Older Workers Pay Dearly for Balkan Privatisation

Unemployed Croats check the employment office jobs list in Zagreb (Photo: Ruzica Matic)

"Twenty five members… have committed suicide because they could not cope with the poverty. All of them were over fifty. Some hanged themselves, some jumped from bridges or buildings, and one set himself on fire,” says Ljiljana Georgievska, speaking of workers who have become known in Macedonia as the ‘bankruptcy victims’.

Georgievska is vice-president of UNIT, a national association for the ‘bankruptcy victims’; workers who lost their jobs because their companies went bankrupt following Macedonia’s mismanaged privatisation process.

Most are trapped in extreme poverty as they are unable to get work. Many cannot even retire as they are not eligible for a state pension or because the bosses pocketed their pension contributions instead of passing them on to the government.

Workers young and old here have been hit hard by the bankruptcies and recession. The total unemployment rate for 2010 stood at 31 per cent, according to the State Statistics Office.

But the prospects are particularly bleak for Macedonia’s older workers. Over 50s make up almost one fifth of the jobless population and they find it hardest to get new jobs. They are far from alone.

There is an army of unemployed over 50s across the Balkans, an entire generation who suffered the economic fall-out of war, the collapse of the former Yugoslavia and the brunt of their countries’ transition from socialist economies to capitalism.

In Croatia, a report published by the ombudsman described older workers as ‘an endangered species’ as a massive 40 per cent of long-term unemployed Croats are aged 50 and above.

The already considerable ranks of jobless over 50s have been further swollen by those who lost their jobs in the global recession, not just in the Balkans but across Europe.

France and the UK are also struggling as the state coffers cannot support an ageing population and some workers must work beyond standard retirement ages. Yet, they are often the target of redundancy programmes and find it hardest to get new jobs in the current economic climate.

Back in Macedonia, Xhelal Bajrami, Former labour and social policy minister up until the June 2011 parliamentary elections, does not know how many lost their jobs as a result of privatised companies going bust.

“That number is subject to speculation, some say it is more than 20,000 people and some say it is more than 30,000,” he says.

Many poverty-stricken locals eke out a living from their homes in Kumanovo (Photo: Ruzica Matic)

Kumanovo is just half an hour from the capital Skopje. It is Macedonia’s third largest city with a population of around 80,000 and was once the industrial powerhouse of the country.

Post-privatisation, it is a shadow of its former self; the factories are closed and those made jobless eke out a living plying their former trades from home.

“Now we have [individuals operating] slaughterhouses in their backyards while the industrial slaughterhouse is derelict and overgrown with weeds,” says Georgievska.

‘Parliament is Guilty’

Few here have any faith in promises from union leaders and government to help them either retire on a state pension or find paid work.

"All those people who sit in the parliament are guilty because they did not stop the privatisation when they saw what was happening. All they cared about was to pocket some extra money, and the trade unions only helped them,” says Georgievska, who herself lost her job at a local slaughterhouse when it went bankrupt in 2005.

UNIT and UNIJA, another association for laid-off workers, have more than 8,000 members between them and have been lobbying the government to take action for the last few years, organising rallies and protests outside the parliament building in Skopje. Some went on hunger strike, others pelted MPs with eggs.

Ljiljana Georgievska.jpg Five more ‘bankruptcy victims’ have taken their own lives since June, says UNIT vice-president Ljiljana Georgievska (Ruzica Matic)

Vojislav Dimitrievski, 62, is a UNIT member who worked at ČIK, a footwear factory in Kumanovo that folded in 1996. It was the first privatised company to go bankrupt in the country.

"We had an arrangement with the government, they promised the new owner will take us back, but he took new, younger people, and we, the old workers, ended up on the street,” he says. 

He has been out of work ever since. "That is when I was diagnosed with diabetes. I have no money to pay for the medicines, and I have to wait two more years for the old age pension. If I live that long,” says Dimitrievski.

The authorities, however, have a rather different take on UNIT’s activities. Bajrami says it is a purely political organisation that is trying to denigrate the government.

When asked about the 25 suicides, he pauses for a moment before saying: "It is not true that there were so many, although I don't know the exact number.”

Georgievska and other UNIT members are taking court action to get their contributions refunded.

Since June when she was first interviewed, Georgievska says another five ‘bankruptcy victims’ have taken their own lives.

Croatian Older Workers an ‘Endangered Species’

Croats also suffered when communally-owned companies were privatised, particularly older workers who were first to be laid off when badly-run firms went to the wall.

Most were pensioned off early by the state but many, who could not retire, remain locked out of the job market because of their age.

