Job polarization and wage inequality in the Republic of Moldova

The issue of job polarization. In the Moldova, the level of the lowest salary in some activity sectors or for certain job categories, creates large salary disparities compared to other activity sectors, which has led to increased wage inequalities.

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JOB POLARIZATION AND WAGE INEQUALITY IN THE REPUBLIC OF MOLDOVA1

A.P. Birca,

Doctor habilitatum in Economics, Professor Academy of Economic Studies of Moldova (University) Republic of Moldova, Chisinau

A.I. Mamaliga,

University Lecturer Academy of Economic Studies of Moldova (University)

Republic of Moldova, Chisinau

This scientific paper treats the issue of job polarization and wage inequality. Job polarization is influenced by several criteria, the salary being one of them, which is most frequently tackled in the specialized literature. The wage level in terms of the different activity fields or professional skills of the workforce, lead to the polarization of jobs. Therefore, in the Republic of Moldova, the level of the lowest salary in some activity sectors or for certain job categories, creates quite large salary disparities compared to other activity sectors or jobs, which has led to increased wage inequalities. In order to depict the applicative aspect of the problem, the statistical method was used as a research method, using the information provided by the National Bureau of Statistics of the Republic of Moldova. Thus, the employee number was analysed by certain salary levels, as well as by the most typical activity sectors in the Republic of Moldova.

Key words: work, job, professional skills, qualification level, salaries, wage inequality.

Problem conceptualisation. Over the last decades, the polarization of work, in general, and jobs, in particular, has been the research subject for many researchers in different countries. Analysing the specialized literature, we can find that there are several criteria that can be taken into account in the polarization of work, and namely: technological changes focused on specific professional skills, increasing education, trade deregulation, increasing the service sector, employer preferences, state policies in the field, organizational changes, salary level and salary inequalities, etc. Taking into account the wide range of criteria that can be taken into account when polarizing work and jobs, in this paper we will discuss the issue of wages and wage inequalities.

Job polarization spontaneously leads to wage inequality, as the share of the highest paid jobs and lowest wages is increasing. In addition, the polarization of the workforce can also influence the wage level in occupations, by regaining new professional skills. In this respect, there may be three possible outcomes. First, there is a demand-driven situation. The change in labour demand for certain occupations also determines the change of jobs. Assuming a constant supply, the growing demand for high and low wage occupations leads to an increase in higher and lower wages, while the demand and, consequently, the wages for medium-skilled occupations is declining (Autor, Katz, & Kearney, 2008). The relationship between job polarization and wage inequality turns to be positive then.

Second, occupational changes can be determined by supply. The modernization of occupations may lag behind the expansion of higher education, thus pushing the highly skilled workforce into lower jobs, creating an excessive supply of skills associated with eroded wages (Autor, Katz, & Kearney, 2008); (Beaudry, & Green, 2003). This leads to the creation of an excessive supply for lower paid occupations, leading to salary cuts for those occupations. Meanwhile, the talented workforce stays in medium-skill level occupations, which leads to an increase in average salaries. In this case, the relationship between the polarization of occupations and wage inequality is negative.

Third, technological changes can lead to increased requirements for professional skills within occupations, while educational expansion and the growing demand for higher education skills are witnessing a period of balanced growth. This leads to increased productivity for all occupations and, ultimately, to higher wages. The direct relationship is unclear then and both salaries and employment depend on the development of professional skills in occupations rather than on their changes.

Recent research and publication analysis. Wage inequality refers to wage dispersion, and job polarization refers to the dispersion of employment. According to researchers Acemoglu and Autor, the increase in wage inequality describes a higher increase in wages at the top of the wage distribution compared to the bottom (Autor, Katz, & Kearney, 2008). Job polarization describes the moderate decrease in the average wage job share compared to higher or lower level jobs (Goos, Manning, & Salomons, 2009). Many developed countries, including Germany, are experiencing an increase in both wage inequality and job polarization (Dustman, Ludsteck, & Schonberg, 2009), both being closely linked to technological changes.

