Discrimination in the labor market as a concept emerge in the 1950s, with the pioneer study of the models of discrimination by Becker (1957). In the study, Becker develops models of economic discrimination, with two classes: competitive model (statistical and taste based discrimination) and collective model (based on gender and ethnicity). Today there are three widely known economic models of discrimination: Discrimination by the employer, Discrimination by the costumers (taste discrimination) and Discrimination by the colleagues (Ehrenberg & Smith, 2012). For the purpose of this paper in the analysis part I will used just the first two models.
The definition of the discrimination in the labor market comes from the Nobel laureate, Kenneth Arrow, who define it as an assessment based on the personal characteristics of the employee that is not related to his/her productivity. In other words, if two employees have the same level of education, experience, age and occupation, but are treated differently based on demographic characteristics, then there is a basis for discriminatory treatment in the labor market (Arrow, 2003). The discrimination practice is shown through variances in monthly income consequential from the characteristics of the group (community) into the labor market (pre - market differences such as education, work experience), and differences in the way groups are treated by actors in the labor market. In this regard, ethnic discrimination in the labor market is manifesting through two forms:
- Employers sometimes pay less salary to a minority groups compared to the majority that have the same experience and work under the same conditions in the same occupation - discrimination based on income/ salary
- Members of a minority group with the same education and production capacity are significantly represented in those professions that are low paid and/or occupations where employers act according to levels of power to ensure paid positions for majority groups - discrimination based on professions
Nevertheless, discrimination in the labor market is extremely difficult, and almost impossible in the absence of ethnic segregated data. However, in the economic literature there are methods that allow to get some indication such as:
Practical aspects of the labor discrimination in Macedonia
The bi-polarization of the country and its institutions after the ethnic conflict in 2001 led to serious distortions in the labor market (Kacarska, 2008). In such a situation, the private sector is guided not only to maximize its profit, but also to hire the same ethnic origin workers. For example, if there are two people who are competing and both of they have the same qualification (Macedonian and Albanian or Roma), it is obvious in such a conditions that the employer will choose an employee who belongs to his/her community. This situation replicate the reality after the ethnic crisis, where practically the labor market was divided between the two largest ethnic groups (Janeska & Bojnec, 2011; Micevska, 2008). In such circumstances, Roma were the winners but also the losers at the same time. Partly winners due to the guaranteed representation in the public administration (Ohrid Framework Agreement, 2001), but also losers because the prospective for employment were lower since the market was ethnically divided.
From the other viewpoint, the prejudices and stereotypes in society towards Roma have negative impact in the economy and contribute significantly in creating perceptions of employers and their choice of employment. In this respect, the perception of Roma by the society is based on the media reports, which is directed only on presenting the exotic / negative image in order to draw public attention. These factors contribute significantly to the creation of so-called “statistical discrimination”, which is based on stereotypical views of employment services in the state agencies and employers. For example, in the absence of any available information about the candidates and their abilities, the employer’s decision is based on the visible features of the ethnic group. In such a circumstances, the employer will not hire a worker from an ethnic group that has bad public image (Neckerman & Kirschenman, 1991).
Nonetheless, for the purpose of this analysis I will use the following two models of discrimination in the labor market, including Discrimination by the employer and Discrimination by the customers.
- Discrimination by the employer
This model is a prime example of the existence of discrimination in the labor market and is most present in relation to the others. The discrimination by the employer is based on the employer's willingness to hire/fire a group of workers on their own will. A typical example is the current case where the employer (City Mall) requires from the service provider (Land Service) to fire the employed Roma without any further explanation. The economic power of the employer allows this behavior to pass unpunished. The consequences of such irresponsible behavior towards the Roma people have financial and psychological effects (Deitch, Barsky, Butz, & Chan, 2003). Losing a job demotivates them to actively seek employment and discourage people to invest in education and additional qualification. These things have a domino effect and are transmitted to a wider group of people, with negative anomalies in the labor market. These distortions have an implication to the country level in terms of lost social contributions and taxes.
