State aid during the pandemic crisis delayed the wave of layoffs. But as early as January, it could feel full force, experts say. It is assumed that many employers will resort to undeclared work.
“We are going with the quick payment of another salary, I am talking about travel agencies, travel guides, travel companions, rent-a-car agencies, caterers and hoteliers,” said President Aleksandar Vucic on Thursday.
“That’s a total of 72,500 people, they’ll get one minimum wage for everyone within ten days.”
At the end of the year, three months expire, during which employers who took other state aid – twice 60 percent of the minimum for employees – were not allowed to lay off more than ten percent of employees, otherwise they would have to return all the help they received.
As the Minister of Finance, Sinisa Mali, said, 235,000 companies received help at that time, that is, more than a million workers, and due to the expiration of this deadline, the professional public says that the Serbian economy could be hit by a wave of layoffs in January.
Especially since from January, employers should start paying taxes and contributions to the minimum that the state gave to their employees, and it can be expected that many companies will not be able to fulfill those obligations.
DW’s interlocutors expect that some employers will try to solve these problems by avoiding paying taxes and contributions – that is, to officially fire a worker in order to hire him illegally.
“Whoever was in the informal sector, he will stay there, and I guess more of them will enter the informal sector,” Jelena Zarkovic, an associate professor at the Faculty of Economics in Belgrade, told DW.
“It is known that there are a lot of unregistered workers among the caterers, and the minimum will be paid only for those who are formally employed. In essence, it is designed to amortize the decline that will follow at the beginning of 2021,” adds Zarkovic.
Sarita Bradash, a researcher at the Center for Democracy Foundation, agrees with the assessment that the number of informally employed will increase. The measures so far have postponed the crisis, so Bradas emphasizes that we will see its dimensions only from January 1.
“It can happen, especially since entrepreneurs and micro-enterprises are in the biggest problem, that people move from the formal sector to the informal one, in order to somehow survive on the market,” she added in an interview with DW.
On Friday, the director of the National Association of Tourist Agencies of Serbia (YUTA), Aleksandar Senicic, told the Beta agency that any help was welcome, but that it was insufficient and late because a lot of workers had already been fired.
As of Friday, as part of the fight against the pandemic, the work of caterers and companies engaged in service activities is limited to 5 pm on weekdays, while during the weekend there will be a kind of curfew for them – they will be closed from Friday at 5 pm to Monday at 5 am.
Thus, these activities, along with tourism and hotel management, will suffer the most again, considering that they were completely without income even during the closing in the spring.
To make matters worse, it remains to be seen whether these measures – long overdue, according to some members of the Crisis Staff – will be enough to slow down the raging epidemic, or will be needed even more drastically, which would endanger other branches of the economy.
Let us remind you, the state has set a real GDP growth of six percent for 2021, which the Fiscal Council assessed as an “optimistic forecast” which “can easily not be realized.”
Apart from these sectors, it is rare for the public to talk about an entire army of people who were the first to be hit by anti-epidemic measures – informally employed.
What are informally employed workers? At first glance, it seems that these are only those who work illegally, that is, they do not have any contract or work in unregistered companies. However, we are talking about all those workers who do not have an employment contract: therefore, both those who are without any contract, and those who have a contract for temporary and occasional jobs, a work contract.
Informally employed have lower wages per hour than the minimum wage
“We did a research that shows that informally employees have a lower hourly wage than the minimum wage,” says Professor Zarkovic. “So, not only do they not have paid taxes and contributions, they do not have health insurance and tomorrow they will not have a pension or it will be lower, even their hourly rate is lower than the minimum – despite the fact that there are no other costs for the worker. That’s an additional aspect of vulnerability,” BiF reports.