In order to explain the phenomenon of the increasing wage inequality as a result of some unequal practices, some researchers in the field have put forward some hypotheses. One of them is related to productivity differences: companies with a high level of productivity outperform other companies and have the possibility to offer much higher salaries to all employees, compared to other companies. Another hypothesis is related to the grouping of companies according to their economic performance: companies are becoming increasingly specialized, and the best performing employees migrate to the most successful companies (within the region, economic sector, etc.). However, another reason that provides a sound explanation for the phenomenon is the polarization of the types of skills companies require (Weil, 2014). Because in the late 1980s and early 1990s, a company's workforce typically possessed a wealth of skills - from simple employees to production employees, secretaries and managers. The last two decades (increasingly over the last years) have witnessed an increased level in outsourcing jobs and services to subcontractors or franchises. Employers considered it easier to outsource a part of the activities performed by their employees, which consequently were provided as services, based on contracts with independent suppliers. Under these circumstances, the workforce is no longer a broad pool of skills, and companies can employ a large number of highly qualified people and a small number of low-skilled people. As a result, low-skilled employees find jobs in low-wage sectors that currently specialize in providing these contracted products and services through outsourcing practices, while companies that use these strategies most aggressively offer higher salaries than other companies with a wider range of skills.

The inequality phenomenon within companies can vary depending on two criteria: the size of the company and the economic sector. Depending on the size of the company, it can be determined by the employment degree. As for the second criterion - the economic sector, the inequality phenomenon can be shown through the differences in labour productivity. A reduction in the wage bonus for low- skilled workers has been noticed in large companies, where the rising salaries for corporate managers, CEOs and highly qualified specialists have contributed to an increase in the wage inequality level within these companies (Autor, Katz, & Kearney, 2008).

Over the last few years, in order to reduce the wage inequality level, several countries have introduced measures to calculate or consolidate the minimum wage. Minimum wages play an important role in ensuring that employees are treated fairly and according to the norms of human dignity and respect. In addition to the minimum wage, the policies in the payment field, recording working hours and other working conditions can make a substantial contribution to the promotion of social interaction and collective bargaining, as well as ensure a fair sharing of the benefits from the economic progress for all the people (Beaudry, & Green, 2003).

The wage level and distribution are determined by a wide range of factors. Choices made in education, childcare policies or migration policies can affect the access to the labour market for both males and females, as well as for those having different qualification levels. Likewise, it must be borne in mind that trade policies or technological innovations may change the moderate demand for people with different qualification levels. The institutions on the labour market also have a major impact on wages and wage inequality. Collective bargaining allows groups of employees to negotiate higher salaries with business owners / employers, and this can have a particularly large influence on employees at the bottom of the payroll, who may have less power in individual bargaining. However, in several countries, the coverage level for collective bargaining has remained relatively low or has diminished (Visser, Hayter, & Gammarano, 2015). Consequently, several countries have turned to new and stronger mechanisms for setting the minimum wage.

Formulation of aims. The main objective of this paper is to analyse the structure of monthly salaries, as well as their evolution in the Republic of Moldova both in the national economy and in the main fields of activity.

The presentation of the main material. In the Republic of Moldova, it is difficult to observe certain trends in terms of job polarization and wage inequality, because the National Bureau of Statistics does not present information on the salary level by occupation category or by education level and professional skills. Under these circumstances, it is difficult to find connection between the polarizations of jobs with wage inequality. However, in order to understand how employees are polarized depending on the salary level, Figure 1 depicts the distribution of employees in terms of earnings, in 2015 and 2019, and in Figure 2 - for 2018 and 2019. As the salary level is presented in lei, according to the National Bureau of Statistics of the Republic of Moldova, in September the value of one Moldovan leu was 0.051 euros.

moldova wage inequalities job polarization

Figurel.Employeedistributionby salarylevelsin 2015and 2019, %

Source: Developedbytheauthors.

Analysing the data in Figure 1, we can note how much the employee structure has changed depending on the size of the monthly salary. If in 2015, more than 1/5 of the total number of employees or almost 100 thousand employees received a monthly salary of up to 2000 lei, and the number of those who received a monthly salary higher than 10,000 lei did not exceed 2000 employees. Unlike in 2015, the salary level increased in all activity sectors, and the number of employees who received a monthly salary higher than 10,000 lei was 15.8 % or almost 70 thousand people in2019.