In a 2010 report, the Croatian ombudsman said ageism was the most common form of discrimination at work. It cited other research claiming that older workers “are an endangered species for whom it is literally impossible to find a new job if they are laid off”.

Under communism, less than five per cent of unemployed Croats were aged over 50, according to the Croatian National Employment Agency (HZZ). Ten years ago this figure reached 13 per cent.

By 2010, the number doubled. Twenty-six per cent of the 320,000 registered unemployed are 50 or older.  Over 50s account for 40 per cent of the long-term unemployed; those who have been out of work for more than one year.

Women are effectively excluded from the job market even earlier; 63 per cent of the long-term unemployed are females aged between 40 and 50.

Veronika Barisic has been out of work for 15 years (Photo: Ruzica Matic)

Veronika Barišić, 55, lives in a small flat in Zagreb with her 81-year-old father. She has been jobless for 15 years.  

Asked how she makes ends meet, she looks at the floor and begins to cry: “I would rather not talk about it. Our only income is father’s pension from Bosnia. All I receive is some aid for medicines.”

She had worked for almost 20 years at a footwear factory in Prnjavor, in neighbouring Bosnia and Herzegovina. When the wars began in the early 90s as the former Yugoslav republic fell apart, the factory was closed and they fled to Croatia.

Diagnosed with breast cancer and osteoporosis, she is struggling to cope. “I had some health problems while I was still working, but then I had the will to live. Once you loose that rhythm, your nerves start to fail,” she says.

Veronika has no idea how she will survive without her father’s income.

Seniors Laid Off First

Chart: Croatia’s Unemployed Older Workers

Zagreb’s unemployed must register monthly at the HZZ office in order to receive any benefits and the queues are long. Yet it seems those sporting greying hair and a few wrinkles are most eager to check the job list, even if with little hope of getting some work.

"When elderly people lose their jobs it is most likely that they will not find work again. The employers prefer to take younger people, because they are less likely to ask questions, are paid less and have no problem receiving some of the pay ‘off the books’," says Maja Vehovec, a senior researcher at the Institute of Economics in Zagreb (EIZ).

On average, Croatian employers must pay around 40 per cent of salaries to the government in taxation and other deductions, according to the EIZ.

MM, a 62-year-old engineer who asked not to be named, lost his job last year after 34 years of service at the oil firm Ina – Croatia’s largest company which was privatised eight years ago.

Since then, the Ina deal has been mired in controversy, amid accusations of corruption that go to the top of the government.

"The new management laid off lots of people, especially those over 50. One day they told me that I had to go. I asked if they could keep me for another year, until I reach 35 years of employment and meet the requirement for early retirement. They refused,” says MM.

He accepted a severance deal worth two years’ salary and started looking for another job. After applying for 30 posts, he is still searching and isn’t hopeful he’ll find anything soon.

Officially, ageist work practices are outlawed in Croatia. With some exceptions, recruitment ads cannot generally set age limits for candidates and employers cannot lay off workers on the grounds of their age.

Discrimination at work, however, is difficult to prove in court. Usually there is no evidence, and colleagues are unwilling to testify because they fear losing their own jobs.

On top of that, cases drag on for years. The longest and still undecided employment dispute at Zagreb’s municipal court was opened in 1991. There are more than 800 ongoing cases that began before 2005.

Many workers decide not to pursue employment disputes.

"The clients always ask me how long will it take, and when I say that it could be one year at best, they lose steam,” says Domagoj Rebić, legal adviser at the Independent Trade Unions of Croatia (NHS).

Huge levels of unemployment among the over 50s is not Croatia’s only problem. The state is struggling to pay the pensions of many thousands who were encouraged to take early retirement at the beginning of the 90s, during the war and as the privatisation process began.

"The new owners offered them the choice between the labour market and early retirement and most chose the lesser evil. That was bad for the state, because it was not possible to pay so many pensions from the salaries of the employees,” says Vehovec.

“Unions also encouraged older workers to take early retirement because, unlike younger employees, they would at least have some secure income,” explains Krešimir Sever, president of NHS.

Last winter, the combined number of pensioners and unemployed in Croatia outnumbered the number of employees in work, according to the Croatian Chamber of Economics.

"No system can endure this,” says Sever.

French Pensions Crisis

Older workers are usually the first to be laid off, says Morad Rabhi from the French CGT trade union (Photo: Ruzica Matic)

France is also struggling to tally the books when it comes to paying their legions of pensioners who were encouraged to take early retirement.

Back in the 1950s, there were five workers for every pensioner and last year that dropped to 3.5 employed for every retiree, according to the Organisation for Economic Co-operation and Development. They estimate by 2040 there will be just two workers for each pensioner.

