinion, is that economic transformation is much slower in Bulgaria than in Poland, despite the change of the socio-political system in both countries.
1. The Background and the Departure Point
1. The Background and the Departure Point
General information about changes in unemployment constitutes an indispensable background for further descriptions of changing attitudes. Official statistical data show the growth of officially registered unemployment in Poland from zero at the beginning of the decade to about 17 percent in 1994. Economic growth associated with ongoing and determinate economic re-
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forms has resulted in a gradual decline of unemployment since then. In 1998, the unemployment rate has declined to 9 percent.
Two remarks have to be made, however. First, unemployment already existed before 1990, but since it was not officially recognised by the authorities and since no unemployment benefits of any kind were paid, there were no official statistical records of it. Thus the "zero ground" departure point is actually not true and the true number is unknown, though it was certainly quite low. Second, the decline in official unemployment figures after 1994 may partly result from deregistering of those unemployed who have lost the rights to unemployment benefits after receiving them too long. However, losing the benefit did not result in lowering the unemployment rate previously, since it was more than counterbalanced by a growing number of newly unemployed till 1994. Such an offset is evidently not full since 1994.
Because of formal definition of unemployment used in statistics, official statistical data often differ from survey data based on self-description. Survey data collected by the CBOS show steady unemployment rate in Poland between 1994 and 1999 (Table 1). The unemployed constituted 7-8 percent of adult (18 years or more) population surveyed in Poland in 1994, 1997 and 1999. The more important is a ratio of unemployed to economically active population that reaches in Poland the level of 15 percent.
Employment and unemployment. Poland l994-99, Bulgaria 1997
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Bulgarian data suggest much higher unemployment there than in Poland. Moreover, due to a high number of pensioners caused by an older average age of the Bulgarian population, the ratio of unemployed to employed workforce is twice higher there than in Poland. If these survey numbers are correct, they indicate a severe problem of both economic and demographic nature in Bulgaria.
Polish survey data, though not supporting official statistics about falling unemployment, suggest a positive process of diminishing time in unemployment (Table 2). The number of unemployed for less than half a year has increased in Poland in the 1994-97 period from 28 to 37 percent of all unemployed and the average number of weeks in unemp1oyment has declined from 37 to 34, The average time in unemployment is recent1y somewhat higher in Bulgaria than in Poland.
Unemployed by duration of unemployment-Poland 1994-97, Bulgaria 1997 (in %)
An improvement in unemployment in Poland takes part in times of a free market consolidation. Thus, it is interesting that despite ongoing privatisation and dismantling of the state controlled system of employment, more Poles declared in 1997 than in 1994 that their employment is legally protected (Table 3). Unfortunately, we have no earlier data and we can only suspect that legal protection was lower in 1994 than by the end of 1980's.
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Legal protection against unemployment - Poland 1994-97, Bulgaria 1997
* Gainfully employed except private farmers
From that point of view, the situation in Bulgaria seems to be slightly better in 1997 than it was in Poland in 1994, but slightly worse than in Poland in 1997.
Most probably, the not very high level of legal protection of employment was caused a few years ago in Poland by dismantling the state-socialist economy, while its current increase is caused by consolidation and normalisation of free market relations. It is difficult to say, whether the reported level of legal work protection in Bulgaria in 1997 is associated with a slower dismantling of a state-socialist system or with the changes in Bulgarian economy.
2. The Feeling of Employment Security
2. The Feeling of Employment Security
The differences in severity of unemployment between the two countries result in the differences in feeling of work stability (Table 4). Despite of some curbing of unemp1oyment, the feeling of stability and security of employment is steadily declining in the Polish workforce. The number of gainfully employed Poles who evaluate their current job as giving the feeling of se-
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curity and stability has declined from 52 percent in 1994 to 44 percent in 1998. At the same time, the percentage of those who see their job as giving no such a feeling has increased from 28 to 36 percent. (Remaining working respondents either cannot evaluate security and stability of their jobs, or they give "middle of the road" answer that the job is neither insecure nor a particularly secure one).