Taking into account that the average gross monthly salary, in 2015, was 4538.4 lei, from Figure 1 we can see that almost 2/3 of the number of employees received a lower salary and a few more than 1/3 had a higher salary. (The number of people who received a salary between 4000 and 5000 lei accounted for 50 % for each lower and upper category). In keeping with the same approach for 2019, we can notice that the share of people who received a salary higher than the average grossmonthly salary wasabout43 %orabout190 thousandpeople.

If in 2015, the share of people receiving a salary nearly 1500 lei in the total number of employees was 6.9 %, in 2018, it decreased to 1.7 % (Figure 2).

Figure 2. Employee distribution by salary levels in 2018-2019, %

Source: Developedbytheauthors.

As figure 2 shows, in 2018 more than 6 % of the total number of employees received a gross monthly salary of less than 2000 lei, which is characteristic only for employees in the public sector, because the employees in the real sector received a minimum monthly salary of 2610 lei. Meanwhile, in 2019, only 0.7 % of the total number of employees received a smaller salary than 2000 lei, which is also characteristic for public sector employees. However, according to the Law on the unitary salary system in the budget sector, the reference value for calculating the salary was 1500 lei, in 2019. In 2019, the number of people who received a higher salary than 10 thousand lei increased by 4.9 per cent, compared to 2018.

While Figures 1 and 2 depict the share of employees by salary levels in the economy, Table 1 shows the structure of employees by economic activities for a better emphasis on job polarization and social inequality in 2018.

According to Table 1, in 2018, 62.2 % of people employed in the agricultural sector received a lower salary than the average gross monthly salary. Taking into account the fact that in most cases the workforce from agriculture is unskilled or low-skilled, the salary level, in this case, can be correlated with professional skills. Education, health and social assistance are the fields of activity where more than 50 % of employees received a lower monthly salary than the average gross salary in the economy calculated for 2018. Additionally, education is the field of activity where in 2018, most employees worked for a salary less than 1500 lei, and this accounted for 6.3 % or 4790 employees. They refer to auxiliary staff, lacking certain professional skills, but necessary to ensure the functionality of the education system.

On top of that, education along with the agricultural sector is the field of activity where the share of employees who received a higher salary than 10 thousand lei was the lowest in 2018. They reached 3.9 % or 2954 people. Taking into account the fact that in the education system, the scientific-didactic and teaching staff may be employed on more than one teaching load, a salary of over 10 thousand lei may be explained by a higher effort on the side of the persons concerned.

Table 1

Employee structure by fields of activity according to the salary size in 2018

2018

Agriculture

Processing industry

Construction

CJ

U

4)

s

s

o

u

Transport and warehousing

Information and communication

Financial sector

Real estate operations

Public administration

Education

Health sector and pub

lic assistance

1

2

3

4

5

6

7

8

9

10

11

12

People who received a salary below 1500,00 lei

0,8

0,0

0,0

0,0

0,0

0,0

0,1

1,5

2,7

6,3

0,5

People who received a salary from 1500,01 to 2000,00 lei

1,2

0,1

0,0

0,0

0,0

0,0

0,0

4,0

5,4

16,3

3,1

People who received a salary from 2000,01 to 2500,00 lei

6,8

2,4

1,3

2,4

5,4

0,9

0,9

5,2

3,1

9,4

9,5

People who received a salary from 2500,01 to 3000,00 lei

21,4

12,1

12,2

18,0

17,1

4,3

2,1

21,4

4,1

6,6

11,0

1

2

3

4

5

6

7

8

9

10

11

12

People who received a salary from 3000,01 to 4000,00 lei

24,1

17,6

17,2

21,3

26,5

3,3

5,5

20,7

8,3

9,8

18,7

People who received a salary from 4000,01 to 5000,00 lei

15,8

15,3

14,3

14,2

15,1

5,5

7,9

15,6

10,1

10,6

16,0

People who received a salary from 5000,01 to 6000,00 lei

10,7

15,1

12,9

12,1

8,4

6,7

10,7

10,1

13,6

10,8

10,8

People who received a salary from 6000,01 to 7000,00 lei

6,6

12,3

11,4

8,5

5,6

7,8

17,7

6,5

16,3

10,4

8,0

People who received a salary from 7000,01 to 8000,00 lei

4,6

8,2

7,9

5,6

4,6

8,7

10,7

4,3

10,8

7,6

7,6

People who received a salary from 8000,01 to 10000,00 lei

4,1

8,7

11,3

6,8

6,1

14,8

12,6

4,8

9,7

8,3

7,1

People who received a salary over 10000,00 lei

3,9

8,2

11,5

11,1

11,3

47,9

31,8

6,0

16,1

3,9

7,6

Total

100

100

100

100

100

100

100

100

100

100

100

Information and communications represent the field of activity with the highest recorded salaries in 2018. Only 11.2 % of the total number of employees working in this field received in 2018, a lower salary than the average gross salary in the economy. At the same time, 47.9 % received a monthly salary of more than 10 thousand lei.

