Ljubisa Mitrovic, Nis

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Ljubisa Mitrovic, Nis

1. Unemployment as a Phenomenon in the Contemporary Global Social Changes

The end of the twentieth century has been awaited for not only the intense rise of new technologies, globalisation processes and fragmentation of the contemporary world society, but also for the particular “great feast” of alternatives. Throughout the modern world there is an increasing spread of the myth about the neoliberal economics and social philosophy as the only salvation key to the gates of the future. This ideology is promoted by the world powers of unfettered mega capital. It is being more and more incorporated into the national and regional development strategies in the post-socialist societies.

The critical questioning of the development problems of the post-socialist societies in the transition faces us with the necessity to swallow up “a bitter pill” in the form of increasing social contradictions and conflicts in a deepened economic and social crisis. The various post-socialist regions and societies in transition have provided us with their answers to the deepening problems. In this paper we will concentrate on the critical questioning of the unemployment issue in the post-socialist societies in transition, using the FR of Yugoslavia as an example.

Social development as a complex and contradictory social process rests upon the unity of objective and subjective factors, that is, the interaction of human resources and technology. As such, it does not represent an end in itself. One of the important goals of development is full employment.

The unemployment phenomenon is well-known in the history of economic and social development. It has been solved in various ways by diverse global social systems in recent history. Some of the solutions include freeing from the institutional limitations in order to encourage individual initiatives, or a more powerful intervention of the state. Still, in other cases, both mechanisms of economic and political nature have been used as an efficient combination for dealing with unemployment. Conceptually speaking, in economic sciences unemployment is defined as a difference between the population which is able to work and the actually employed persons. It is assumed that the body of those able to work is identical to the one willing to work. In the contemporary economic theory and practice there are four distinct forms of unemployment, namely: 1) functional (temporary), 2) structural, 3) cyclic and 4) hidden (frictional) unemployment. Within the context of social development the cyclic and the structural forms of unemployment are to be paid a special attention.

Toward the end of our century neoliberalism, as a radical capitalist ideology, together with unemployment, are phenomena sweeping across Europe. It should be emphasised that between these two phenomena there is a dialectical unity of opposites. The realisation of the neoconservative revolution programme embodied in neoliberalism implies the renewal of the privatisation process and crude pragmatism in the function of enhancing profit. This, in turn, causes a decrease in employment and dehumanisation of social relations. In the “ice water of calculations” the neoliberals would like to dissolute all the old and new social relations and institutions that protected the interests of labour. The implication is an unscrupulous suppression of the social role of the state, as well as the one of the trade unions in contemporary society.

Despite the technological advancement of the modern world, the unemployment phenomenon is ever more intensively spread. Thus, it should be stressed that there are various causes and consequences of this phenomenon upon the “North” and the “South” of the world at large. With respect to the world-system analysis of I. Wallerstein, the world consists of a developed world centre, semi-periphery and periphery. In the world centre “the great transition” is dominated by the shift from the classical industrialism to the post-industrial society. New technologies have helped it to pass from “the kingdom of necessity” to the “kingdom of freedom.” New production forces, embodied in the scientific-technological and automated production system have changed the role of man in the work process. Social scientists have been increasingly talking about the work force role of new technologies, instead of the so-called living work whose use is reduced to minimum. A radical change has taken place in the contents and character of work. Work has taken on an intellectual character. The work hours have been shortened. The phenomenon of work de-qualification is spoken about as well as the emergence of the so-called “portfolio worker” who has abilities for doing many jobs and, due to this, he can change jobs throughout his work life. What is also spoken about is the end of the work society (in the studies of A. Gorz and G. Ruffkin).

In these highly developed industrial and post-industrial societies people have emancipated themselves from work. The post-industrial revolution has been carried out by robots. The society of emancipated work is searching for a new philosophy of living on the other side of the necessity kingdom where the possibilities for an increasing expression and realisation of human beings are widely open.

In the highly developed industrial and post-industrial societies unemployment is an expression of essential changes in the work contents and character, of new technologies, new production methods and high work productivity, shortened work hours and a new way of living due to the power of the Third and Fourth scientific-technological revolutions. The changes have realised Gorz’s prognosis and sent the “good-bye” message to the proletariat. Unemployment in this kind of society is not a social “drawback” but a true expression of its progress. In their development these societies tend to free space for expressing human individuality. This kind of unemployment does not humiliate human dignity since such societies, with their standard of living provide opportunities for human development outside work. This kind of unemployment shows the mankind development perspectives by which human self-realisation capabilities will be realised.

