Provocările şi oportunităţile ocupării forţei de muncă rurale din Regiunea Nord-Vest Challenges and Opportunities of Rural Employment in the North-West Region drd. Kinga Kerekes Universitatea Babeş-Bolyai, Cluj-Napoca Facultatea de Ştiinţe Economice şi Gestiunea Afacerilor e-mail: kinga.kerekes@econ.ubbcluj.ro Rezumat Rural employment and unemployment became an important research theme in the transition period in the EU member states, especially in the CEE countries. The highest share of the active population in rural Romania is occupied in agriculture (62.6% at national level and 58.1% in the North-West Region in 2006). Most agricultural workers are self-employed and around one fifth do not work full time. Thus, agriculture provides a low and unstable income. After its revision from 2005 the Lisbon Agenda, the most important European development strategy, shifted its focus to economic growth based on technological progress and labour force participation. The strategy has to be implemented at national level - and only coordination is at community level -, which involves serious effort from the member countries to adapt and to comply with the targets. Our main objective is to emphasise the main changes occurring in the North-West Region of Romania, with a special focus on Cluj County, which lead to the need for a new approach to the problem of rural employment. 1. INTRODUCTION After 1990 in Romania the privatisation or closure of large industrial plants resulted in a mass-layoff of workers. The dismissed workers who lived in the rural area returned to agriculture, which served as a social buffer for the unemployed. The share of agricultural employment in the rural area increased to 74.5% at national level for 2000 (INS 2005), most of them being self-employed or contributing family workers. Due to the high share of agricultural employment, the employment rate of the rural population has been higher than that of the urban population. The diagnosis was: too many people work in agriculture and there is not enough work to ensure full employment for all. Total employment in agriculture should decrease in order to increase the competitiveness of this sector (Dumitru & al. 2004). The main question raised by social scientists concerned with rural employment has been the following: what to do with the huge amount of available rural workforce, left unemployed after the broke-up of agricultural cooperatives and the privatisation of large industrial plants? Identifying new sources of employment for the rural population seemed to be the biggest problem. In 2002-2004 many changes occurred in the social and economical fields. These changes lead to a different socio-economic set-up, which also influenced the labour market: the demand for labour has increased and companies face increasing difficulties to fill up job openings. Therefore we propose a change of paradigm in what concerns rural employment. The main statements of the new paradigm are: A high number of new jobs are offered in several economic fields; Companies face problems to fill up job openings; There is an important labour force migration, mostly to the old EU countries; 1
The share of the rural population occupied in agriculture is decreasing, but still high: 62.6% at national level and 58.1% in the North-West Region in 2006 (INS 2007). According to the new paradigm, the main question to be answered is the following: how to make a fit between demand and supply on the rural labour market? 2. LABOUR DEMAND TENDENCIES IN THE NORTH-WEST REGION Data collected from several sources show the growth of labour demand. While in 2002 in the North-West Region 95.7% of the jobs advertised through the employment agencies were filled up, this share was much lower in 2005, only 73.2% (Agenţia de Dezvoltare Regională Nord-Vest 2006). The number of job openings in the North-West Region continued to increase after 2005. Data from the National Employment Agency s website (www.anofm.ro) prove that every week a considerable number of jobs are announced (for example 3,641 jobs in the week 18-25 October 2007 and 3,181 jobs in the week 7-14 February 2008). The rate of unemployment is decreasing: in December 2007 it was 2.9% in the North-West region, the second lowest after Bucharest (1.9%), while the national average was 4.1% (1.1% lower than in December 2006). The share of unemployed within the 18-62 years old population was 2.7% at national level, out of which 3.9% in rural and 1.8% in urban areas. The prediction that the number of jobs will continue to increase in the North-West Region in the upcoming years is based on several facts. The American Bechtel company had started to build the Borş-Brasov Highway in June 2004 and works will continue until 2013, offering a large number of jobs not only in the North-West Region, but also in the Center Region of Romania. According to company data (www.autostradatransilvania.ro) in October 2007 the highway project employed 4223 persons, out of which 3977 (94%) are Romanian employees (69% from Cluj and Bihor counties and 25% from other counties along the highway route) and 246 (6%) foreign employees; the number of employees increased to 4398 in December 