In 2019, the same trends were kept for the salary level by fields of activity in the Republic of Moldova (Table 2).

Table 2

Employee structure by fields of activity according to the salary size in 2019

2019

Agriculture

Processing industry

Construction

CJ

U

4)

s

s

o

u

Transport and warehousing

Information and communication

Financial sector

Real estate operations

Public administration

Education

Health sector and

public assistance

1

2

3

4

5

6

7

8

9

10

11

12

People who received a salary below 1500,00 lei

0,2

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

People who received a salary from 1500,01 to 2000,00 lei

0,8

0,0

0,0

0,0

0,0

0,0

0,0

0,6

1,2

2,5

0,3

People who received a salary from 2000,01 to 2500,00 lei

3,9

1,1

0,7

1,1

0,5

0,4

0,4

6,0

4,2

10,2

4,8

People who received a salary from 2500,01 to 3000,00 lei

16,1

7,7

7,1

13,2

8,8

2,7

2,7

14,0

4,4

11,5

8,3

1

2

3

4

5

6

7

8

9

10

11

12

People who received a salary from 3000,01 to 4000,00 lei

21,9

16,1

12,2

19,6

23,2

2,9

2,9

23,0

4,6

14,0

18,1

People who received a salary from 4000,01 to 5000,00 lei

16,8

14,5

16,7

15,2

17,0

5,6

4,1

19,4

6,9

8,8

16,4

People who received a salary from 5000,01 to 6000,00 lei

13,9

13,1

11,8

11,7

10,9

6,2

6,7

10,7

11,8

9,2

13,5

People who received a salary from 6000,01 to 7000,00 lei

9,0

12,9

11,4

10,7

6,9

6,8

15,4

8,1

15,9

10,1

8,5

People who received a salary from 7000,01 to 8000,00 lei

4,9

10,3

8,5

6,6

4,5

7,4

11,0

5,1

13,2

9,9

8,3

People who received a salary from 8000,01 to 10000,00 lei

6,2

11,7

12,9

8,5

10,8

14,1

15,5

5,4

14,1

13,7

9,8

People who received a salary over 10000,00 lei

6,2

12,5

18,6

13,3

17,3

53,9

41,2

7,7

23,7

10,2

12,2

Total

100

100

100

100

100

100

100

100

100

100

100

Due to the approval of the Law on the unitary salary system in the budgetary sector in 2018, in 2019, it practically led to the disappearance of the employees receiving a monthly salary below 1500 lei. At the same time, the share of employees in the budgetary sector who received a salary of over 10 thousand lei per month increased. Almost a quarter of the staff employed in public administration received a monthly salary of over 10 thousand lei. Likewise, the share of individuals receiving salaries of over 10 thousand lei increased both in the education and in health and social assistance sectors, these making up for 10.2 %, similarly - 12.2 % of the total workforce employed in the discussed fields of activity.

Conclusions

This study aimed to describe the correlation between job polarization and wage inequality in the Republic of Moldova. Additionally, there have been found many criteria that lead, more or less, to the polarization of jobs and, consequently, to wage inequality. In the Republic of Moldova, a relevant criterion to be considered for tackling the problem of labour polarization and wage inequality is the educational level, which exhibits acquired professional skills. However, the findings of the carried out research show that the lowest wages were recorded in the agricultural and trade sectors, activity areas which employ low skilled workforce.

Likewise, state policies in the employment and payment field lead to labour polarization and wage inequality. Any state intervention in the payment field could increase or decrease wage inequality, either within the same activity field or in different areas. Therefore, in the Republic of Moldova, the level of the lowest salary in some fields of activity or for certain job categories, creates quite obvious salary disparities compared to other fields of activity or jobs, which leads to increased wage inequalities.