The differences in the levels of employment/ unemployment of the Roma people and other ethnic groups might be a reasonable proxy for presenting this model. In Macedonia, the difference in the rates of employment and unemployment of different ethnic groups is following:
Table 1 presents the differences in rates of employment and unemployment of the Roma community compared with other groups. The most striking observations are the comparisons with the smaller communities, such as the Serbian ethnic group that has a higher average employment by 22.5 percentage points over Roma. Moreover, Roma has 47.6 percentage points higher unemployment rate compared with the same ethnic group. These findings indicate significant differences in terms of education, experience and different treatment of the groups. The gender differences are even significantly higher compared with the smaller ethnic groups.
The decomposition of employment based on the educational level, according to the national census in 2002, shows that Roma has significantly lower level of education compared with all the other ethnic groups. Therefore, one could argue that the employment/ unemployment level is determine by the education credential of the individuals. Nonetheless, the arguments shows that Roma face with crowding effect in the labor market due to the polarization in the labor market (Smith, 2013). According to Dennett & Modestino (2013) this phenomenon is transmitted to the ethnic minorities that lack human and social capital in the society, in this case Roma.
Another indicator that shows the different treatment of the Roma community in the labor market is the employment level in the public administration. According to the Ombudsman's report in 2011, the employment rate of Roma is 1.3%, which according to the Ohrid Framework Agreement, significantly deviates from the planned 2.6%. Even in terms of those 1.3% percent employed, the distribution level of the positions were Roma are employed differ significantly in relation to other communities that are smaller than the Roma community.
Table 2 illustrates the representation of the Roma community in the public administration in relation to the Non - Roma. Undoubtedly the low representation of Roma in higher positions in the public administration shows that Roma are not equally represented as the other smaller ethnic groups. Only 0.2 percent of Roma are employed in the higher level position. In this respect, the equal representation in the public administration according to the Ohrid Framework Agreement is not working for Roma.
- Discrimination by the clients
The following model describes the discrimination by the customers that have the desire to be served/ not served by a particular community/ethnic group. Such a case occurs when a group is pushed from the labor market into certain professions, such as, for example, services in restaurants, clubs, hotels, or in some high profile's professions that are in direct contact with customers.
This contributes to the existence of the phenomenon of segregation of jobs, where due to the above factors one group; in this case Roma is significantly represented in low-paid job positions. In this framework, a UNDP research, conducted in 2011, confirms the above indications:
Undoubtedly, the high representation of Roma in low paying professions suggests the existence of so-called job/ occupational segregation. The data in the table confirms that Roma are significantly employed in commercial services (haircut, textiles and cleaning), construction which are considered as low paid jobs. This profile of job is also linked with the levels of educational attainment and the discrimination that exists before entering in the labor market.
Conclusions and recommendations
Although the discrimination in the labor market is difficult to determine, the unequal treatment of Roma shown by various examples and data confirms the presence of this phenomenon. I argued that this phenomenon contributes significantly to the high rates of unemployment, and the representation of Roma in low profile paying positions. Undoubtedly, education and work experience primarily affect the labor market. In this context, the pro arguments show that Roma have lower levels of education and less work experience and thus follow the high unemployment and the segregated working positions. Contrary to these arguments, the numerous examples demonstrate that the existence of discrimination in the labor market. In addition, the discrimination in the education contributes Roma to start in the labor market with already acquired differences in terms of knowledge and skills.
In order to improve the condition of the Roma in the labor market and to avoid the practices of discrimination the following recommendation should be implemented:
- Creating social capital
The crucial factor that is missing in the Roma community is the lack of social capital. What exactly this terms is about and why it is essential for a community to have a social capital? The principle of social capital lies in the development of social ties and values towards collective action. Simplified and adapted to the Roma case, this means connecting the Roma across Europe through shared interests and values aimed at opening businesses and employing Roma. The potential of the Roma diaspora is high; which combined with favorable opportunities for opening a business in Macedonia would mean full benefit for the whole society. Throughout the history there have been a variety of examples, including African - Americans, Jews, Turks, Albanians, Vlachs etc. Even though is a long process that requires creation of values based on trust and strong sense of belonging - identity, it is not impossible. It requires time and building relationships with the Roma abroad; enhancing communication and intensify it as well as to redirect the kinship ties in the development of economic interest; creating business relations with other communities etc. This social ties cause economic power that can contribute in opening Roma businesses.
