Friday , April 23 2021

The longer the economy grows, the worse it goes to the labor market / Diena

In a situation where the number of unemployed drops, but the number of vacancies increases, the number of applicants decreases per vacancy. Consequently, the cards in the work of the employee are in negotiations on salary and other benefits. This is also one of the main reasons we see a fairly rapid increase in average salary. Of course, the situation in each industry and the characteristics of the work can differ from the average described.

Unemployment dropped to 7% in the third quarter and decreased by 15,300 compared with the situation a year earlier. This is the lowest level no later than 10 years. At the same time, the number of employed has increased by 17.2 thousand and employment is measured with a positive sign for the fifth consecutive quarter, which is very good given the negative demographic trend. Despite the decline in the number of people, the labor-friendly labor market has contributed to an increase in the economically active population (those who work and / or actively seek employment) over the years. In the third quarter, 70.1% of the total population aged 15-74 years were economically active, which in turn is a new record that has recently been flooded. But it must be understood that this indicator can not grow for a long time. In order to increase it even more, the activation of youth and early retirement groups can be very helpful.

All in all, however, the supply of labor is exhausted. Reducing unemployment is becoming increasingly difficult. 43.1% of all unemployed have sought employment for at least one year, indicating that their skills do not match the employer's need or lack of motivation for work. Unemployment continues to decline, but it will be much slower, as the labor market is approaching its borders. This means that labor shortage will continue to be relevant, just as the wage increase. Cooling in the labor market is likely to be a significant economic collapse, which is not expected in the near future.

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