The growing feeling of occupational insecurity is accompanied in Poland by the increasing income satisfaction. The number of working Poles who evaluate their job as bringing good earnings has increased from 11 percent in 1994 to 18 percent in 1998. At the same time, the number of those who complain that their job does not bring good earnings has declined from 56 to 37 percent only.
Current job evaluation
* The answers so, so" (average") and difficult to say" not shown
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We do not have the time series for Bulgaria. However, the current situation there differs very much from the Polish one. Much weaker than in Poland feeling of work security is associated in Bulgaria with much greater number of those dissatisfied with their earnings. However, the evaluations of earnings are more diversified in Bulgaria than in Poland, since the percent of Bulgarians satisfied with their earnings is also higher than the percent of satisfied Poles. That may reflect either greater earning differences in Bulgaria or the fact that much greater unemployment makes more people there than in Poland satisfied with their quite moderate income, because the most important thing is to have the earning at all. Of course, both reasons may interplay.
The remnants of state-socialist system result in Bulgaria in work-places giving more fringe benefits than in Poland. These benefits, called in the past "social" ones, such as kindergartens, cafeterias, health service, summer resorts often even the housing etc., were offered in state-socialist times either by the workplaces or by the trade unions, the latter performing the role of such a provider instead of true representation of workers' interest. It seems that the whole system was dismantled and organised on free market principles much quicker in Poland than in Bulgaria.
All in all, diminishing feeling of work security was partly recompensed in Poland by higher earnings. The evolution there seems to follow the road from socialist high security at low level of material returns to capitalist insecurity at a higher average level of earnings. If the evaluations reflect the reality without a great distortion, low work security still coexists with relatively high social consumption (welfare fringe benefits) provided by the workplace in Bulgaria.
It is interesting that the Poles evaluate their jobs as more interesting and better utilising their skills than the Bulgarians do. Also a general feeling of work satisfaction is much higher in Poland than in Bulgaria.
Lower security of employment does necessarily mean a difficulty in finding another job. Sometimes it may be associated with a feeling of plenty of other opportunities. While the lack of stability and security of work in a condition of diminishing chances for other employment leads to fear and anxiety, similar insecurity may create new motivations in a condition of many different chances for a new work. Though the Poles see their jobs as less secure than before, at the same time they see increasing opportunity to find another employment (Table 5).
How easy is it to find a job in your occupation?
*The answers Not so easy, not so difficult" and difficult to say" not shown
Though not satisfactory enough, the increasing employment opportunity is apparent in Poland after 1994 both in public and private economic sectors. Moreover, the rapidly growing Polish private sector is perceived as giving more chances of employment than the public sector. The chances for employment are perceived as greater in private than in public sector also in Bulgaria, albeit they seem to he much lower in both sectors of Bulgarian economy than they are in Poland.
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As already shown, work stability and security is far not the same as opportunity to find a new employment. Thus, the increase of subjective employment opportunity in Polish private sector is not associated with the increase of subjective security in this sector (Table 6). The Poles do not see any increase of work stability in private sector since 1994. Moreover, they see the work in public sector as a few times more secure than in the private one.
Economic development in Poland since 1994 has resulted in better evaluation of various aspects of work in public sector, not only of its security and stability. That concerns the earnings and, what is quite interesting, also fringe (social) benefits granted by this sector. The latter may well reflect general improvement in the Polish economy, since the reduction of such benefits constitutes an element of Polish economic transformation into a free market system.
In both countries, work in private sector is perceived as much less secure but much better paid than in the public sector. However, the private sector is seen as giving more opportunity to find a new job. That supports the motion that the introduction of capitalist free market leads, in longer perspective at least, to a lesser economic security at a higher level of rewards.
