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Reduced employment opportunities are generally perceived as a major human development challenge for Roma. Because significant problems with existing employment data can generate arbitrary interpretations and ungrounded conclusions, employment issues were a high priority addressed by the UNDP/ILO survey. For example, Roma unemployment is often reported to reach 95 to 100 percent. These assumptions, however, do not take into consideration involvement in the informal sector, which is often not perceived as "employment." That is why quantitative information on the real magnitude of unemployment and the types of employment was crucial in the research.
Another important aspect related to employment was ethnic discrimination in the labour market and its relationship to the low competitiveness of the Roma labour force. Where does low competitiveness end and discrimination begin as a cause of Roma unemployment? Finally, the issue of traditional skills as possible source of employment opportunities was explicitly addressed. Do Roma perceive them as marketable in a global economy and if yes, what types of skills?
Based on the subjective interpretation of unemployment-in the form of responses to the question, What is your current socio-economic status?-three outcomes dominated: unemployed (46 percent on average for the region), employed (20 percent), and retired (15 percent). On this basis, Graph 9 (left bars) shows subjective unemployment rates among the Roma in the five countries.
Unemployment is not evenly distributed among the Roma; rates differ according to age and educational level. Graphs 10 and 11 show rates of (broadly defined) unemployment, broken down by age and education. Educational level is clearly an important determinant of success on the labour market, although subjective unemployment rates are relatively high for all groups. Age also has an influence, however, as the difference between Roma youth and adult unemployment rates is smaller than for overall population of these countries.
Unemployment duration was explicitly addressed by the question: When was the last time you had a job? Responses to this question point to the long-term nature of Roma unemployment: more than half (51 percent) of unemployed respondents stated that they last held a job before 1996. Respondents with primary or lower education levels stated that they last held a job prior to 1995 more often than respondents with at least a secondary educations (56 percent compared to 46 percent). Their long durations of unemployment indicate why many Roma are ineligible for unemployment benefits, and thus have to rely on minimal social assistance.
The ILO/UNDP survey data indicate that the majority of respondents in all the CEE countries face difficulties on the labour market. Only in the Czech Republic is the share responding 'No, do not have difficulties' relatively high (30 percent), in all other countries this percentage varies between 7 percent (Bulgaria) and 10 percent (Hungary). When asked, What are the three main difficulties in finding a job?, respondents usually mention 'Overall economic depression in the country,' or 'My ethnic affiliation' and 'Inadequate skills' (Graph 12).| Box 6: Roma on the Hungarian labour market The social integration of low-skilled workers has become a global social problem. The changes in employment and labour market trends in Hungary during the 1990s had a particularly dramatic impact on the Roma in that country. Two thirds of the jobs that they had occupied under the socialist system were wiped out during the transition. According to data produced by the national Roma survey in 1993, 57,000 Roma were unemployed in that year, yielding an unemployment rate of nearly 50 percent (compared to 13 percent for the non-Roma population). The 57,000 Roma who were registered as unemployed constituted 9 percent of the total registered unemployed. According to a survey conducted by NEO-Autonómia in May 2002 (based on local job centre data from May 2001), in 2001 registered Roma unemployed numbered between 55,000 and 58,500. While this figure constituted 15 percent to 17 percent of the total number of unemployed, only 8 percent of those receiving unemployment benefits were Roma. This imbalance probably reflects the long-term nature of Roma unemployment, as many unemployed workers exceeded the period of eligibility for receiving benefits. The share of Roma among those receiving "post-benefit support was 16 percent, while Roma comprised 14 percent of "unassisted registered unemployed" group. The survey also indicated that Roma were over-represented in the group participating in various public works programs: 14 percent of those involved in large public works projects, and 19 percent of those involved in local public works, were Roma. These data point to two basic facts. First, although (registered) unemployment rates fell, the proportion of Roma in total unemployment nearly doubled between 1993 and 2001. Unemployed Roma workers have dramatically fewer chances than non-Roma workers for entering or re-entering the Hungarian labour market. The data also show that a smaller portion of unemployed Roma workers actually receive official labour market assistance than do non-Roma workers. Hungary's overall population is shrinking, and the share of the population comprised of working-aged individuals is falling. The demographic currents among Hungarian Roma run sharply counter to these trends: the population of Hungarian Roma grew from