- Creating and Maintaining the Human Capital
The knowledge, experience and skills of an individual or group reflects the potential of the human capital of a community in a society. The creation of the human capital within the Roma people started much more later; by that time other nations had practiced this in term of developing personal and group progress in the society. However, to develop a long term strategy for creating and maintaining the human capital we need to meet the following prerequisites:
- Developing an environment that contributes to the development of Human Capital
1. Home environment – There is a need of developing a long-term strategy for cooperation with parents, especially on their commitment and enthusiasm to support Roma students. Undoubtedly, it is necessary to convey positive values in the future students about the value of education and the social responsibility towards their community.
2. Community - The environment within the community involves creating a cultural capital of the, where certain norms related to community progress and civic participation should be carry out in order to exploit the given political and economic opportunity.
3. Educational institutions - In this context, it is crucial not only has the physical conditioned of the institutions, but also the environment in which Roma students are studying. First and foremost it should be consider the quality of the teachers and their attitudes, relationships and responsibility towards the Roma community; investing in Roma teacher and ensuring proper equipment in the school. These factors determining the success of students and creates an atmosphere where all students have the same equal opportunities and the same starting role in education.
- Performance / achievements
The absence of a longitudinal data made impossible to derive conclusion about the progress of the Roma community or the effectiveness of certain policies. Often, cross-sectional studies done by international organization (UNDP; World Bank; FRA others) present the snapshot of the situation that Roma face - regardless of the biases that they have in their methodology (focusing on the highest concentration of Roma settlements which presents the situation of the poorest Roma; whereas Roma middle class is practically not included in the sample since they are living in the urban areas not in the settlements, the incentives to answer the questionnaire etc.)
These statistics does not describe the actual achievements of the Roma community in the field of education through the years. These statistics, are used by many Non-Roma and Roma NGOs in their reports in order to attract donors, which according to me reinforce the negative stereotypes of Roma. In the end of the day, we Roma are the ones who make our image in the society, we are the ones who should present the positive stories and achievements; show the Roma role models in the community where younger generation can draw successful examples. In this regard, the current Roma NGOs have to develop communication strategies with the broader public and demonstrate their impact/ achievements in the community. Along with this, research centers and studies from Roma about Roma have to emerge, in order to deconstruct the biases that Non-Roma researches fall into when they write about Roma.
- Distribution of Human Capital
As part of the creation of a long-term strategy for the human resources, it should be analyzed the fields in which there is a lack of Roma students. It is essential to invest and stimulate those areas where Roma can have the greatest benefit and highest added value. It is necessary to develop clear vision and estimate in which fields to invest –IT; economics; medicine; politics, science, public policy etc.
- Develop a strategy for response
Reactions to different types of discrimination should be directed to address the source of the problem. In this regard, creation of a coordinative body (NGOs, students, politicians) that is willing to accept the burden and consequences of the reaction. Consequently, such a reactions should be shared, communicated with a larger public in order to create alliances and massive support from different groups. Individual reactions may have weight only if they grow in group ones, targeted towards defined objectives and to the following types of actions:
- Protest - Organize massive protest in order to demonstrate the significance of the committed action and alarming the system institutions to engage in solving the case.
- Official request to the competent authorities to resolve the case. In this context, it is needed good coordination between lawyers and Roma NGOs
- Developing partners - domestic and foreign partners / stakeholders / citizens / NGOs who are willing to express their support.
- Monitoring of the case / Protest - This process includes monitoring within the respective institutions, and on-time reporting to the all stakeholders that have to pressure the institutions to resolve the case
The combination of the above recommendations contributes to overcome the discrimination in the labor market towards the Roma community. The process of developing and linking the social and human capital is especially beneficial in the long run. In this respect, international organizations facilitate and support the process of creating networks and developing of social capital in the countries. However, the failure to take action in cases where discrimination in the labor market occurs means its acceptance. In order to evade this practices, Roma interest groups should operate in a democratic way and to use all the necessary means to resolve such situations.
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