Government-submitted bill reducing working hours smacks of populism -  economist

ArmInfo. The draft law on reducing daily working hours by one hour presented by the Armenian government smacks of populism. This was stated by the well-known  Armenian economist Suren Parsyan in an interview with ArmInfo. 

According to him, the document not only fails to take into account  international messages, but also national peculiarities.  International experience shows that reducing working hours leads to  additional expenses for the employer. For example, if an employer  works 24 hours a day, he must attract additional labor to make up for  the lost three hours, and this leads not only to financial but also  to administrative expenses. The governments of a number of countries  take on these expenses as part of their assistance programs so that  businesses can go through this stage without incident. In the  Armenian reality, changes are made hastily, without taking into  account the interests of businesses, and are very often declarative  in nature. "In particular, it is proposed to establish a 7-hour  working day, but in reality this initiative may be extended to the  public sector, while in the private sector everything will remain as  it was, since the employer will strive to keep its employees at work  for another 1 hour, especially considering that the application of  the legislative initiative will lead to additional costs for it,"  Parsyan said.

He added that the proposed amendments are rather populist in nature  during the pre-election period, which is supposedly intended to  demonstrate the social focus of the initiative. But this, as the  economist noted, can hardly be called a reform; it will rather become  another test for business, which will lead to new problems. "Reforms  should not lead to new problems, on the contrary, they should solve  these problems, and not lead to new headaches for entrepreneurs," the  economist said.

Answering the question about how the reduction of the working day  will lead to GDP growth, which is officially stated, especially  against the background of the previous position of the government,  which refused to recognize the day of remembrance of the dead as a  day off and went for the reduction of New Year holidays, citing that  their application could negatively affect GDP growth, Parsyan once  again pointed to the populist nature of the bill. He noted that the  innovation will not lead to any significant impact on economic  growth, especially against the background of large and significant  doubts about the sharp increase in labor productivity. Against the  backdrop of a labor shortage, it will be very difficult to fill the  existing gap. "This is another populist step, which is supposedly  intended to show people the authorities' concern for the well-being  of citizens, but in practice it will not have a significant impact on  the country's economy," the economist emphasized.

On March 3, at the initiative of the Chairperson of the RA National  Assembly Committee on Labor and Social Affairs Eriknaz Tigranyan, a  discussion of the draft law on reducing daily working hours by 1 hour  took place. Eriknaz Tigranyan emphasized the importance of  discussions with partners, which provide an opportunity to hear  opposing opinions, as a result of which the draft law submitted for  public discussion, but not yet submitted to the National Assembly for  discussion, will be improved.

The Minister of Labor and Social Affairs of the Republic of Armenia  Narek Mkrtchyan noted that the goal of the draft law is to increase  the productivity and efficiency of employees, as well as to establish  a balance in the ratio of family and work during the working day. The  main issues discussed were assessing the impact on GDP per capita,  providing employers with a choice, extending the regulation only to  public sector employees, the impact on the economy, etc.  Representatives of the executive body, using examples of  international experience, cited statistical and research data based  on the successful experience of specific countries, which prove that  reducing working hours has a positive effect on physical and mental  health, as well as on the productivity of workers and on GDP growth.

Meanwhile, the position of the Republican Union of Employers of  Armenia is negative, based on the possible negative impact of the  innovation on the economy and employers.

In this regard, Eriknaz Tigranyan noted that this discussion was the  first in a series of meetings on the project, and in the near future,  discussions will be held with a wider composition, which will be  aimed at making the project as acceptable as possible for all  interested parties based on factual information.