If the unemployment phenomenon is regionally analysed, its unequal distribution will be noticed. The lowest unemployment is in Japan, followed by the USA, and finally by the European Union. The statistical data about the unemployment rate within the European Union for its 15 members show that in 1998 there were 17,9 millions of unemployed (that is 10,8%of the labour force) while the highest unemployment rate (20,5%) was in Spain and the lowest (only 3,6%) in Luxembourg (AFP-Politika, 1998):

Table 1

Unemployment in the European Union (1997)

(unemployment rate as percentage of work force)

Spain 20,5%

Finland 13,2%

Belgium 13,2%

Italy 12,4%

France 12,4%

Germany 11,8%

Ireland 10,3%

Greece 9,8%

Great Britain 7,1%

Portugal 6,5%

Sweden 6,5%

Holland 5,2%

Switzerland 5,2%

Luxembourg 3,6%

Source: AFP - Politika (January, 18, 1998)
In the world’s semi-periphery and periphery, regarding the unemployment phenomenon, there are ongoing processes having another causal matrix. These societies have been facing another structure of problems marked by technological, economic, social and political limits in their development. That is, they are confronted with the problem of technological and economic underdevelopment as well as with the phenomenon of unemployment arising from it. This is a rather wide range of dependent societies starting from the so-called world pariahs up to the developing countries of the so-called Third World. Most of these societies are facing the problem of shifting from a traditional society type to an industrial one, or from an authoritarian economy to a pluralist democratic open market system.

Regarding the locations in the three-part world picture, in these countries today there is an ongoing transition process, but at the low technological level of the first or possibly second industrial wave. This is the world of dependent societies of the classical world periphery or the newly created world semi-periphery. It is emerging in the zone “of transition and choice” from the formerly socialist societies that are today in the process of post-socialist transition. Regarding their historical tradition, as well as their structure and social development strategies, the post-socialist societies are not homogenous. They are confronted with diverse structural contradictions and challenges.

Sociologically speaking, at the farthest “South” there are the least developed, and dependent societies of the world periphery. They are characterised by underdeveloped production forces, as well as by a high economic, social and cultural poverty. They still have the traditional social structure dominated by the primary production sector and by high unemployment. These societies are still on “the floor of history,” faced with the classical poverty, social misery, disease epidemics and elements of the classical colonial slavery.

In the world semi-periphery there is an ongoing shift to the industrial way of production. These are societies with various levels of technological development, starting from those whose structure, among other things, comprises the third wave production forces, to those that are being transformed from traditional into industrial ones. They include the developing countries, as well as those of mid-development in addition to a number of the so-called post-socialist societies that are in the zone of “transition and choice” (S. Huntigton).

The post-socialist societies in transition make up a wide range of societies from the Central, East and Southeast Europe. Apart from the fact that their common denominator is their transition from a one-party authoritarian system with command economy type to a democratic pluralist society of market economy type, among these societies there are considerable regional differences. These differences are reflected at the level of their technological development, in their cultural legacy, and also regarding the chosen development strategies and the chosen model of managing the social changes (Mitrovic, 1996):

Table 2

Type of transition, strategies and societies (typology of post-socialist societies regarding the social direction of their transition)

Transition Type Strategy Model (with key Society Type

conceptual determinant)

1. Inverse, regressive, Re-traditionalisation Traditional, pre-civil,

premodern (ethno-feudalism, proto-modern

tribal society)

2. Reversible, neoliberal Dependent modernisation Capitalist, Peripheral,

(neoliberalism) Dependent

3. Reversible, Deformed real-socialist Semiperipheral,

neoconservative modernisation polytocratic


4. Progressive Socialdemocratic Modern, developed,

socialdemocratic modernisation, partnership pluralistic,

(transition with social (social partnership, social socialdemocratic society;

responsibility) state, “welfare state”) society of democratic

The choice of an adequate development model has some implications upon the growth, development and progress of the society. It also affects unemployment. The societies following the re-traditionalisation strategy are moving towards the restoration of the “closed society” model. This strategy leads to conserving the social structure and to social stagnation. The same also holds true for the societies following the neoconservative development model which is a symbiotic model of neoliberalism in economy and overcontrol in politics. Both strategies produce, in fact, blocked transition societies. These societies do not open up to the modernisation processes, as well as to reform, democratisation and integration. Therefore, they are in a state of permanent crisis, and suffering from a social seizure or being under siege. They are stagnating and destroying their own production forces, melting the already existing social structure. It is in these societies that the phenomenon of unemployment is increasing while the social misery is spreading. These societies are highly prone to anomie and conflict. They are societies of “mechanical solidarity” that live in the past, unable to cope with the challenges of modernisation, or to open up to the development forces of the future. Unfortunately, they comprise a great number of the Southeast European societies.