2007, keeping the same proportions. Road constructions give work to even more people, as several other roads are being modernized all over the region. Construction workers are also very much required in the area of civil constructions, because many new houses are being raised: 5518 dwellings were finished in 2006 in the North West Region according to statistical figures (INS 2007). The number of commercial centers and malls is also increasing. In and around the city of Cluj-Napoca several commercial chains had built its shops, such as Kaufland, Cora, Metro, Profi, Billa, Praktiker, Baumax, Real and Selgros; all of them employ an important number of people. The Carrefour hipermarket opened in October 2007 employed 600 people (www.saptamana.ro/content/view/381/53) and the Auchan hypermarket opened in November 2007 offered 450 new jobs (www.auchan.ro/index.php?id=19&news=13). A big opportunity for the employment of rural inhabitants is the recently built Nokia factory, placed in Jucu village (Cluj County), 21 km far from Cluj-Napoca. The factory started its operation on 11 th February 2008 with 300 employees and it plans to employ up to 3,500 people by year 2009. Together with the companies settling around Nokia in the Industrial Park from Jucu, around 15,000 workplaces will be created in the next 5 years (www.antena3.ro/nokia-va-angaja-15000-de-romani-la-cluj_bss_29080_ext.html). If this comes true, than all working-age people from the surrounding villages would find employment, given that they meet qualification requirements. 2
3. RURAL LABOUR SUPPLY IN THE NORTH-WEST REGION According to data obtained from the Household Labour Force Surveys (AMIGO) conducted by the National Institute of Statistics, employment rate had followed a decreasing tendency both in the rural and in the urban area in 1996-2004, whereas in 2004-2006 tendencies changed, an increase of the employment rate can be observed (Figure 1.). Figure 1. Evolution of the employment rate of the 15-64 years old population in the North-West Region, 1996-2006 80 75 70 % 65 60 55 Total Urban Rural 50 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Sources: INS 2005, INS 2006, INS 2007b Unemployment rate fluctuated in the period 1996-2006, with a much lower unemployment rate in the rural area (2.6%-6.1%) than in the urban area (6.2%-10.7%). In 2006 employment rate of the 15-64 years old rural population has been only 57.9% and unemployment rate 4.7%, which means that an important share (37.4%) of the working age population from the rural area is inactive and could be approached to enter the labour market. Inactive and unemployed add up to 42.1%, which means a massive amount of unused labour force. Moreover, neither the labour force of those registered as employed hasn t been used to a full extent. Most of the employed in agriculture are not employees, but self-employed (semi)subsistence farmers or unpaid family helpers; many are underemployed. In the rural area the share of employees in total employment has been much lower in the period 1996-2006 (27.5%-42.1%), than in the urban area (89.8%-92.6%) (INS 2006, INS 2007b). The share of full time workers among the employed population has also been much lower in the period 1996-2004 in the rural area (76.1%-83.2%), than in the urban area (95.5%- 98.1%) (INS 2005). Thus, part-time workers represent around 20% of the working age population from the rural area. Even though statistical data do not allow us to conclude whether part-time workers would accept to take up full time jobs or not, we can assume that many of the part-time workers are underemployed and that with a better time allocation an important share could be dismissed and look for other employment or become unemployed. As a conclusion, in 2006 the workforce of around half of the working age rural population from the North-West Region can be considered unused: 37.4% inactive population, 4.7% unemployed and around 5-10% replaceable part-time workers. Then why do so many job openings remain unfilled? The first reason is the low level of education of the rural population. Around half of the 25-64 years rural population is low educated (primary and secondary school) and less than 2% have completed higher education (INS 2005). So, even though jobs exist, low educated people without professional 3
qualification have fewer chances to be employed and even if they would find a job, the salaries offered would be low. Other explanations for the low labour supply are given by a qualitative field research carried out in February-June 2007 in Cluj County (Kerekes 2007a). The aim of the research was to find out more about the educational and professional background of the rural unemployed, inactive and underemployed, as well as about their motivation to find a employment. The main findings of the field research were the following: Even though their educational level is low and most of them are not qualified, respondents have little willingness to attend professional qualification courses. It is noticeable that women are more open for learning than men. An important part of the working age population has never been employed, so they have no previous work experience; others are long-term