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А.П. БЫРКЭ

доктор экономических наук, профессор, Экономическая академия Молдовы (Университет), Республика Молдова, г. Кишинев

А.И. МАМАЛИГА

преподаватель, Экономическая академия Молдовы (Университет), Республика Молдова, г. Кишинев

ПОЛЯРИЗАЦИЯ РАБОТЫ И НЕРАВЕНСТВО В ОПЛАТЕ ТРУДА В РЕСПУБЛИКЕ МОЛДОВА

В статье рассматривается проблема поляризации рабочих мест и неравенства в оплате труда. Поляризация вакансий определяется по нескольким критериям, которые наиболее часто упоминаются в специальной литературе. Одним из них является уровень заработной платы. В Республике Молдова имеют место значительные различия в уровне заработной плате по сферам (секторам) деятельности и должностям (профессиональным навыкам рабочей силы), что привело к усилению неравенства в оплате труда. Для описания прикладного аспекта проблемы в качестве метода исследования был применён статистический метод с использованием информации, предоставленной Национальным бюро статистики Республики Молдова. Количество работников проанализировано по уровням заработной платы, а также по наиболее типичным отраслям деятельности в Республике Молдова.

Ключевые слова: труд, работа, профессиональные навыки, уровень квалификации, заработная плата, неравенство в оплате труда.

А.П. БИРКЕ

доктор економічних наук, професор, Економічна академія Молдови (Університет), Республіка Молдова, м. Кишинів

А.I. МЛМЛЛІГА

викладач, Економічна академія Молдови (Університет), Республіка Молдова, м. Кишинів

ПОЛЯРИЗАЦІЯ РОБОТИ ТА НЕРІВНІСТЬ ОПЛАТИ ПРАЦІ В РЕСПУБЛІЦІ МОЛДОВА

Постановка проблеми. Протягом останніх десятиліть поляризація праці у цілому і робочих місць зокрема була предметом дослідження багатьох науковців у різних країнах. Існують кілька критеріїв, які можна врахувати при поляризації праці, а саме: технологічні зміни, орієнтовані на конкретні професійні навички, підвищення рівня освіти, дерегуляція торгівлі, розвиток сфери послуг, уподобання роботодавців, державна політика на місцях, організаційні зміни, рівень зарплати та нерівність заробітної плати тощо. У цій роботі ми обговоримо питання заробітної плати та її нерівності.

По-перше, існує ситуація, керована попитом: зростаючий попит на професії з високою та низькою кваліфікацією та заробітною платою веде до подальшого розриву між найвищою та найнижчою заробітною платою, тоді як попит і, відповідно, заробітна плата для професій із середньою кваліфікацією знижуються. По-друге, модернізація професій може відставати від розвитку вищої освіти, тим самим штовхаючи висококваліфіковану робочу силу на нижчі робочі місця, створюючи надмірний запас навичок, пов'язаних із погіршенням оплати праці. Утворюються надмірні пропозиції для низькооплачуваних професій, а талановита робоча сила залишається на професіях середнього рівня кваліфікації, що веде до збільшення середніх зарплат. У цьому випадку взаємозв'язок між поляризацією професій та нерівністю заробітної плати є негативним. По-третє, технологічні зміни можуть спричиняти зростання вимог до професійних навичок у межах професій, тоді як розширення освіти та зростаючий попит на навички вищої освіти свідчать про період збалансованого зростання. Це веде до підвищення продуктивності праці за всіма професіями і, зрештою, до вищої заробітної плати. Але прямий зв'язок незрозумілий: і зарплата, і зайнятість залежать від розвитку професійних навичок у професіях, а не від їх змін.

Аналіз останніх досліджень і публікацій. Нерівність заробітної плати належить до розподілу заробітної плати, а поляризація робочих місць - до розподілу зайнятості. На думку Д. Ацемоглу (D. Acemoglu) та Д. Аутор (D. Autor), збільшення нерівності у заробітній платі описує значне збільшення заробітної плати у верхній частині розподілу заробітної плати порівняно з нижньою. М. Гус (M. Goos), А. Меннінг (A. Manning) і А. Саломонс (A. Salomons) уважають, що поляризація робочих місць відображає помірне зменшення частки середньої заробітної плати порівняно з роботою вищого чи нижчого рівня. К. Дастман (C. Dustman), Дж. Людстек (J. Lud- steck) і У. Шонберг (U. Schonberg) пишуть про те, що в багатьох розвинених країнах, включаючи Німеччину, спостерігається зростання як нерівності заробітної плати, так і поляризації робочих місць, обидві тісно пов'язані з технологічними змінами.