4. Opinions about Unemployment and the Unemployed
4. Opinions about Unemployment and the Unemployed
The question may be posed, whether people get accustomed to unemployment and accept it as a fact of life or whether, when it persists, they see it in a more and more negative light. A number of people who believe that unemployment is beneficial to the economy, e.g. because it stimulates effective work or changes the attitudes to it in a positive way, was always negligible in Poland, and is still dimin-
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ishing. About one third of people in Poland see unemployment as a very negative phenomenon, which should not be allowed at all. Their number is also diminishing, though negligibly. There is however, an apparent albeit slow increase in number of those who perceive unemployment as a normal fact of life, which has to be accepted as such. Nowadays, every fifth person in Poland see unemployment as something normal, with which we have to live. How does it correspond to the perceptions of the unemployed?
There are some people in all countries who tend to blame, partly at least, the unemployed rather than the economy for unemployment. A majority of the Poles think that the unemployed have lost their jobs because of the situation in their workplace rather than because of their own fault. About one third describes the unemployed as those who want to work but cannot find a job, and more than a quarter say that there are young people among unemployed who cannot find a job after finishing the school. Moreover, 15 percent say that the unemployed are victims of the socio-economic transformation (Table 7).
Only 17 percent blame the lack of proper qualification and skills for unemployment, though even that can be interpreted more in terms of labour market conditions than in terms of the deficiency or faults on the side of the workers.
Those who blame the unemployed for their fate are in the minority. The number of' people who characterise them in Poland as not wanting to work amounts to 16 percent. A little less that 10 percent say that the unemployed have lost their jobs because of their own faults and similar number say that they do not like permanent employment and prefer occasional earnings. A bit more than 5 percent share the opinion that the unemployed are too choosy in respect of the work which they are ready to accept.
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Opinions about the unemployed, Poland 1998 (In %)
* The percentages exceed 100 because each respondent could choose two different answers
This was a multi-choice question and each respondent could give two answers. Thus, the respondents can be grouped into three categories: those who give only negative description of the unemployed (putting the blame on them), those who give only such characteristics of the unemployed which blames the economy or the system for their unemployment, and those who mix the characteristics of both kinds. People who characterise the unemployed in purely negative terms constitute 6 percent of the population only, those giving mixed characteristics constitute 29 percent, and those who characterise the unemployed solely as the victims of economic circumstances amount to 65 percent. Thus, more than one third acknowledge that the unemployed have contributed to their fate, but in most cases even such people blame them only partly, while two thirds see the unemployed only as the victims of external circumstances (Figure 1).
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What kind of people are the unemployed? Poland 1998
Part of the stereotype of the unemployed concerns the abuse of the system by taking the unemployment benefit despite having more or less regular earnings from unofficial work. The Poles are convinced that such a stereotype is true to a great extent. Almost nobody says that there are no people who do not abuse the system.
Moreover, the number of those who think that at least half of the unemployed do actually work has increased from about 50 percent in 1992 to two thirds in 1998. Substantially has shrunk the number of people who believe that only a few unemployed work and get the unemployment benefit.
Receiving unemployment benefit and working seems to be a fact of life in Poland. About half of the Poles accept this fact on the excuse that it is very difficult to live on unemployment benefit alone. In addition, a small group would even price such an arrangement as ingenuity. Thus, for the majority, there is nothing bad in receiving unemployment benefit and having a moon-
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shine work. Only one third of the respondents see it as cheating the government and, thus, as something to be condemned (Figure 2).
Opinions about receiving unemployment benefit and working.
Not all of the unemployed have the same social support. We have asked both in Poland and in Bulgaria, how much unemployment benefit should be paid to different groups of unemployed people. Possible answers were specified in national currencies but they were related to average earnings at the time of research. Thus, for each country and for each period in Poland, the average postulated unemployment benefit could be calculated as the percentage of the average earnings. Zero was assigned to the cases when the respondents did not want to give a given group any unemployment benefit at all (Table 8).