unemployed. They have difficulties in accepting strict work program and discipline. Wage expectations are high compared to the level of skills; most of the respondents declared that they would accept to work for amounts exceeding 150% of the present minimum wage. Some people are only willing to work locally and refuse to commute to work. The majority of the respondents would accept to work in a different locality, but public transport is limited (also because the bad quality of the village roads) and this makes commuting difficult. Only a few of them have driving license and own a car. 4. WHAT HELPS AND HINDERS RURAL ENTREPRENEURSHIP? In the past, agriculture was worldwide the engine for growth in rural economies and represented the predominant source of rural income, employment and output. Consequently, rural and agricultural issues were considered to be virtually synonymous and it was often assumed that agricultural and rural objectives could be pursued through a single set of policies designed to aid the transition of the agricultural sector (OECD 2006). In recent years the situation has changed, in the developed countries agriculture is no longer the main sector in rural regions, either in terms of output or employment. The recognition of the role of the non-farm sector for employment and income generation in rural areas has been growing in the developing countries as well as in the European Union, the CIS and CEE countries (OECD 2006, Bezemer & Davis 2002). Bezemer and Davis differentiate two processes: demand-pull, where rural people respond to new opportunities; and distress-push, where the poorest are driven to seek nonfarm employment as a survival strategy ; these processes sometimes work together Bezemer & Davis 2002). Creating alternative income sources in rural areas is a major concern expressed in many studies, as well as rural development policies. The role of the non-farm sector is considered vital for the rural economy as a whole (OECD 2006, Bezemer & Davis 2002, Weingarten 2004, Dumitru & al. 2004, Sandu 2003, Government of Romania 2006, Davis & Cristoiu 2002 and Schrieder & al. 1999). It is also generally agreed that entrepreneurship is less developed in rural areas than in urban areas and that business start-ups occur less frequently on the whole in rural and poorer regions. Authors consider that the number of businesses in the rural area per capita of population, and their small size, are insufficient for creating significant growth (Weingarten 2004, Davis & Cristoiu 2002, Bezemer & Davis 2002, Schrieder & al. 1999 and several other studies). According to policy documents (Dumitru & al. 2004, Government of Romania 2006) the development of the rural non-farm enterprise sector is a priority issue in Romania, as it is 4
expected to reduce rural underemployment, improve the use of local resources, increase rural incomes, and ensure a better standard of living for the rural population. Still, this sector is weakly represented in rural areas and the number of agricultural SMEs is also low. Results of a representative nation-wide survey of the entrepreneurial activity carried out in 2007 (Nagy & al. 2008) also show that rate of entrepreneurs is much higher in the urban area than in the rural area. We have tried to identify the barriers of rural SMEs development and the factors facilitating entrepreneurship based on empirical data of a small-scale survey carried out in Cluj County in 2007 (Kerekes 2008). The first conclusion of the survey is that most rural inhabitants would not like to start up an own business (53.7% of the respondents answered with No, and 11.6% even if they answered Yes, did not have any business idea). 5.8% of the respondents are presently entrepreneurs. For the majority of the would-be entrepreneurs the expressed intention is a pure wish and will probably never become reality. The range of economic activities mentioned is quite diverse: animal breeding (9 respondents), construction (8), agriculture (7), hair-dressing and cosmetics (6), tourism, commerce and clothing (5 each), cooking (4), wood-processing (3), culture and consultancy (2 each), transportation, car-repair, meat processing, small industry and horse-riding (each activity being mentioned by one respondent). Factors significantly increasing entrepreneurship include: education, professional qualification, willingness for re-qualification, work experience (both in-country and abroad), to drive a car, the ownership of a car and a mobile phone and the capacity to speak foreign languages. Practising agriculture in the family also has a positive influence, but this factor mainly differentiates those with some property (and a certain level of wealth and capital) from the very poor landless village people. Those with employee status are also more willing to start-up a business on their own, which again proves the importance of financial security. Reasons given by those who don t want to start up a business are: lack of money, bureaucracy, lack of business idea, high level of responsibility implied, age, and that there would be no one to continue the business as their children moved out from the village. Most of these reasons are