Economic

Agriculture hit hardest: Rise in undocumented work raises concerns

Undocumented employment in Moldova is increasing at an alarming rate, with agriculture bearing the brunt of the issue. Experts urge action, highlighting the need for attractive jobs and sustainable development. Meanwhile, the government takes steps to combat the phenomenon through increased inspections.

Data from the National Bureau of Statistics reveals a significant rise in undeclared work during the third quarter of 2023. Compared to the same period in 2022, the rate jumped from 6.8% to 8.2%, reflecting a 1.4% increase. The practice is more prevalent among men than women, with agriculture accounting for a staggering 74.1% of informal employment. Construction (10.4%), industry (4%), and trade (2%) follow suit.

Social policy expert Dorin Vaculovschi attributes the surge to the uncertain economic climate stemming from the war in Ukraine. This has negatively impacted entrepreneurship and employment trends, driving people towards informal work.

"Investment behaviour or entrepreneurship has decreased, leading to more people working informally," Vaculovschi explained in a Radio Moldova interview. "To reduce this phenomenon, we need to encourage investment and create new, sustainable jobs. This will increase employment levels and decrease undeclared work."

Responding to the growing concern, the Ministry of Labour and Social Protection has implemented various initiatives. A key focus lies on strengthening the capacity of the Labour Inspectorate to identify undeclared work more efficiently.

"We are strengthening the Labour Inspectorate and limiting envelope wages," declared Labour and Social Protection Minister Alexei Buzu during a recent parliamentary session. "We have increased the minimum wage to incentivize people to formalise their employment and increase tax revenue."

A targeted campaign launched by the State Labour Inspectorate on October 30, 2023, has yielded promising results. Utilising risk analysis and data shared with the State Tax Service, inspections focused on businesses suspected of violating labour laws.

From October 30 to November 24, 2023, inspectors visited 179 companies, uncovering 74 individuals working without legal contracts. This represents a tenfold increase in detection rate compared to the previous year, showcasing the campaign's effectiveness.

Translation by Iurie Tataru

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