Assessment of the impact of COVID-19 on employment in North Macedonia

ILO and EBRD published today an assessment of the impact of COVID-19 on employment in North Macedonia. The report shows that the lockdown measures had severe impacts on employment, assesses the measures taken by government so far, and offers policy recommendations on what else to do.

The objective of the ILO/EBRD task force Covid-19 and the World of Work, established at the onset of the health crisis, was to assist further the Economic and Social Council make informed opinions and suggestions on the developed policy responses to the global pandemic with grave economic consequences.

According to ILO estimates, the equivalent of 85,550 full-time jobs was lost in the second quarter of 2020 alone. In its most recent forecast, the EBRD in May expects a drop in economic performance in North Macedonia in 2020 by 3.5 per cent, before a recovery by 5.5 per cent in 2021.

The report also shows that while certain jobs are curtailed only temporarily, others will be lost permanently. According to the enterprise survey conducted by the employers’ organizations, in collaboration with the ILO and the EBRD, the pandemic severely affected 82 percent of enterprises. 43 percent reported a reduction in revenues by 50 percent or more, and 11 percent closed down their company temporarily. Micro companies are hardest hit by the crisis, with 50 percent reporting that their revenues have halved, and 19 percent had to close down the business.

40,000 jobs are at immediate risk, and without adequate measures to support these workers and enterprises, the employment rate in North Macedonia could fall immediately by around 5 percentage points. The main employment retention measures put in place by the Government were timely, but the intensity of the support may be too low to achieve the desired impacts.

Creating jobs and protecting businesses is the goal of recommendations developed by the Task Force. The report lists a set of proposals to achieve that goal. Options for expanding worker and family protection include:

∙    Introduction of temporary unemployment assistance with broader eligibility, paid monthly at a flat rate for a maximum of six months
∙    Introduction of an intermediate category of eligible firms for job retention measures
∙    Extension of the job retention programme’s eligibility period to include the second half of March and until the end of June
∙    Further extension of the guaranteed minimum income eligibility rules, and
∙    Introduction of a lump-sum utility cost/energy subsidy for low-income households.

Options for active employment measures include promotion of job sharing schemes, job rotation and trainee schemes as well as investment in the digital economy. Ways to support enterprises include greater access to finance, administrative support and social dialogue between relevant stakeholders.

This report was developed within the framework of the project “Strengthening Social Dialogue in North Macedonia”, funded by the European Union.

You can find an electronic version of the report on the following link:

https://socijalendijalog.mk/wp-content/uploads/2020/05/Macedonia_Assessment_FINAL.pdf