Для того щоб пояснити явище зростання нерівності в заробітній платі в результаті деяких нерівних практик, дослідники в цій галузі висунули деякі гіпотези. Зокрема, Д. Вейль (D. Weil) дотримується думки, що компанії з високим рівнем продуктивності перевершують інші компанії і мають можливість пропонувати значно вищу заробітну плату всім працівникам порівняно з іншими компаніями. Д. Х. Аутор (D. H. Autor), Л.Ф. Кац (L.F. Katz) і М.С. Керні (M. S. Kearney) доводять, що явище нерівності в компаніях може змінюватися залежно від двох критеріїв: розміру компанії та економічного сектору. П. Бодрі (P. Beaudry) і Д. А. Грін (D.A. Green) аналізують практику окремих країн щодо зменшення рівня нерівності в зарплаті. Дж. Віссер (J. Visser), С. Хайтер (S. Hayter) та Р. Гаммарано (R. Gammarano) досліджують різноманітні інституціональні чинники рівня заробітної плати та її розподілу в різних країнах.

Формулювання цілей. Це дослідження мало на меті описати взаємозв'язок між поляризацією робочих місць та нерівністю заробітної плати в Республіці Молдова шляхом аналізу структури щомісячних зарплат, а також їх динаміки як у національному розрізі, так і по окремих сферах діяльності.

Виклад основного матеріалу. У Республіці Молдова складно спостерігати певні тенденції щодо поляризації робочих місць та нерівності заробітної плати, оскільки Національне бюро статистики не надає інформації про рівень заробітної плати за категоріями зайнятості чи за рівнем освіти та професійними навичками. За цих обставин складно знайти зв'язок між поляризацією робочих місць та нерівністю заробітної плати. Щоб зрозуміти, як поляризуються працівники залежно від рівня заробітної плати, авторами здійснено порівняльний аналіз розподілу (структури) працівників за секторами економіки за рівнем заробітків у 2015-2019 рр. із використанням даних Національного бюро статистики Республіки Молдова.

Висновки. У статті виявлено та аргументовано багато чинників, які ведуть до поляризації робочих місць і, як наслідок, до нерівності у заробітній платі у Республіці Молдова. Одним із них є рівень освіти, що демонструє набуті професійні навички. Результати проведених досліджень показують, що найнижча заробітна плата була зафіксована в сільському господарстві та торгівлі, тобто у сферах діяльності, в яких працює низькокваліфікована робоча сила. Іншим чинником є державна політика у сфері зайнятості та оплати праці: будь-яке втручання держави в платіжну сферу може збільшити або зменшити нерівність у заробітній платі або в межах одного виду діяльності, або в різних сферах. тому в Республіці Молдова рівень найнижчої заробітної плати в деяких сферах діяльності або для певних категорій робочих місць створює цілком очевидні диспропорції в зарплаті порівняно з іншими сферами діяльності чи робочих місць, що призводить до збільшення нерівності у заробітній платі.

Коротка анотація до статті

У статті розглядається проблема поляризації робочих місць і нерівності в оплаті праці. На поляризацію робочих місць впливають кілька чинників (критеріїв), які найчастіше згадуються в спеціальній літературі. Одним із них є рівень заробітної плати. У Республіці Молдова рівень найнижчої заробітної плати в деяких секторах діяльності або для певних категорій робочих місць створює досить великі розбіжності в зарплаті порівняно з іншими секторами діяльності або робочими місцями, що призвело до збільшення нерівності в оплаті праці по країні загалом. Для опису прикладного аспекту проблеми був застосований статистичний метод із використанням інформації, наданої Національним бюро статистики Республіки Молдова. Структура працівників була проаналізована за певними рівнями заробітної плати, а також за найбільш типовими галузями діяльності в Республіці Молдова.

Ключові слова: праця, робота, професійні навички, рівень кваліфікації, зарплата, нерівність заробітної плати.

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