Unlike these societies, the post-socialist societies in Central Europe are following the model of neoliberal or social-democratic liberalisation. These societies tend to break through the crisis circle as soon as possible; in the transition process they turn more resolutely to modernisation, reform and development. This is reflected in their production forces' development, altered economic structure, openness to modernisation processes, as well as a radically different attitude to human resources and quality of life.

2. Review of the Structure and Dynamics of the Unemployment Phenomenon in Serbia and the FR of Yugoslavia in the Last Decade

Since the late eighties Yugoslavia has been one of the mid-developed countries. In the period from 1953 to 1971 it achieved, by means of intensive industrialisation, one of the highest rates in the national product growth within the range from 8% to 12% (Sekelj, 1990: 14):

Table 3

GNP growth rates, 1953 - 1971 (In %)

Yugoslavia 9,8 Different Methodology

South Korea 15,7 Nicaragua 10,3

Japan 13,8 Panama 10,2

Israel 9,6 Egypt 13,2

Mexico 9,0 Ecuador 10,09 (1958-1971)

Venezuela 8,2 Syria 10,06

Philippines 7,2 Turkey 11,1 (1958-1966)

Italy 7,1

FR of Germany 7,1

France 6,2

Source: L. Sekelj, Yugoslavija - struktura raspadanja, Rad, Belgrade, 1990, p. 14

The later development brought Yugoslavia into a great discord with its official programme of social development. As compared to other Eastern European countries, Yugoslavia had a more liberal model of government embodied in the socialist self-management system that undoubtedly gave rise to mobilisation of social forces. Thus, it provided for the society’s growth and development. However, the formalisation of the worker and social self-management system on behalf of a politic-bureaucratic layer, as well as the confederalisation of the country in the seventies incurred the economic re-feudalisation and strengthened ethnocentrism. The contradictory game of interests led to a disintegration of Yugoslavia from within and broke the country apart. Of course, there were also some geopolitical and geostrategic pressures from abroad.

With the implosion of real-socialism starting from 1989 the process of transition of the Yugoslav society was started. It went hand in hand with the disintegration of the Socialist Federative Republic of Yugoslavia as a state. The process was accompanied by a bloody civil, ethnic and religious war in Croatia and Bosnia. All this left very serious consequences upon the transformation processes of the Serbian society as well as on that of the FR of Yugoslavia.

There are important sociological studies regarding the dynamics of the 90’s crisis in Yugoslavia and its consequences upon the quality of living (by Lazic, Mrksic,, Vujovic, 1994). They point out at the social product drop in Serbia, at real income along with the poverty coefficient growth. These social analysts suggest that the poverty coefficient in Serbia amounted to 15,37 in 1978, 19,5% in 1990, 19,0 in 1992. In 1993, however, between 50,0% and 70,0% of the population were under the poverty line.

Between 1990-1994 Yugoslavia lost about 60% of its national product. The national product per capita fell from 2,148 dollars to about 900 dollars in 1993. It kept on declining in the following years with some slight corrections. Analysing the structure of the social groups and social categories within the poverty circle, one may notice that up to 1990 the poverty structure was dominated by the peasantry (64,7% in 1978). In the early nineties the urban population began to take over. The majority of the poverty-stricken population more and more belongs to the low and middle layers of the urban population.

The hyper-inflation in 1993 led to the pauperisation of the population as well as to the destruction of society. In the first half of 1994 already a third of almost 2,1 millions of people in the central Serbia were pauperised, while poverty stroke virtually all socio-economic groups, especially miners and industrial workers, almost half of whom were pauperised. The employed in administrative services as well as in other sectors of the so-called public domain joined them. Researchers estimate that over 90% of the Serbian population is threatened by poverty. Thus, we cannot speak about quality of life any longer, but rather about social distribution of scarcity and misery, and about survival strategies.

Under the conditions imposed by the war environment, the FR of Yugoslavia practised the process of controlled and limited re-privatisation along with a powerful role of the state and the ruling party in the socio-economic processes. Along with the sanctions imposed on Yugoslavia in 1992, this had a negative effect on the economic development. The country underwent through the break-down of its economic system and the greatest inflation in the world that destroyed its society.