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How much unemployment benefit should be paid to different groups of unemployed?
The first striking difference seen in Table 8 is that the Bulgarians want to pay much higher benefits to all groups than the Poles. That may result from lower average earnings in Bulgaria, which are less sufficient to satisfy the basic needs, but may be also caused by the greater sympathy for the unemployed in Bulgaria than in Poland. However, while wanting to pay relatively more than the Poles, the Bulgarians are a bit more restrictive in respect of to whom the benefit should be paid.
In both countries, relatively many people would pay highest unemployment benefits to single mothers and lowest to those who have never worked despite being fit for employment. The difference in benefit suggested for these two groups is about one to eight in Poland and more than one to six in Bulgaria. In both countries, people want to pay relatively high benefits to the dis-
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abled, sick and those who have lost their job and cannot find another one. Much 1ess is perceived to be just for unemployed mothers whose husbands work and even less for those unemployed who quit their job and then cannot find another one.
Thus, receiving the unemployment benefit is not perceived as the universal right of all people who cannot find a job. Social understanding of justice differentiates between various kinds of unemployment. People believe that those who can be at least partly blamed for their situation, e.g. those who quit their former job or who have never worked, should be punished irrespective of whether they really can or cannot find another employment. On the other hand, the unemployment benefit should in public opinion perform an important social role of increasing the welfare of people in specially difficult situations, such as single mothers, disabled etc. All in all, the function of unemployment benefit is perceived as exceeding the sole recompensation for a lack of work. People want the unemployment benefit to perform much broader welfare functions.
6. The Role of the Government
6. The Role of the Government
Providing unemployment benefit constitutes only one activity of the government directed to fighting unemployment and easing its negative consequences. The amount and diversity of governmental intervention seen by people as justified and desired can be treated as an indicator of etatist economic attitudes (Table 9).
Most commonly accepted are the educational functions of the state, namely provision of the training for youth in general and for unemployed in particular. This is quite understandable, since the development of various forms of education, as well as making the access to it easier for underprivileged groups, is commonly perceived as an important function of the state irrespective of the circumstances and economic system.
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Acceptance of different forms of governments intervention to fight unemployment.
Yes and no" and difficult to say" not shown
The people in former state-socialist countries are accustomed to the government building big industrial enterprises and financing other economic projects. Most probably this has caused the fact that direct investment by the government is given a high
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priority on the list of potential forms of fighting unemployment both in Poland and in Bulgaria. Much less support is given to the forms more compatible with free market principles, such as giving loans to unemployed in order to facilitate opening small firms or supporting private enterprises which offer new jobs. However, no more support is given to government's support for declining industries and much less to subsidising unprofitable government owned enterprises. More accepted is a support for whole branches or industries, which face different difficulties. Of course, increasing the taxes to finance new jobs is the least supported form of intervention in both countries.
The dismantling of state-socialist white elephant economy has resulted in a very high unemployment in Poland. The strategy chosen in such circumstances by both main political orientations, namely the post-Solidarity democratic centre-right and the post-communist left, was a continuation of reforms rather than scaring off and halting or reversing them once they have demonstrated negative side-effects. That has resulted in a gradual consolidation of the new economic system and in reduction of unemployment. This process, though not fast enough, is apparent in official statistics. Survey data give lower number of the unemployed in Poland than the official registers, however they are stable in time (Table 1). The surveys show improvements of other kinds, namely a shorter time spent in unemployment (Table 2) and better legal protection of jobs (Table 3).
The changes in labour market relations have resulted in a growing feeling of job insecurity in Poland (Table 4). However, that is partly counterbalanced by growing satisfaction with earnings, especially in the private economic sector (Table 4), and by growing subjective chances for new employment (Table 5). All these could be summarised as progressing from high socialist-type security at a low level of rewards to higher rewards and
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more choice at a much lower feeling of security on the free market. Again, one can say that the balance is still not satisfactory and the changes are too slow, but the direction seems to be proper.