an estimated 500,000 in 1993 to 570,000-620,000 in 2001, and the working-aged population grew as well. If (as is suggested by the above data) Roma unemployment rates have not fallen sharply, then a smaller proportion of the inactive Roma population in 2001 was classified as unemployed-and received unemployment benefits-than in 1993. All these are reasons for higher dependency of Roma on central transfers, constituting 22 percent of those receiving social benefits. This suggests that a sustainable solution for Roma unemployment is still to be found and in the mid-term this population will have to rely largely on state-funded employment and income-generation schemes. Box prepared by Autonómia Foundation, Hungary, based on: Kemény István (ed.) A romák/cigányok és a láthatatlan gazdaság. Osiris - MTA Kisebbségkutató Muhely, 2000; Kertesi, Gábor. "Cigány foglalkoztatás és munkanélküliség a rendszerváltás elott és után", In: Cigánynak születni, Bp., ATA, 2000; Hablicsek, László. "Kísérlet a roma népesség eloreszámítására 2050-ig". In: Cigánynak születni, Bp., ATA, 2000; Kemény, István (ed.). A magyarországi romák, Press Publica, 2000; Köllo, János. Roma Unemployment and the Benefit Reform of Year 2000 - Indirect Evidence Based on Regional Data (recent survey on the Roma labour market programs in Hungary) |
| Box 7: Roma vs. non-Roma unemployment in the Czech Republic High unemployment levels are one of the most important problems facing Roma communities in the Czech Republic. Roma are over-represented among the chronically and long-term unemployed. If long-term unemployment is defined as lasting for more than one year (according to ILO standards), then about 75 percent of unemployed Roma fall into this category. Some 30 percent of unemployed Roma have not had employment for more than four years. Survey data indicate that Roma perceive themselves to be victims of labour market discrimination more often than other job seekers. Research on inter-ethnic relations suggests that Roma unemployment rates in the Czech Republic are four times greater than those for Czechs (Kaplan states that the Roma unemployment rate is 3.4 times higher). Survey data indicate that low skill levels are the main cause of high Roma unemployment rates. Some 75 percent of Roma workers have no skills whatsoever. About 15 percent of Roma workers are classified as skilled labourers, and some 10 percent have professional status. One fifth of Roma workers older than 20 have not worked at all, so their socio-economical status cannot be derived from their occupational position. A large negative role is played by the social welfare system. Many employers are unwilling to employ Roma workers because of unfavourable (subjective) assessments of Roma workers' productivity and their work ethic. Research on long-term and chronic unemployment shows that Roma unemployment rates are between 40 and 50 percent, while the overall unemployment rate in the Czech Republic is 8 to 9 percent. Based on: Výzkum interetnických vztahu: zpráva. PHARE Project "Improvement of Relations Between the Roma and Czech Communities" (CZ 9901.01) Fakulta sociálních studií Masarykovy univerzity v Brne, Brno, 2002; Kaplan, P. 1999. Romové a zamestnanost neboli zamestnatelnost Romu v Ceské republice. In: Romové v Ceské republice, pp. 352-377. 1999. Praha: Socioklub. |
Unemployment issues also relate to different types of income generation activities (pertaining, for example, to monetary and non to monetary incomes). Roma who stay out of the formal labour market are often involved in income generation in the shadow economy or subsistence agriculture.57 Graph 13 demonstrates this phenomenon across countries, reporting the percentages of employed Roma working in the formal or informal sectors. Consistent with the data cited above, involvement in informal sector activities in Romania is particularly high. Although there are relatively low unemployment rates for Roma in Romania, they are mirrored by relatively high involvement in informal sector activities. Although "only" one in four Romanian Roma are unemployed, of those involved in income generation activities, less than one in three obtains employment in the formal sector. 
Looking at the picture by education (Graph 14) provides further useful information. For Roma with higher education levels (only one in four has secondary education or better), employment in the informal sector is relatively rare. Not only does better education improve the chances of finding employment, it also greatly improves the chances of finding a job in the better paid and more stable formal sector, thereby providing a way out from the vicious circle of low wage and unstable employment prospects in many Roma communities.The complexities of employment opportunities are often oversimplified both by Roma and by different actors involved in Roma employment issues. The real problem is in determining where inadequate skills end and ethnic discrimination begins. Roma employment prospects in dealing with opportunities for arbitrary assessments by employers are enormous, and significant prejudices exist in this regard, as negative stereotypes of Roma are deeply rooted. The simplest approach to this dilemma is to explain everything in terms of "discrimination", and to propose passage and implementation of anti-discrimination legislation to address these labour market issues. But such solutions run afoul of the relatively low skill levels of many Roma workers, and as such must be complemented by measures to increase skill levels.
