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Public sector strikes in the context of labor market
submited on 28.09.2007 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 28.09.2007 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
The political nature of public sector strikes shifted the focus from the more important issue – about the place of the employed in the public domains of labor market in Bulgaria. Many are asking themselves the question what some teachers would for example do, if they do not have their salary, or after all “how they survive at the current wage levels”. There is hardly a way for all the employed in the budget spheres to avoid being affected by market stimulus, which are valid for all others on the labor market in Bulgaria.
The dynamics of the labor market is significantly positive in the last few years. The private sector (excluding agriculture) generated over 440 thousand jobs in the last three years. The total employment in the business sector exceeded 2.5 million on average in the year to June, as the growth is 6.9% annually which is in fact faster than the overall growth of the economy.
The registered prices grew by around 18% annually according to latest official data. In some common labor market segments – for example the so called basic positions – growth is even faster. For medium skillset positions – those requiring certain skills and qualities, but not specialized skill – the aforesaid could also be stated.
With regard to these thoughts the personal decision to stay in the budget sphere could have several explanations, but most probably it comes down to a combination of a few stimuli:
1/ the budget sphere, on average, requires lighter working time with less requirements from the personnel.
2/ the budget sphere provides wage, higher or equal to the one, which the private sector would offer marginally (for the next employee).
3/ the budget sphere provides certain social prestige and compensation package for the employed.
In this line of thoughts, the public spheres, including secondary education, are more a vehicle for employment creation rather than a service provider. The sole requirements of the syndicates of a certain relative share of GDP allocated into education proves this thesis. Education is perceived as a result variable – i.e. let the economy produce as much as it can, so that it could spare 6% for education. This turns upside-down the important relation between economic development and education.
Education, and high school education in particular, is significant for providing labor force adequate to the labor market. Over 70% of existing working places are in the segment of basic and medium skillset positions (hardly 1/5 is the share of specialized positions). This implies that employers at the moment and in the next at least 15 years will generate mainly working places, for which they will need adaptive, motivated, ethic and communicative employees – who may not be able to program but at least know basic English and communicate easily with clients.
The state secondary education can hardly meet these labor market requirements. Employers do not expect people, who know chemistry in details, but rather adaptive and capable of mastering new useful skill relatively fast. These qualities and skills the secondary education could not provide as a product. However, nobody expects that from the university education.
Even if there is a significant state employees’ wage raise, the system will continue to produce low quality product (only its price will increase). The fundamental problem is not in the share of resources in the economy, provided for education but rather the way they are allocated. We have multiple times recommended introduction of competitive mechanisms between teachers and schools. Some steps in this direction the Ministry of Education and Science attempted to implement via the so called “differentiated payment system”. But to this must also be added market motivated school principals and parents with the right to choose (in the financing of the system).
Syndicates impede the reform in the secondary education, despite it is still in a weaker form. Furthermore, they obviously do not want to use the place they have on the political arena and become a transmitter of important reforms in the public domains. For now the syndicates remained a source of political risk in the Bulgarian economy.
The dynamics of the labor market is significantly positive in the last few years. The private sector (excluding agriculture) generated over 440 thousand jobs in the last three years. The total employment in the business sector exceeded 2.5 million on average in the year to June, as the growth is 6.9% annually which is in fact faster than the overall growth of the economy.
The registered prices grew by around 18% annually according to latest official data. In some common labor market segments – for example the so called basic positions – growth is even faster. For medium skillset positions – those requiring certain skills and qualities, but not specialized skill – the aforesaid could also be stated.
With regard to these thoughts the personal decision to stay in the budget sphere could have several explanations, but most probably it comes down to a combination of a few stimuli:
1/ the budget sphere, on average, requires lighter working time with less requirements from the personnel.
2/ the budget sphere provides wage, higher or equal to the one, which the private sector would offer marginally (for the next employee).
3/ the budget sphere provides certain social prestige and compensation package for the employed.
In this line of thoughts, the public spheres, including secondary education, are more a vehicle for employment creation rather than a service provider. The sole requirements of the syndicates of a certain relative share of GDP allocated into education proves this thesis. Education is perceived as a result variable – i.e. let the economy produce as much as it can, so that it could spare 6% for education. This turns upside-down the important relation between economic development and education.
Education, and high school education in particular, is significant for providing labor force adequate to the labor market. Over 70% of existing working places are in the segment of basic and medium skillset positions (hardly 1/5 is the share of specialized positions). This implies that employers at the moment and in the next at least 15 years will generate mainly working places, for which they will need adaptive, motivated, ethic and communicative employees – who may not be able to program but at least know basic English and communicate easily with clients.
The state secondary education can hardly meet these labor market requirements. Employers do not expect people, who know chemistry in details, but rather adaptive and capable of mastering new useful skill relatively fast. These qualities and skills the secondary education could not provide as a product. However, nobody expects that from the university education.
Even if there is a significant state employees’ wage raise, the system will continue to produce low quality product (only its price will increase). The fundamental problem is not in the share of resources in the economy, provided for education but rather the way they are allocated. We have multiple times recommended introduction of competitive mechanisms between teachers and schools. Some steps in this direction the Ministry of Education and Science attempted to implement via the so called “differentiated payment system”. But to this must also be added market motivated school principals and parents with the right to choose (in the financing of the system).
Syndicates impede the reform in the secondary education, despite it is still in a weaker form. Furthermore, they obviously do not want to use the place they have on the political arena and become a transmitter of important reforms in the public domains. For now the syndicates remained a source of political risk in the Bulgarian economy.
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