“My First Salary”: Combating Youth Unemployment in Serbia

Dubravka Ćosović, Serbia

In this analysis, we will reflect on the efficiency of the most recent measures for combating youth unemployment in Serbia, pompously announced by the government through its programme “My First Salary”. Even though Serbia in the last decade managed to reduce its unemployment officially from up to 25% in 2012 to 7,3% in early 2020 prior to the pandemic, youth unemployment still remains a serious problem in the country and is currently estimated at nearly 31%. This is over four time more employed young people than the national average, which is worrying. Youth in Serbia face fewer opportunities to start their careers due to a number of factors, some being the rigidity of the employment system, clientelism, prolonged principle of employing people through personal contacts and connections rather than through lack of open calls, poor salaries in comparison with other EU and European countries etc.

To combat this problem, the Serbian government recently announced its programme ‘My First Salary‘ with an ambitious task of providing first employment opportunity for tens of thousands of young people. In a country of under 8 million people; with youth between 15 and 24 comprising less than 800 000 people, this seems like a sizable initiative. While the initiative itself is, therefore, most welcomed and timely, the question remains if this programme will fulfil its proclaimed goal.

One major problem with this initiative is the eligibility and application procedure – namely, only the employers are allowed to apply for this opportunity to engage young people for the minimum of 9 months, for which they will receive money for their salaries. Moreover, employers are limited in terms of the number of people they can employ on the basis of the size of their company – effectively, this means that bigger companies can employ more workers, while smaller ones are either ineligible or can employ one or several at the most. More so, only young people who are currently officially registered as unemployed can be considered, which also limits those who are de facto unemployed but did not register officially for various reasons. This practically means that the bigger companies are put in the far more favourable position, as it is they who can benefit the most from this programme. One cannot resist the impression that having young people apply directly for work and listing their preferred company/ies to work at would be much bigger help for them than merely sending them to work by someone else’s decision and choice.

In addition, experts object that this initiative has “shady” legal status and is not in line with the Serbian Labour Law. As they say, this financial compensation and partial medical cover is all that the young people will get – they will have no other rights such as the right to holiday, this period does not count into their work years, nothing goes to their pension funds, and their compensation is below the minimal wage in Serbia. A labour expert in Serbia concluded that such a type of contract does not exist in the Serbian Labour Law, and that young people are not event labeled here as employees or workers, but only programme users.

To sum up, in this analysis, we examined both the reasons for this programme as defined by the government and reasons against it, expressed by some experts emphasizing that this will effectively mainly bring benefits to big companies that will scoop governments funds, that the initiative violates with the labour law and gives little if any rights to the workers i.e. youth itself.

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