Croatia: High earnings in tourism are destroying the labor market

"The unattractiveness of employment in the public administration is partly a consequence of the very high earnings that are earned by renting private accommodation. And high earnings bring with them more free time and the need for commuting, travel and the like. That simply does not work with permanent employment," says Marko Paliaga, mayor of Rovinj.

"We will become a nation of waiters and maids" - this is a forecast that ominously echoed in Croatia just a few years ago. It is the result of the fact that tourism has definitely become the most propulsive Croatian economic branch. However, very quickly it turned out that this was a rather wrong assessment, and for a simple reason: no one will go to the waiters and maids. More precisely, none of the local population.

These jobs, as well as many others in catering, service activities, and construction, have been massively filled by labor from Nepal, the Philippines, and other distant countries since this year, because the sources of labor are from neighboring regions that are not as touristic, as well as from nearby countries, primarily Bosnia and Herzegovina and Serbia, have already slowly dried up.

Why isn't the local population more interested in jobs in tourism, even though salaries are no longer as low as in previous years? There are three reasons. The first is the result of a multi-decade decline in the birth rate in Croatia, which means that the young labor force is decreasing. The second is to go to countries in the European Union, where Croatia has been a member for ten years and where salaries for the same jobs are significantly higher. The third reason concerns a specific category of the population for whom such jobs simply do not pay. Namely, they already live from tourism. And quite decently at that.

From shipyard workers to apartment renters

Zoran Đorđević from Pula was a worker in the now defunct shipbuilding giant "Uljanik". Tampo worked from 1983 to 1995, when he quit the shipyard. His parents were engaged in tourism even before that, and since that year he has lived exclusively by renting apartments in his family house, which he inherited. And he and his family of four.

The calculation was more than simple. On the one hand, eight-hour physical work in a dirty work department for little pay and with the boss's grumbling, and on the other, renting 120 square meters of the upper part of the family house with a swimming pool for solid money and more free time for yourself and your family.

"While I was working in Uljanik in the XNUMXs, I had a salary of around one hundred German marks per month. "My parents would earn a thousand and a half marks in a month," says Đorđević.

Unlike the nineties of the last century, the tourist season has been extended, so the Đorđevićs now have guests from the first of April until the middle of October. "We could rent for longer, but this is enough for us," says Zoran Đorđević, alias Đola Macola, as his stage name reads, who is known locally as a drummer in several rock bands. Together with his wife, he organized several humanitarian actions in his hometown.

"We've got the Dutch disease"

However, the trend of disinterest in employment due to tourism is not only present among ordinary workers, but also among the highly educated. They have been feeling this for a long time in public administrations, for example in Rovinj.

"The other day, two people quit their jobs in the public administration. I think we advertised for legal positions six times. No one came forward," says Mayor Marko Paliaga. is realized by renting private accommodation. And a high salary brings with it more free time and the need for commuting, travel, etc. This simply does not work with permanent employment," adds Paliaga.

In Rovinj, a town with about 13.000 inhabitants, more than 12.000 residential units are rented out to tourists. At the same time, the mayor warns of a specific phenomenon in Croatia: low or no taxation of vacation homes.

"Certain lump sums are paid. I have nothing against it, because it helps the household budget with a few thousand euros a year, but we, on the other hand, in Rovinj have people who rent five, six, even ten apartments, and pay a very small tax for that," points out the mayor of Rovinj, Paliaga. .

He compares this trend to the Dutch disease. It is an economic phenomenon that once appeared in that country, according to which the rapid development of one economic branch causes a decline in other sectors. Thus, due to the rapid development of entrepreneurship and trade in Amsterdam, where a large number of people owned business premises, there was a sudden increase in the rental prices of these premises. The result was a drop in interest in employment on the labor market.

According to Paliaga, the city of Rovinj will take measures to limit further construction. One of the possible measures in the future is the reduction of tourist capacities.

"We'll see what the new Law on Tourism has to say about it, which should make it possible to limit capacities in certain zones. I'm sure that we in Rovinj will know how to take advantage of that," says the mayor.

"It is not only tourism that is to blame"

Sociologist Krešimir Krolo, associate professor at the Department of Sociology at the University of Zadar, believes that the problem of lack of personnel in public administration in tourist regions is much broader, that is, that the cause is not only the rentier economy that destroys the work ethic.

"The problem is negative selection during employment, which has been carried out for decades, because many people got jobs through political and family ties. Also, drawing spatial plans or dealing with communal problems - this is a responsible job, and it is subject to numerous pressures from politicians, investors, local sheriffs , and also to the public," explains Krolo, adding that for someone who wants to work in his profession and for the public good, such an atmosphere is not encouraging.

"Now, fortunately, the public administration is no longer a place of corruption, but a new problem has arisen. Those jobs are no longer lucrative, because now even the worst job in Ireland pays more. The problem has culminated and, if something is not changed in the foreseeable future, the situation will get worse. "City administrations will function less and less, and the same will be true in other sectors, such as culture and education," Krolo points out.

He warns of another negative consequence of tourism, which strongly affects the labor market and the departure of skilled labor outside the country. It is the rise in real estate prices. "Buying an apartment in those regions has become an impossible mission," concludes sociologist Krešimir Krolo.