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Yugoslavia Labor and Unemployment
Unemployment was a major problem for Yugoslavia in the late
1980s. During that period, over 875,000 Yugoslavs worked abroad
and as much as 25 percent of workers employed in the productive
social sector were classified as surplus labor; nevertheless,
more than 1.2 million people were registered as unemployed in
1988. This was about one-sixth of the total working-age
population of Yugoslavia that year.
Yugoslav unemployment statistics were based on the number of
people who registered with the government as job seekers in the
social sector. Several factors caused inaccuracies in such
figures, however. Students often registered as job seekers in
order to receive better health benefits; many workers registered
if they were seeking a job better than the one already held; and
some of the unemployed did not register because they saw no
prospect of getting a job.
Because unprofitable Yugoslav enterprises often were
supported by the government and prevented from going into
bankruptcy, workers in the social sector rarely lost their jobs
before the reform of 1990. Therefore, a large proportion of job
seekers in the 1980s were young people. In 1988 over 92 percent
of the unemployed were under age forty, and nearly 57 percent
were under age thirty. Yugoslav unemployment also tended to be
long-term: according to official statistics for 1988, although
almost one-quarter of the unemployed were able to find work in
less than six months, almost 62 percent were without a job for
over one year, many for more than three years. A third
characteristic of Yugoslav unemployment was the large regional
differences in unemployment rates. In 1986 Slovenia was at
virtually full employment while the underdeveloped region of
Kosovo had more than one job seeker for every two workers
employed in the social sector.
Several factors interacted to raise unemployment in
Yugoslavia in the 1980s. Immediately after World War II, peasants
made up about four-fifths of the population. Rural workers
increasingly were forced into the cities to seek jobs, better
health care, improved earning potential, and pensions. Two
government policies stimulated this movement. Following
traditional Marxist development patterns, Yugoslavia concentrated
investments in heavy industry, directing capital away from
agriculture and further impoverishing the peasants. And the
policy of discouraging nonfarm private business eliminated a
potential alternative economic activity. Marxist ideology obliged
social sector enterprises to absorb extra labor, even if it meant
redundancy and decreases in labor productivity. (see
table 12, Appendix).
The economic reforms of the 1960s gave market forces more
influence in enterprise management decisions, which helped
eliminate excess labor. Fortunately for Yugoslavia, at this time
several West European countries required imported labor; Yugoslav
workers were encouraged to leave the country for temporary jobs
in Western Europe. Then the oil price shock and worldwide
recession of 1979 dropped labor demand in Western Europe and
forced many Yugoslav guest workers to return home. Domestic
enterprises returned to conditions of surplus labor and low
productivity. By the late 1980s, however, the guest worker force
was again contributing substantial amounts of hard currency to
the Yugoslav economy.
In the late 1980s, measures such as improved health care and
pensions attempted to raise the rural standard of living and draw
some of the unemployed out of the cities; but in 1990 prospects
for stemming unemployment still seemed poor. The primary goal of
the 1990 economic reform was to reduce Yugoslavia's runaway
inflation. But the new anti-inflation policies aggravated the
unemployment problem as they improved labor productivity
(see The Reforms of 1990
, this ch.).
Data as of December 1990
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