Slavery for the young and highly educated in Croatia

 

Usually this story is reserved for the American student that has $60,000 or more in debt and no job, no experience. But this time, I would like to focus on my home country and its ridiculous new law.

The new law that came in effect gives the option to unemployed youth with a university education to enter a worker experience program and get paid 1600 HRK a month for doing so. 1600 HRK = $290. This will help, as we are told, to alleviate the grand number of students which have no work experience whatsoever. The minimum wage is 3000 HRK.

For an employer who wishes to employ such an individual doesn’t have to pay in for social security, medical or any related taxes. This one year program doesn’t count toward the years of labor service and doesn’t count as accumulated time for pension qualification. The employer gets slave labor, because its now legal for any employer to do such a scheme, void of paying any taxes. This is the way out our leaders think of the youth unemployment.

They don’t do the correct thing: letting nominal wage deflation to occur (which should have occurred in a deflationary environment during the crisis) so the price of labor sets at a more competitive level which would allow a more flexible job market and a lower barrier for entry into the workforce. It doesn’t eliminate progressive taxation and the pay-as-you-go social system of retirement which is going to be a burden on my generation as the employment level falls and more people exit the labor force. No. It doesn’t do that. It sets the price of labor at some arbitrary level and makes it law. What stops the employer from firing the individual after that year and rehiring the same person after a certain amount of time passes, paying him the same amount?

Nothing.

The bargaining game which occurs in the free market is taken out and the employer now has massive leverage to do whatever he wants. The youth can’t stand on its own with this kind of pay and a estimated inflation rate of 3,5% per annum. Indebted servitude anyone?

This is truly a lost generation.