There are no comparable Bulgarian data for different post-socialist periods. However, it may be said that interrupted, if not temporarily reversed transformation of the Bulgarian economy has resulted in higher unemployment (Table 1) and in perception of lower chances for new employment (Table 5) than in Poland.
There is no strong tendency to blame the unemployed for their fate in Poland, though one third of the respondents believe that many of the unemployed contribute to this fate to some extent at least (Table 7). Moreover, growing number of people believe that the unemployed often abuse the system by receiving the benefit and having a moonshine work at the same time. There is a strong tendency in Poland to see such an abuse as justified by difficult material conditions (Figure 2). Both in Poland and Bulgaria, the unemployment benefit is seen more as a tool of welfare policy differentiating between various groups of potential recipients than as an universal right of all unemployed (Table 8).
It may be very misleading to discuss unemployment as a risk associated with transformation, since it constitutes transformation's obvious negative side-effect. Unemployment is a nasty certainty rather than a risk of socio-economic transformation to a free market system. However, it constitutes a price paid for dismantling the centrally planned state-socialist economy, that has simply stopped working quite irrespective of its supposed or true good and bad sides and intentions. The emphasis on the risk leads to the questions, whether this risk could be avoided or not, and if it is an indispensable consequence of transformation was the transformation desirable or not, and to what extent. Such questions, however, have more relevance for political demagogy
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than for the real politics aimed at improving social conditions, since the state-socialist economic system has collapsed and had to be replaced by another one. It was a dysfunctional and nonsensical system, at the last days of which the only functioning industry was money printing, for which even proper paper could not be produced.
The socially relevant question is whether after causing serious initial difficulties, the continuation of transformation reduces unemployment or creates the conditions that may ame1iorate the labour market situation or not. Thus, instead of putting the emphasis on the risk, it seems to be more appropriate to speak about the hopes stemming from transformation and about an extent to which these hopes are fulfilled or not. This may seem to be a distinction between the glass which is half-empty and another one which is half-full. The actual distinction is, however, between the half-full glass and the broken one, pouring more water to which makes no sense and gluing it back together is impossible.
As demonstrated, there are some quite important features of Polish transforming labour relations that could be positively evaluated, though there are perhaps still not enough of them and unemployment is certainly much too big. It is beyond the objectives and the ability of the author to discuss the measures that could speed-up the changes in a proper direction. It seems to be evident, however, that halting the transformation would be the worst possible solution, since it would only freeze the present situation. The past attempt to do it, namely to halt the reforms, if not to reverse them in Bulgaria, has brought nothing good.
Since unemployment in transformation countries is seen not as a malady of the "normal" economy but as a consequence of socio-economic changes and reforms, the opinions on its various aspects are important for the legitimisation of transformation. As such, they deserve very careful monitoring.
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1The data presented in this paper stem from the International Survey of Economic Attitudes (ISEA) conducted in Poland in 1994 and 1997 and in Bulgaria in 1997 as well as f'rom the two Polish surveys "Current Problems and Events" conducted in 1992 and 1998. The ISEA group consisted of M.D.R. Evans, J.Frentzel-Zagorska, J.Kellei, K.Zagorski and Ts.Zlatanov (in alphabetical order). They represented the Reserch School of Social 5ciences of the Australian National University, the Institute of Applied Economic and .Social Research of the University of Melbourne, the Institute of Political Structures of the Polish Academy of' Sciences and the Institute of' Sociology of the Bulgarian Academy of Sciences. Polish and Bulgarian ISEA surveys were co-financed by the International Social Survey Programme at the Australian National University, the CEU Research Support Scheme in Prague and the University of Turku, Finland. All Polish surveys were conducted by the Public Opinion Research Centre, where K. Zagorski now works. ISEA surveys were designed during K.Zagorskis employment at the Australian National University and at the University of Melbourne.
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