The responses to the question, Which of the following problems are seriously affecting you and household? (summarized in Table 4: "Ranking of problems Roma are facing" at the beginning of this chapter) lend additional support to the hypothesis that respondents tend to underestimate the objective labour market requirements and overestimate the impact of their ethnicity. The option, 'Lack of educational opportunities,' was selected by disturbingly small numbers of respondents, suggesting that many Roma may not directly connect their employment difficulties to their competitive weaknesses on the labour market. Despite being aware of their low skill levels, many respondents apparently do not appreciate the importance of education and training for improving their employment prospects.
Employment: possible approaches
In order to improve Roma access to employment and income generation, policy makers must decide whether to emphasize wage employment, self to employment, or some combination of the two. High subjective unemployment rates and extensive involvement in the informal economy suggests that Roma tend to perceive "employment" primarily in the terms of wage employment. Such opportunities are diminishing, however, especially for unskilled labour. This suggests that policy makers should focus on improving the employability of the Roma labour force, and that other possible policies should be assessed from this perspective.
Active labour market policies (ALMPs) in CEE countries do not seem to be very effective for Roma. Between 6 percent (in Bulgaria) and 25 percent (in Slovak Republic) of respondents to the UNDP/ILO survey participated in employment and retraining programmes. The high share in Slovak Republic is due to the dominance of public works programmes in that country. In the Czech Republic, Hungary, and Romania, training programmes play the most important role in ALMPs, while in Bulgaria public works slightly prevail. In all these cases, however, the impact (in terms of improvements in employability) was rather poor. Asked, How did those programmes increase your chances of finding a regular job?, a majority of respondents in most of the countries said 'Not at all' or 'Not much' (86 percent in Bulgaria, 84 percent in Slovak Republic, 76 percent in Hungary, and 66 percent in the Czech Republic). Only in Romania are respondents more optimistic about the potential of ALMPs to improve their employability: 33 percent there responded 'substantially' (although the share of those not responding there was the sample's highest-21 percent). These trends could illustrate the key link between the two major problems Roma are facing: lack of education opportunities and unemployment. If the training and retraining efforts are not effective, there may be little incentive for further participation in educational programmes.
The issue of employability is also often approached by focusing on traditional skills as sources of potential competitive advantages for Roma workers. But are these skills marketable today and could they serve as a basis for sustainable employment? The answer is generally "no". Traditional forms of Roma employment (e.g., smiths, spindle to makers, horse to traders) are no longer viable in industrialized Central and Eastern European societies. For all their cultural distinctiveness, Roma populations are like all ethnic groups: if they are unable to benefit from globalization via economic integration, they will be unable to address the challenges of poverty, deprivation, and marginalization. Developing and maintaining competitive advantages today inevitably mean integration, which implies a certain abandonment of distinctiveness.
The survey data produced by the ILO/UNDP study support this analysis. The three responses to the question, What traditional Roma activities practiced in your close community could be a source of income today? (Graph 15), that received the greatest support are music (60 percent), commerce (56 percent), and handicrafts (43 percent). The expectation that music can be a source of competitive advantage is lowest in Bulgaria and Romania (supported respectively by 48 percent and 50 percent of respondents). Handicrafts are seen as an area of potential advantage mostly in Bulgaria (73 percent, which places this option as the first in the country). All other options receive negligible support. The problem is the lack of sufficient demand for these skills in current economic environment. Moreover, focusing on traditional skills and crafts sends a "retroactive" message: it implies that it is possible to reverse the post to communist economic structure (a sensitive issue in countries experiencing the collapse of old industries, which is perceived by growing constituencies as intentional de to industrialization). Instead of emphasizing exotic but outmoded handicrafts, the flip side of traditional Roma occupations should be promoted: their flexibility and service to oriented character. The traditional service to oriented focus of Roma crafts suggests that Roma could be well suited for inclusion in rapidly growing service sectors. The real advantage of traditional Roma skills may lie not in the skills themselves but in the entrepreneurship that underpins them.58
The above factors need to be taken into consideration when employment policies for Roma (and other disadvantaged groups) are being devised. Its current skill set significantly limits the competitiveness and marketability of the Roma work force. As such, the official sectors in the CEE economies and the EU will not generate large job opportunities for many Roma workers. Public works schemes should therefore be considered as a major source of employment provision, at least in the short to and medium to term-especially if they have training/retraining components. While the fiscal implications of such programmes can be significant, investment in such schemes is often preferable to unconditional social welfare that can create dependency cultures. Donor resources can also be mobilized to cover these expenditures.
