ODS wants people to earn social benefits

Just weeks before October's local elections, the Civic Democratic Party (ODS) is proposing a plan that would make people work for their unemployment benefits, a move critics are calling too costly and unhelpful.

People who have filed for unemployment will receive an offer within one month for a public service job, further job training or education, according to the proposal, announced Sept. 7. However, people participating in the program will not receive a salary, and if a person chooses not to accept the offer, they will lose any claim on social benefits from the state, including social and pension insurance, according to ODS spokesman Tomáš Bartovský.

Jaroslav Zavadil, president of the Czech-Moravian Confederation of Trade Unions (ČMKOS), said the plan was a way to force people off unemployment and take away their benefits, which would increase poverty in the country.

"It severely punishes the people affected by the crisis due to unemployment," Zavadil said. "Now, for example, an undergraduate looking for work will have to sweep up dog feces. Nobody finds a job in one month in this crisis period, and if they refuse to participate in public works, they will remain without resources."

Bartovský said the main focus of the program is to address abuse of the social benefits system, whereby people sometimes work illegally while receiving unemployment benefits, and to give the unemployed experience that would make them more attractive hires when jobs do become available.

"The unemployed can rely on help from the Bureau of Labor in his or her search for a new long-term job," Bartovský said. "And with today's Internet job-search servers, it is possible to look for a job almost constantly."

The program, which has not been voted on, would be in coordination with each regional Bureau of Labor and local City Halls, Bartovský said, and if approved, would likely start in 2012. He could not provide an exact cost for the program, but said it would be done with as little public expenditure as possible.

Economists, however, say the costs of the program will likely outweigh its benefits.

Pavel Mertlík, chief economist at Raiffeisenbank, said that based on statistics, the program would currently have to offer 270,000 jobs or positions in training programs by the end of this month. Training programs alone cost between 5,000 Kč ($258) and 10,000 Kč per week per person, he said, making the plan unfeasible, particularly with tight budgets caused by the financial crisis.

"I don't think it's financially realistic," Mertlík said. "Next year we expect total consumption to decline, so any money would help the economy, but if one looks at the expenditures it would require, I can hardly imagine it would help that much."

Tomáš Vlk, an analyst at Patria Finance, said although it was true the plan could help prevent people from falling into the category of long-term unemployed, the effect of the program would be minimal.

"I do not expect any significant influence on the economy. The statistics of unemployment may be somewhat distorted by changes in registration, but the real impact on the labor market is questionable," Vlk said. "The costs may be significant, and may limit the total saving effect."

According to the Labor and Social Affairs Ministry, the unemployment rate reached 9 percent in August with around 375,000 unemployed - up about 1 percent, or around 41,000 people, from the same time last year.

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com