Beware of this work …

Already in the early days of his government the new government has taken several important steps – and stood firmly for the currency board looks at the introduction of the euro, limiting costs and announced plans to significantly improve the business environment. Along with all this, however, rank and policies on employment, at least until you do not sound very encouraging.

It is good to remember that before the election also led to serious discussions about rising unemployment and the policies to achieve employment. Then government focused its efforts on providing employment through various programs of the Ministry of Labor and Social Policy (ie supported employment), as well as programs for training and retraining in the same department. At that time, we at IME opposed such programs, arguing that they do not work and does not achieve the desired results. Along with all this, argued that higher employment can be achieved with lower taxation on labor, ie reducing the security burden. This argument was further supported by Simeon Diankov (now finance minister, then an economist at the World Bank), which together with Georgi Angelov study prepared stating that the reduction of benefits by 7.5 percentage points would result in creation (or preservation) of 130 thousands of jobs. Amid all this, what happened after the elections?
Firstly, of course, the reduction of benefits was pootlozheno in time, they are expected to be removed by 5 points it at the end of the mandate. This seriously contrasts sharply to the idea of prolapse of the labor tax as a measure against the crisis and rising unemployment. At the same time, the new Minister of Social Order Totyu Mladenov made speeches in which virtually all the words of support IME in the last 1-2 years. It was argued that programs to provide employment are a complete failure, something that we knew long ago. Also, it turned out that programs for training and retraining, not only does not produce results, but has a straight and serious abuses, again something that failed to surprise us.
It seems that these findings will lead to our desired results. Instead of termination of these costly programs, which now accounted for just a scattering of money, the new government will obviously be trying to revive them. How and why it is not quite clear …
Indeed, the government’s new plans include more left turns in the labor market. Increases in some of the minimum insurance plans is one of those steps that would rather be a burden of work and unlikely to lead to employment. Strange sound and some other ideas, leading to attempts to protectionism in the labor market. Where did this desire springs to prevent the recruitment of workers from third countries? No, this is not the protectionism that is just my prejudices! And that in times when we want a liberal behavior of our European partners and opening of all labor markets Nashentsi. Weird …

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Petar Ganev, Institute for Market Economics

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