The so to called "social economy" (also known as the voluntary, community, or third sector economy) is another area that deserves closer attention. Social economy organizations are motivated by social purpose rather than by profit, combining economic with social criteria. While this sector cannot generate resources itself, it can be a perfect partner for governments and donors in the delivery of services in such areas as health, welfare, housing, training, and education. Involving vulnerable groups in social economy enterprises not only provides employment but can have profound socialization effects as well.
| Box 8: Bulgaria: Market-based poverty alleviation is feasible Self-employment and subsistence agriculture are important survival strategies for many Roma in Bulgaria, even though their access to land and working capital is limited. At the same time humanitarian assistance often has a demoralizing impact on Roma communities, and encourages dependency cultures. For that reason the Creating Effective Grassroots Alternatives (CEGA) Foundation NGO, together with the Institute for Market Economics (IME), initiated the "Land-based Income Generation for Poor Roma Families in South Bulgaria" program, with financial support from the NOVIB and Friedrich Naumann Foundations. Since its inception in 1993 the program has evolved into a consistent and sustainable mechanism for combining access to land and secured credit with the development of new skills. The basic scheme is simple. Participants establish (in accordance with Bulgarian legal requirements) limited partnership companies in their communities. The NGO (as the manager of donor funds) has a representative in the company with veto rights. Each member of the company chooses a plot of land and negotiates the price with the owner. The price may not exceed certain limits which are set in advance. Participants must deposit 20 percent of their own money to purchase the land. The company provides the remaining 80 percent in the form of a 3-5 year intra-company loan with a 6 percent annual interest rate. Participants become legal owners of their land only after the loan has been paid back in full. If they don't pay the loan back in full, participants lose their investment (the initial 20 percent deposit and any further repayments), which is securing the loan and donors' money. The annual payments are comparable to the cost of leasing land from private owners. Short-term working capital is made available to participants under similar conditions. Participants also have access to agro-technical training and expertise within the Agro-information Centre run by CEGA. The fact that participants are "almost owners" from the very beginning is crucial, as it makes the prospect of becoming owners seem feasible. Their self-esteem and prestige within the community can grow dramatically. The scheme differs from most assistance-oriented programs in a number of respects. It both distinguishes between and combines social objectives and market-based rules. It is consistent with the market environment (loans, not grants are provided) while simultaneously providing opportunities for socially motivated support (in certain circumstances the donor may decide to reduce the interest rate). Since the program is not based on grants, participants think twice before investing their initial capital. The scheme is also flexible enough to allow for individual approaches depending on the region, participant, or other specific characteristics. At the end of 2000 only 6 participants had signed up for the program. A year later the number of participants had grown to 14, 8 of whom had selected land plots that were purchased by the company. The next step should be scaling up. This however goes beyond the capabilities (and the mandate) of the third sector. Box prepared by CEGA (Creating Effective Grassroots Alternatives) Foundation, Bulgaria, www.cega.bg |
Main conclusions of Chapter 3
This chapter provides a realistic assessment of the magnitude and duration of unemployment, and explains what "employment" means for many Roma. Unemployment rates are far below the levels that are often reported. It shows that respondents often understand "employment" to mean a "steady job" rather than the broader conception of "income generating activities". This explains why self to reported subjective unemployment rates often substantially exceed conventionally defined unemployment rates: Roma who are involved in income-generation, in the shadow economy or in subsistence agriculture, often describe themselves as unemployed and this is the reason why subjective and broad unemployment rates differ substantially. But despite extensive involvement in the informal economy, Roma households are heavily dependent on welfare payments and other central government transfers (pensions, child support etc.).
Low levels of employment and employability are key features of the Roma labour market performance. This is due both to discriminatory practices and to the low competitiveness of Roma workers. Poor education opportunities for Roma today guarantee poor employment prospects of Roma tomorrow. Income generation projects based on traditional skills should not be viewed as likely to effect large reductions in unemployment.
Long-term unemployment has profound, negative effects on the social fabric of Roma communities. ALMPs have so far failed to reach many Roma communities. This suggests that public works employment for Roma (and other disadvantaged groups) should be promoted-especially if they can be tied to job training or retraining activities. Social economy entities could be extremely helpful in this regard.