During the economic crisis of the 70s, it became common for French workers to retire at 55. They were entitled to 62 per cent of their full salary until they could claim their state pension aged 65.

The state soon realised these payments were unsustainable and, during the past 15 years, has been trying to reverse the trend and keep workers in employment for longer.

But this has proven to be an uphill struggle, as older workers are usually the first to be let go, particularly during the current economic downturn.

"Over the last two years, some 70,000 people have been laid off and 37 per cent of them are seniors [over 50s]," says Morad Rabhi from CGT, France’s biggest trade union.  

Bruno Deledalle, an employment lawyer from Paris, agrees: "The seniors are the first victims of massive lay-offs because they are expensive and the least productive.”

In fact, figures from the labour ministry show that the number of unemployed seniors rose by 17 per cent from July 2009 to July 2010 alone.

The government has also changed the law, allowing bosses to negotiate individual redundancy terms with workers rather than having to agree collective severance deals. This, combined with the impact of globalisation, seems certain to mean older workers will bear the brunt of lay-offs.

"There is an example of a plant that was closed down by its foreign owners although the company was doing well. The plant had more than 65 per cent of employees aged over 50. The owners found that keeping the plant in France is not profitable enough because of the high salaries… they made severance payments to all employees in amounts as high as five annual salaries,” says Rabhi.

Older workers in France struggle to get new jobs too, as 51 per cent of long-term unemployed people are over 50s, according to the French Statistics Agency (INSEE)

Incentives to Employ Seniors

The French government has recently introduced measures aimed at keeping older workers in their jobs and encouraging employers to take on unemployed over 50s.

These include state grants for employers who take on older workers and retraining programmes for those facing redundancy. This may well work for some, but many seniors remain pessimistic about the future.

Sophie Gherardi, 56, is a well-known journalist and editor who has worked for top news outlets AFP, Liberation, Courier and Le Monde. In September 2010, she was laid off from the Tribune during a round of swingeing cuts.

Although used to changing jobs in a media world that has been hit hard by recession and competition from online news portals, she was always certain she would land another top post quickly. But not this time.

“When the crisis kicked in, I realised that I will have to pay the price,” she says, adding that the recession had swept away the majority of experienced, old-school journalists.

Yet while older French workers find it increasingly difficult to find work, they are being asked to retire later.

This has proved hugely unpopular, and President Nikolas Sarkozy’s announcement that the state retirement age would rise from 65 to 67 sparked massive protests.

UK Baby Boomers

Asking Britons to work longer is all very well, but older workers face discrimination in the jobs market, says Sally Brett at the Trades Union Congress (Photo: Ruzica Matic)

UK workers of any age have not enjoyed the same rights as their counterparts in France, but the government is also struggling to balance the cost of an ageing population.

As the baby boomers head off into retirement, there are too few tax-payers to support them.

According to the Department of Work and Pensions, 17 per cent of the population is now aged 65 or over and by 2050 there will be just three people of working age for each pensioner.

Britons over the state pension age have outnumbered children under 16 since 2007.

In an attempt to allow those who want or have to work longer, the compulsory retirement age of 65 has been removed. An employer cannot force a worker to retire without their agreement, unless there are compelling reasons, such as the job requires high levels of physical strength and fitness.

Sally Brett, senior equality policy officer at the UK’s Trades Union Congress, says asking workers to work longer is all very well but many face ageism in the job market.

“Senior workers are encouraged to go into early retirement and if companies are downsizing, seniors will be the first to be laid off. And if somebody loses his job in his mid-50s, it will be very difficult for him to find a new job, especially a job as good as the one he had,” she says.

The figures back up Brett’s claims. By September 2011, 41 per cent of Britons unemployed for 12 months or longer were over 50, according to the Office of National Statistics.

While Brett agrees that people live longer and need to work longer too, she says the proposals are unfair to the poor who “will be lucky if they reach the age to enjoy retirement because many are exhausted, ill and didn’t have such good lives”.

Alan Beazley, employee relations manager at the Employers Forum on Age, says working longer is the only way economies can cope with rapidly ageing populations.

"I believe that Europe shall follow the example of Britain… simply speaking, the economy requires people to work longer than in the past,” he says.

But this is hardly a solution for Georgievska and Dimitrievsk back in Macedonia. Both say they would take any paid work available to avoid being a burden on their children.

Macedonians are wondering just how many more ‘bankruptcy victims’ will take their own lives before the government steps in and helps them either retire or find a job.

Ruzica Matic is a Zagreb-based journalist. This article was produced as part of the Balkan Fellowship for Journalistic Excellence, an initiative of the Robert Bosch Stiftung and ERSTE Foundation, in cooperation with the Balkan Investigative Reporting Network.