If the health crisis deepens and the coronavirus is not brought under control, a large number of unemployed people could lose their jobs in the fall, when the ban on dismissals in companies to which the state paid minimum wages for three months ceases to apply. Various estimates indicate that tens of thousands to over 100,000 jobs are at risk.
Yesterday, the Minister of Finance, Sinisa Mali, said that he did not expect major shifts and negative consequences on the labor market until November 1, primarily due to the implemented aid measures, which amounted to a total of 2.31 billion euros in cash, when all three minimum wages are collected,100 euros and loan deferral.
– If we get the vaccine and it is done in the right way, it is the only long-term solution for our economy, everything else is rescue. Our economy depends on how other economies work – said Mali.
Mali announced that, together with the Serbian Chamber of Commerce and the Republic Bureau of Statistics, they are conducting research in more than 1,000 companies on how the measures have been implemented so far and how buyers and suppliers have reacted. From that, they will see which sectors are more and less affected, so they will know how they should react. Thus, he practically indirectly said that the state is still thinking about some kind of help to the economy in the fall, if needed.
– Now you need to be smart and see what will happen and in what way in the next period – the Minister emphasized.
Zoran Mihajlovic, secretary of the Federation of Independent Trade Unions of Serbia, claims that more than 100,000 people could lose their jobs as of November. The first to be hit could be the auto industry, which employs between 30,000 and 40,000 workers in Serbia.
– We have a lot of pressure from foreign investors, who are asking for an extension of paid leave for their workers. These are components, who first asked for consent for 45 days of paid leave for workers, who in that case receive 65% of their salary. Now, when it expires, these days there are requests for an additional 45 days of paid leave in order not to lay off workers. Thanks to state aid, they somehow got through this period, but when everything expires in October, the question is whether they will extend the paid leave. They have no legal limit on paid leave and can request it again. If they do not work, they will not be able to pay even that 65% of the salary. The components are collapsing and it will not be so easy to start production until the auto industry starts working. Either they will work with reduced capacity or they will not work at all, which means that a certain number of people will get fired – says Mihajlovic and adds that these are about thirty companies, which are mainly engaged in laying cables for the auto industry.
According to the Vojvodina media, the German corporation “IGB Automotive” in Indjija, where seat heaters have been produced since 2007, announced the dismissal of 176 employees due to a drop in orders of 45%. Statistics show that in May, the production of motor vehicles in Serbia had the largest year-on-year decline of all areas of the manufacturing industry, by 70 percent.
From mid-March to the end of May, sales of new cars in Europe decreased by 41.5 percent, and the Association of European Car Manufacturers expects a drop of 25 percent for the whole year.
Mihajlovic says that employees in the metal complex, who do not work indefinitely or work under some contracts, will be hit.
– And there are close to 100,000 of them in the real sector. The hotel industry will also be hit. I expect the dismissal of a large number of workers from October if there is no new aid package. The state should devise a strategy for the next year or two to help workers and firms start or maintain production levels so that we do not feel a drastic decline. The ironworks shut down production in one kiln and it will take at least three months to restart production. The question is whether they will need all the workers. It is necessary to revive domestic production because I am not sure that foreign investors will stay for a long time if the epidemic lasts – says Mihajlovic and proposes the mass launch of public works on which the fired workers would be engaged.
According to Politika’s information, HBIS Group did not extend the contracts for 60 workers of the Smederevo ironworks. Their contracts expired in February, but their Chinese employers kept them in their jobs until the beginning of July.
Since there have been various estimates in the public lately about the number of people who could lose their jobs in the fall if the health crisis lasts, we asked the Ministry of Labor, Veterans’ Affairs and Social Affairs how many workers, according to their estimates, could be left without work and whether a help program will be designed for them. We did not receive an answer.
Milojko Arsic, a professor at the Faculty of Economics, recently told our paper that, after the ban on firing minimum beneficiaries expires, tens of thousands of workers could lose their jobs at best when it comes to formal employment and as many more who work illegally. If the economy received some kind of assistance, the layoffs would be less, but it would certainly be because employment must adjust to a lower level of economic activity.
Stojiljkovic believes that the state should provide financial assistance to companies whose production fell by 15-20 percent, and not to everyone. – After the aid package for the first three months of the crisis, other countries continued to support the economy – he points out. According to him, the SES is asking the state for new support to companies, following the example of countries that have continued to help the economy with a new cycle of another three months.
As he said, the Government of Serbia should increase investments in infrastructure by rebalancing the budget, because there will be no foreign investments, and at the same time review the previous investment plans, Politika reports.
