This recourse was now restricted but it should be totally replaced with conciliation, mediation or arbitration. The minimum wage is an obstacle to the formation of new workplaces. It needs to be reformed in all economies in transition. One solution is a scaled minimum wage that is age-related and means tested and connected to skills. Macedonia has allowed employers to encourage the early retirement of workers which otherwise might be rendered technologically redundant.
Early retirement is an efficient mechanism to deal with under-employment and hidden unemployment.
It is now massively implemented in the bloated state administration. There are encouraging precedents from other countries in transition. Romania, for instance, ameliorated its unemployment problem largely through early retirement. Offering a severance package, which includes a handsome up-front payment combined with benefits from the Employment Fund, can encourage early retirement. A special Early Retirement Fund has been created by setting aside receipts from the privatization of state assets and from dividends received by the state from its various shareholdings to provide excess severance fees in case of early retirement.