Under the conditions of intense recession, economic collapse and altered social structure of society, we are facing the phenomenon of blocked transition but also of the destroyed and humiliated society. Regarding the changes in the social structure of the emerging post-socialist society, we have to notice a new structure of classes and layers. More than two-thirds of the population is at the social bottom. Only one-tenth of the population experienced a rise. This is the new bourgeoisie which is constituted of three layers: 1) mafia-profiting fraction, 2) nomenclature bourgeoisie, and 3) new entrepreneurs (Mitrovic, 1996: 262).

In a political sense, apart from the new entrepreneurs, the first two fractions of neo-bourgeoisie are conservative. The carrier of the innovation process, modernisation and social progress is the new entrepreneurial class, constituted of various social groups and professions. It is open to knowledge, science, new technologies, engineering and management.

Under these conditions of blocked transition, the phenomenon of unemployment has been increasing in Yugoslavia. If the unemployment phenomenon dynamics and structure are taken into consideration, a permanent unemployment growth is to be noticed (Uzroci i posledice, 1997: 217):

Table 4

Persons seeking employment

Persons Seeking Employment
































The rapid increase of unemployment continued even after the application of the economic renewal programme (1994, the so-called Avramovic’s programme). Within the total figure the number of those seeking employment for more than three years has been increasing. Therefore, the Yugoslav unemployment is mainly characterised by long-term unemployment. In the structure of the unemployed, according to data from 1996, the unemployed who look for a job for the first time make up 69%, while those who were employed but lost their jobs due to restructuring of the economy make up 31%.

If unemployment in Serbia is viewed more closely, it can be noticed that the greatest unemployment came about in the industrial sphere and, regionally speaking, in the urban industrial centres. Likewise, the greatest number of the unemployed is among women and young people. The number of unemployed with high school or university degrees is increasing, while since 1990 there has been an emigration to the West of experts with university grades (including those with master’s degrees or doctoral dissertations). The dynamics of general unemployment in Serbia is as follows (Federal Institute of Statistics: 1995):

Table 5

Unemployment in the Republic of Serbia

Year Rate of Hidden Rate of Real

Unemployment Unemployment

1990 23,0 19,5

1991 25,5 21,0

1992 42,6 22,2

1993 56,7 22,6

1994 52,1 22,7

1995 47,2 24,2
The number of employed in the public and state sectors has been continuously declining since 1989. According to the data from 1996, there were 2,363,000 employed persons in Yugoslavia. In the same year, there were 835,000 persons seeking employment. The employment growth in the private sector within the same period of time slowed down the fall of the overall employment, but in no essential way, since there was no privatisation done in Yugoslavia which would be at the same scale as in the other East and Central European countries. Today 33,5% of the unemployed are from 25 to 34 years of age. Three-quarters of the unemployed have been looking for a job for more than a year. In this context, the surplus of the employed should be also stressed, that is, the hidden unemployment. According to economists’ estimates, in 1990 there were 17-20% employed surplus, while it is estimated that today in Yugoslavia there are 40-50% employed surplus in the so-called state and social sectors. Thus, the real number of the unemployed in Yugoslavia amounts to 1,8 million. The situation in the region of Nis might exemplify the gender structure of unemployment (Izvestaj o realizacji programa rada, 1999: 41):

Table 6

A survey of job seekers regarding the municipalities in the region of Nis
Municipality Job Seekers

Total Women

Nis 38050 22727

Merosina 1692 912

Svrljig 1864 969

Gadzhin Han 1190 592

Doljevac 2525 1309

Aleksinac 5374 3086

Razhanj 557 331

Pirot 6374 3506

Dimitrovgrad 1164 544

Babushnica 1180 534

Bela Palanka 1174 601

Prokuplje 5077 2980

Blace 1355 651

Kurshumlija 1833 1043

Zhitorada 1822 967

Total 71231 40752

The regional analysis of unemployment in Serbia and in Yugoslavia shows that unemployment density is concentrated in the urban regional centres. In the region of Nis, the number of persons who are looking for jobs for the first time in December 1998 was 44,657, that is 62,7% of the overall number. In the structure of the job seekers, regarding the duration of their looking for a job, the greatest number waits up to one year (13,401), over three to five years (12,378) and over 10 years (12,163 persons) (Izvestaj o nezaposlenosti u 1998, 1999: 4).
3. On the Causes of Unemployment in Yugoslavia

Unemployment in Yugoslavia has a profound causal syndrome. It is the interaction of numerous factors that generated it. Four of the key factors should be specially pinned down. These are: 1) long-ranging economic and social crisis, mostly inherited from the old regime; 2) state of blocked transition, related to the re-traditionalisation model and to the neoconservative transition strategy that slows down the process of structural transformation of economy with respect to the modernisation and reform requirements; 3) the war environment and its effects upon drying up economic potentials, and 4) international sanctions introduced against Yugoslavia in 1992.

