About the ILO in North Macedonia

Rising income levels and more jobs with persisting low employment rates

Although living standards are under pressure from the economic crisis, looming inflation and the war in Ukraine, North Macedonia has continued to make progress in advancing the decent work agenda.

Despite some recent improvements, the Macedonian labour market is still characterized by high unemployment, low employment and low participation rates. In the period 2020-2022, the labour force participation rate for the age group 15-64 slightly rose from 65.3 per cent to 66.1 per cent (ILOSTAT, 2024). Despite an increasing female employment rate, the gender gap remains substantial and stands at almost 17 percentage points in 2022 (ILOSTAT, 2024). In addition, the unemployment rate declined from 16.6 per cent to 14.5 per cent between 2020 and 2022 (ILOSTAT, 2024), because of a strong decline of women’s unemployment rate (4 percentage points).

Labour force participation of youth aged 15 to 24 continued to decline in the period 2020-2022 (from 30.9 per cent to 28.4 per cent), due to falling activity rates among young men and women. The employment rate among young men slightly increased, but it dropped by 1.6 percentage points in just two years among young women (from 14.3 per cent to 12.7 per cent). The youth unemployment rate declined from 35.8 per cent in 2020 to 32.6 per cent in 2022 (ILOSTAT, 2024), driven by decreasing unemployment rate among young men, while young women unemployment rate remained stable. In 2022, the rate of young people not in employment, education or training (NEET) remained high, at 18 per cent (ILOSTAT, 2024).

Over the past two decades, the country has seen its working-age population slowly decline. Labour shortages are beginning to be reported by firms in the construction, textile, manufacturing and tourism sectors.

The Economic and Social Council, as the main platform for tripartite social dialogue, started to play a more prominent role in shaping national economic and social policies recently. It held 11 meetings in 2023, focusing on wage policies and minimum wage setting, the impact of the energy crisis on Macedonian companies, and collective bargaining and labour legislation. The trade union density rate is stable at around 20 per cent. The first General Collective Agreement for the Public Sector in 15 years was signed on 18 July 2023. All employees are covered by the either the General Collective Agreement for the private sector or the General Collective Agreement for the public sector.

ILO interventions in North Macedonia

The ILO has been supporting the state institutions and the social partners in the areas of employment, social dialogue, labour legislation, and application of international labour standards since 2009.

The Macedonian Government, trade unions, employers' organizations and the ILO have signed a new Decent Work Country Programme (DWCP) for the period 2023- 2025. Creating more and better jobs, improving employment prospects for young women and men, and fostering an inclusive labour market through strengthened social dialogue are the key priorities of the DWCP.

Recent ILO support focused on:

• Introduction and implementation of the Youth Guarantee. The new Youth Guarantee Implementation Plan 2023-2026, adopted on 5 April 2023, builds on the results of the previous Plan, which led to decrease of the NEET rate, increase of the employment rate and decrease of the unemployment rate in the country, despite the adverse effects of the COVID 19 crisis, the war in Ukraine and the economic and energy crisis.
• Establishment of a mechanism for amicable settlement of labour disputes. Amicable settlement of several high-profile cases of collective labour disputes have demonstrated the importance of the established and has increased the trust in the effectiveness of the system. Macedonian constituents used the new ILO tool for self-assessment of the labour disputes resolution mechanisms to identify the strengths and weaknesses of the ASLD mechanism. Based on the findings of the assessment they subsequently developed an Action Plan for reform and advancement of amicable settlement of labour disputes for the period 2023-2025.
• Supporting the tripartite process of drafting the new labour legislation and consultations with all the relevant stakeholders.

Text last updated in April 2024