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Nationwide Drop in Salaries, Expert Says

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Nationwide Drop in Salaries, Expert Says

To paper unemployment the authorities make Belarusians work almost for free.

Experts mention the shrinkage of labour markets, however, the number of officially registered unemployed has allegedly "decreased" by 18.5%.

The official unemployment level fell from 1% to 0.8%.

Instead of dismissals employees face drop in wages

Academic Director of BEROC research center Katsyaryna Barnukova in commentary to Zavtra Tvaye Krainy said that the fall in the official unemployment rate from 1% to 0.8% was not an indicator to analyze the situation on the labour market.

- In countries with low unemployment allowance a small number of people looking for a job are officially registered. The official unemployment rate may be about 1%, and if it is calculated by the methodology of the International Labour Organization (ILO), it reaches 5-6%, the expert explains.

According to the Center for Socio-Economic Research CASE Belarus, last year the employment in the economy declined at a record pace.

Thus, within first six months the number of employees dropped by 80 thousand. That was a direct consequence of the decline in production, mass elimination of jobs at enterprises and investment cuts.

By the way, against the backdrop of 80 thousand job cuts the number of the unemployed grew by only 4 thousand people in the first half of the year, represented 5% of the total number of "dismissed".

Due to the crisis and the need to adapt to market conditions and drop in GDP enterprises take job cuts, and also massively reduce wages, which reflects living standards of workers, but do not worsen the unemployment statistics.

— If the administration feels that it is necessary to reduce the wage bill by 10%, it can cut salaries of all employees by 10% and even more instead of dismissing one tenth of workers. Flexible legislation makes it possible, Katsyaryna Barnukova explains.

Wages are falling in many spheres, especially those which have suffered most because of the economic downturn. Workers in construction, chemical, education and health care industry earn less now. According to the ILO, Belarus is in top ten countries with the highest rate of decrease in real wages.

What the Unemployed Should Do

In 2017 the Belarusian Statistics Committee plans to start counting the unemployed on the ILO methodology, its data differs from the official Belarusian one in 5 times.

It proves that only one if five unemployed seeks help in employment centers. Others prefer to seek job on their own.

As soon as it is confirmed that the unemployment makes the problem that can affect everyone, the population will start requiring higher unemployment benefits.

- The state should think over creation of new jobs, Katsyaryna Barnukova stresses.

Despite voiced plans on creation of new jobs, the situation improvement is not yet expected.

"Thousands of people are in search of work, but no statistics takes them into account"

But Belarus has the potential to increase self-employment.

- Entrepreneurial culture is not very developed in Belarus. Many people, especially those who have worked for a long time, for example, at a factory, it is hard to imagine that they can do something different. Such citizens need a hit what to do. It is worth thinking about establishment of information centers and retraining courses, Katsyaryna Barnukova notes.

Reduction of tax and administrative burden on enterprises could be an effective measure for creation of new jobs.

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