Unemployment in Yugoslavia has its historical dimension. On the eve of the disintegration of the SFRY there were 607,313 unemployed persons in Serbia and Montenegro (that is, the present FR of Yugoslavia). The disintegration of the country, the war, the accompanying sanctions, and especially the slow process of structural adaptation of the economy (in the technological and production sense) to the new market environment have been the decisive factors affecting a further crisis and production recession, hyperinflation and mass long-term unemployment. The growth of unemployment is also a manifestation of the surplus of work force in particular branches and activities in the aftermath of the large industrial systems’ disintegration. One additional cause of unemployment growth is related to the incapability of the actors to take more decisive steps toward modernisation and reforms. It is in Serbia and the FR of Yugoslavia that the property transformation is the slowest of all. Due to the war and the sanctions, as well as to the increasing contradictions and conflicts in the region, there is a weak influx of foreign capital and investments. This also limits the possibilities for further growth and development just as it reduces the employment prospects and increases unemployment. Another peculiarity of Serbia and the FR of Yugoslavia is the considerable influx of refugees from Bosnia and Croatia. This makes the serious social and economic situation even more complex. To this polyphony of possible causes and factors that generated unemployment, other numerous factors of objective and subjective character can be added, including the international aspects of the problem. Still, we could also add that it is primarily a manifestation of an unresolved social crisis as well as of increased structural contradictions in the transitional process. The crucial issue is the slow and inadequate structural adaptation of the economy and social structure to the new modernisation and development needs at the end of the twentieth century.
4. Consequences of Unemployment

The consequences of unemployment are various. They can be roughly divided into three groups: 1) consequences upon social development, 2) consequences upon social relations, and 3) consequences regarding alienation versus emancipation of man. The sociological and socio-psychological research on these phenomena points out at the specific transformation of the social groups involved in unemployment. The transformation regarding social structure changes the unemployed from a heterogeneous and impersonal category to a marginal group with a high degree of social isolation.

The unemployed represent a heterogeneous group in the social structure made up of members of various professions and layers whose common denominator is that they are jobless. This de-classed group at the social bottom consists of lonely marginals that are more and more increasing in number in the post-socialist societies in transition. In the course of time they may transform into social rebels. In association with other groups they can trigger social explosions or conservative tendencies in social changes. The unemployed most often serve to the populists and social demagogues as an instrumentalised mass for achieving their pragmatic goals. The insecurity of their social position can be used by various authoritarian forces in the fight against reform processes, modernisation and democratisation of society.

If we are apt to creating a humane social development and a “sane society”, then we need radical structural reforms in the post-socialist societies. The reforms should provide for growth and development, for re-affirmation of the human factor, full employment, people’s involvement in the world of work and taking the responsibility for progress. Therefore, the development of production forces and the realisation of the social right to work, as it is written in the Universal Declaration of Human Rights (“that everyone has a right to work”, that is employment), are very important factors in the post-socialist transformation. The process is contradictory and painful. The economic and cultural elite must have a rationally conceived programme of development and social policy measures whose realisation will provide for a timely structural adaptation of the economy to the modern market requirements. The programme should include measures for concurrent re-qualification of the work force and an adequately developed social policy. In all these social transformation processes, science should provide for a real and timely estimate of the social costs of the transition to modern, open, pluralist societies with market economy in order to engage all the development factors. The necessary step towards reforms should be accomplished in order to provide for further growth, development and progress of society.


AFP -Politika (1998) January 18.

IZVESTAJ O NEZAPOSLENOSTI u 1998 u regionu Nis (Bulletin on Unemployment in 1998 in the Region of Nis) (1999) Nis: Republicki zavod za traziste rada (in Serbian).

IZVESTAJ O REALIZACIJI PROGRAMA RADA u 1998. godini (Bulletin on the Realization of the Governmental Programme in 1998) (1999) Nis: Republicki zavod za trziste rada (in Serbian).

MITROVIC, L. (1996) Savremeno drustvo. Strategije razvoja i akteri (Modern Society. Strategies of Development and Actors). Belgrade: Institut za politicke studije (in Serbian).

SEKELJ, L. (1990) Jugoslavija - struktura raspadanja (Yogoslavia - the Structure of Diissolution). Belgrade: Rad (in Serbian).

UZROCI I POSLEDICE socijalne diferencijacije u nasem drustvu danas (Causes and Consequences of Social Differentiation in Our Society Today) (1997) Pristina: Pravni fakultet Univerziteta u Pristini (in Serbian).

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