coherent with the conclusions of previous research (Bezemer & Davis 2002; Davis & Cristoiu 2002, Dumitru & al. 2004, Sandu 2003, Schrieder 1999 and Weingarten 2004). Lack of infrastructure, an important barrier identified by all authors, did not come out in this survey as an obstacle, given the fact that the respondents are used to their living conditions and do not find them so critical, as it seems for people coming from outside. The following conditions would facilitate rural business start-up and improve the activity of the present enterprises: improvement of infrastructure, a sound legal and regulatory environment, macroeconomic stability, provision of attractive facility packages for rural entrepreneurs, a more flexible system of borrowing by banks and credit co-operatives, programs of adult education (including vocational training, language learning and driving), better quality primary and secondary education and support for rural youth to continue education. In Romania in the last 2-3 years we could observe significant improvements in what concerns macroeconomic stability, legal environment and flexibility of the credit systems, but the development of non-agricultural activities and small-medium size enterprises in the rural area has not been noticeable. 5. HOW WILL THE FUTURE RURAL WORKFORCE LOOK LIKE? Besides the people who are searching for a job or starting up businesses, in February June 2007) 232 pupils in the 8 th form have also been questioned in 18 villages from Cluj 5
County (Kerekes 2007b). The choices expressed by the 8 th form pupils allow us to make assumptions regarding the structure of the future rural workforce: 58.2% of the questioned pupils would like to continue education in high schools and 21.1% in vocational schools; more than half aspire for university studies. The main factors of influence regarding continuing education are: gender (girls aim for more education), school results (those with better results are more likely to continue education) and mothers education (the children of better educated mothers aim for more education); Young people consider very important to be employed. Around two-third would like to work in the service sector. Occupations connected to catering and tourism are the most popular (17.1%), followed by car repairs (16.1%). There is a clear differentiation among professions preferred by gender: only a few professions are chosen by pupils of both genders. Less then 2% of the responding young people choose to work in agriculture. It is difficult to foresee what will happen to family farms, as at present the families of 77% of the respondent pupils practice agriculture and in 22.3% both parents are occupied with agriculture. These results support the older farmers opinion that young people don t want to be the slaves of the land and of animals and that the number of young workers in agriculture will decrease (Vincze & al. 2005). The issue most connected to the future of villages is the workplace chosen by rural youth. Do they look for employment in the neighbourhood (and thus, commuting every day to work) or would they like to work somewhere far away (which would imply migration)? The rate of valid answers for this question was very high (97.4%), meaning that most young people had already thought over this issue (Table 2). More than half of the respondents (56.0%) would like to work in Cluj-Napoca, the county residence; one fifth (19.4%) is looking for a job abroad (10.8% only want to work abroad and 8.6% consider this option besides others). 19 young people (8.2%) choose to work in their village. The remaining 3.7% mentioned different locations within Romania. There is not much difference between the choices of the female and male respondents, except that more boys would like to work in their locality of origin and more girls would like to work in Bucharest. Table 2. Future locality of employment for secondary school graduates from the rural area of Cluj County Locality of employment Female Male Total % Locality of origin 7 12 19 8.2 Cluj-Napoca 64 66 130 56.0 Bucureşti 7 3 10 4.3 Other place in Romania 6 5 11 4.7 More locations in Romania 6 5 11 4.7 Only abroad 11 14 25 10.8 Abroad and more locations 10 10 20 8.6 Total valid 111 115 226 97.4 Missing 1 5 6 2.6 Total 112 120 232 100.0 Source: own research It is difficult to draw any conclusions regarding the influence of parents workplace on the children s choice. The most popular location for future employment is Cluj-Napoca, regardless the family background, except for those having their mothers working abroad (two 6
