Job losses hard to pin down

  • 1998-11-05
  • Sandra L. Medearis
RIGA - While state unemployment figures show a country-wide unemployment rate of 7.9 percent in mid-October, the real number is probably closer to 14 percent, according to Andris Silins, director of the State Employment Board.

"We have a lot of hidden unemployment," he said, since not all employees fired have registered with the state Employment Department.

Double bookkeeping results in unemployed not showing on the unemployment rolls and employees without social tax contributions do not receive benefits.

"We have two different salaries in Latvia, the official salary with tax and some private enterprise salaries without taxes," Silins said. "Tax is very high in Latvia. A lot of enterprises have two forms of bookkeeping. Businesses say it is impossible to work with official books, because it would mean bankruptcy in the future."

Some companies have already had to throw in the towel because of lost sales and uncollected accounts. According to mid-October reports from the State Revenue Service director, Andrejs Sonciks, 96 companies had cut back production and staff while 27 companies have thrown the switches to off and locked their doors.

Just two weeks earlier, on Sept. 24, about half as many companies had cut back production and only 14 had closed. On Oct. 15, such companies had laid off 5,400 employees. Silins expects the figures available on Nov. 5 to show that layoffs doubled in the second half of October.

Jobless benefits are going to about 35 percent of the more than 90,000 unemployed. The size of unemployment checks depends on length of employment and size of the salary lost, ranging from 30 ($51.7) to 210 lats. People from enterprises that don't pay social tax and those who have exhausted the nine months' benefits are without unemployment relief.

Welfare Minister Vladimirs Makarovs said that there are reserves to guarantee eight months of unemployment benefits. Thirty percent of the jobless are chronically unemployed, and may have additional social problems. Makarovs asked that employment projects in districts with high jobless rates get first priority in funding and reminded companies and municipalities with job vacancies to list them with state employment offices.

Some of the people who have been fired from enterprises such as railway car maker Rigas Vagonu Rupnica, motor chain works Daugavpils Pievadkezu Rupnica, stockings manufacturer Aurora and Lauma textile mill will not be unemployed long, said Silins, because these people have skills desirable to employers.

"The recently unemployed have had jobs. They have been selected from a wide range of candidates for those jobs, so they are good workers," Silins said.

Sonciks reported a 1 percent loss in revenue taxes because of troubled companies' lower earnings. As of Oct. 15, 71 companies had asked for a delay on paying taxes due, revenue taxes, value added tax (VAT), excise tax and social taxes, that would mean a delay in receipt of 5.3 million lats. Fish processors have asked for more time in paying 1.6 million lats. Transport companies have sought to delay payment of 1.3 million lats.

So far, the State Revenue Service has approved three-month forebearances worth 3.9 million lats. When paid, this money will go toward next year's budget.

The good news is that even if certain sectors, such as machinery , fishing, and fish processing, textiles and food exports have been hard hit, the effects of the Russian economy will leave little permanent damage, Silins said. That damage will be in the coastal towns where fish processing is the only source of cash and in hard goods not in demand in Western countries.

Latvia's food industry will turn around, Silins said, because "people can't live long without food." He believes that the world society will help bail out Russia, enabling the country to begin spending on imports again, and that Russia will barter with wood from its forests for food from Latvian fields. Food producers can get their money by selling raw material to Latvia's insatiable wood products industry which is very strong, exporting 98 percent of output to Western buyers.

"
"