out of four children want also to work abroad). Most of those who want to work abroad have mothers working in the household and fathers commuting to work. Based on the choices of expressed by the respondents and the geographical location of the village, we can assume that around 43.1% of the young people could remain in their village and commute to the chosen workplace and 35.8% would most probably move. For 18.1% the answer is not foreseeable: distances are quite long, but with good roads and transport facilities (which is not the case at present) it would still be possible to commute. 6 pupils (2.6%) didn t answer. We have also tested out the influence of values on the decision to work abroad. Answers given by all respondents are very similar to those given by young people who consider to work abroad (Table 3); bigger difference can be observed for the value of education (who wants to work abroad gives higher value to education) and for the value of seeing the world (those who want to work abroad consider less important to see the world than the average). Table 10. The influence of pupils values on the decision to work abroad Value Work place Very important Not so important Un-important To be rich All (232) 24.4% 63.1% 12.4% Abroad (45) 22.2% 66.7% 11.1% To be employed All 91.7% 7.9% 0.4% Abroad 90.9% 9.1% 0% To be educated All 82.9% 16.2% 0.9% Abroad 88.9% 11.1% 0% To have family All 74.2% 24.0% 1.8% and children Abroad 75.0% 22.7% 2.3% To see the world Source: own research All 56.85 35.7 7.5% Abroad 48.9% 44.4% 6.7% 6. CONCLUSIONS Since 2004 labour demand increased in the North West Region of Romania. New companies were established; some of them operate in the rural area. The level of registered unemployment is very low and in many fields a lack of workers has been signalled. At the same time, the work capacities of around half of the 15-64 years old rural population are unused. People are unqualified, unwilling to work (because of low salaries and strict rules) or because access to the workplace is difficult (long distances and lack of transport facilities). How will the future rural workforce look like? According to an optimistic scenario, young people will complete the education they aim for (which is generally higher than the present level of rural education); two third will establish in their villages and will have wellpaid jobs in a city nearby. Thus the population of rural areas will be maintained and the level of education and income will increase. According to a more pessimistic scenario, at least two third of the young people will move out from the villages after completing education. Thus in rural areas the level of 7
education will remain low, and the process of aging and impoverishment of rural areas will accelerate. There is also a third, conservation scenario: more young people would remain at home, because of the lack of opportunities to continue education; the age structure, level of education and professional qualification of the rural population will not change, subsistence agriculture will be practiced by many families, under-employment will stay an issue and living standards will remain low in the rural areas. The solution relies on the three I s of rural employment (Kerekes 2007a): 1. Information (education, vocational guidance, carrier planning, professional qualification and re-qualification, access to data on available jobs); 2. Infrastructure (good roads, transportation and communication facilities); 3. Incentive (good salaries, motivating reward systems, decent work conditions, positive attitude towards full-time work). Some actions should be oriented towards the rural population: better and more accessible formal educational services, vocational guidance, professional qualification courses, as well as informal trainings (to increase self-confidence, to induce motivation towards full-time work). Public authorities are responsible for improving infrastructure: repair old roads and build up new ones, organize public transport where no private companies show interest to offer this service and ensure that all communication facilities (mail, phone, internet, TV) are available in the localities. Companies should be made aware that they have to ensure decent work conditions, pay acceptable salaries and have motivating reward systems. They could also organize the transport of their employees, especially of those from the rural areas. REFERENCES Agenţia de Dezvoltare Regională Nord-Vest (2006) Planul regional de acţiune pentru ocuparea forţei de muncă 2006-2008. Regiunea Nord-Vest, Cluj-Napoca: Agenţia de Dezvoltare Regională Nord-Vest Bezemer, D. & J. Davis (2002): The rural non-farm economy in Romania: overview of findings, Natural Resource Institute Report No. 2730, pp. 2, 24. Davis, J. & A. Cristoiu (2002): Patterns of rural non-farm diversification and employment in Romania: A county level analysis, Natural Resources Institute Report No. 2639, pp. 3, 15. Dumitru M. & al. (2004): Rural Development and the Reform of Romanian Agriculture, Bucharest: European Institute of Romania, Working Paper No. 10-11, pp. 8-9, 11-14, 41-43, 46-47. Government of Romania: Regional Operational Programe 2007-2013 (Bucharest: Ministry of European Integration, Regional Operational Programme Managing Authority. 2006) pp. 12-13. INS (2007a): Anuarul Statistic al României 2007, Bucureşti: Institutul Naţional de Statistică INS (2007b) Forţa de muncă în România: Ocupare şi şomaj 2006, Bucureşti: Institutul Naţional de Statistică INS (2006) Forţa de muncă în România: Ocupare şi şomaj 2005, Bucureşti: Institutul Naţional de Statistică INS (2005): Forţa de muncă în România. Ocupare şi şomaj serii de date recalculate pe baza RPL 2002, Bucureşti: Institutul Naţional de Statistică 8
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