The challenge of emigration after the unemployment peak: opening the borders will require quick solutions

The Employment Service announced that registered unemployment exceeded 16.1 percent in January. and it’s not peak yet. Meanwhile, the Lithuanian Department of Statistics reported that the unemployment rate in Lithuania last year was 8.4 percent. – 2.1 percent. Higher point than 2019. The long-term unemployment rate increased 0.6 percent last year. point and was equal to 2.5 percent, reported the Department of Statistics.

In the “Monetary Affairs” program, Boguslav Gruževskis from the Lithuanian Center for Social Research assured that more attention should be paid to the statistics from the Department of Statistics and that these indicators are not really tragic yet.

The Employment Service displays information based on the people who register with the Employment Service. Consequently, we see that people often sign up for reasons other than to find a job. And the Department of Statistics uses the principle of the sociological method, the principle of the survey, called household surveys, and many times it turns out that if a person works, they do not prove that they are not working, although formally it may be that they register with the Service of Employment. The statistics from the Department of Statistics are closer to the truth, “said B. Gruževskis.

He added that the unemployment rate cannot be called tragic, as Sodra had already reported that about a third of the unemployed who now register with the Employment Service did not even have work experience before registering.

“The government’s behavior is friendly to citizens and a large part of the people who returned from emigration, who had absolutely no experience in insurance in Lithuania, but received certain guarantees and assistance. Those guarantees that people give when registering with the Employment Service. There are different factors here, so really those people often don’t look for a lot of work, it’s not good here. We should rethink this year, ”said the professor.

Peak unemployment can be reached in February

Professor B. Gruževskis pointed out that unemployment is affected by seasonal fluctuations and generally due to this factor unemployment is highest in February. The second contributing factor currently – the pandemic and the epidemiological situation. The third factor is the economic recovery and the relaxation of the quarantine.

“In my opinion, a more optimistic variant would be so characteristic of Lithuania that the number of diseases is really decreasing, the medical system and the vaccine will help, so from mid-February the economic activity will start to develop a little more actively , so February would be the most difficult month for the job market to improve, “commented B. Gruževskis.

Luminor’s chief economist, Sigismund Mauricas, added that he agreed that we should peak in February or March.

The challenge is to avoid a wave of emigration

However, while unemployment rates are not that intimidating, Lithuania may face risks in dealing with the consequences of a pandemic and the opening of borders.

“What will happen when the peak is reached? Will we be able to reduce the unemployment rate to what it was before the crisis? By the way, it was not small and before the crisis, Lithuania stood out from all the Central and Central European and Baltic countries, because the unemployment rate in Lithuania was either the highest or the second highest. We compete with the Latvians.

The crucial question is how quickly can we reduce it. It will be the recurrence of the scenario of the late spring of 2020, when the economy recovered very quickly, it was a V-shaped recovery (a sudden recovery after a strong recession). The majority, or at least the majority, of the workers have returned to the jobs they worked at before the pandemic or found new jobs. It will also depend on whether we have the problem of long-term unemployment after the pandemic and also whether we avoid a wave of emigration. Because young people probably won’t sit on the couch for half a year, only when travel opportunities become available, when other countries’ economies start to recover from the pandemic, they will also see opportunities in foreign countries. The challenge will be considerable and there will be little time. I would say that in the middle of summer we have to employ most of the young people, if not, we run the risk of having a wave of emigration ”, says the economist Ž. Mauricas.

When asked whether it would not be the case that not only the young but also the elderly would emigrate, who are currently simply not leaving due to quarantine restrictions or uncertainties, Ž. Maurice pointed out that we can see the incomplete picture.

“There are significantly more people working in Lithuania from home; They work formally in Western European countries, there is an agreement that allows them to work from home, and they often live in Lithuania. I think the flow of immigration, the return migration to Lithuania was much higher than what we see statistically.

This is a great opportunity for Lithuania, if we are able to generate a rapid economic recovery, we will have excellent results and official migration, because people will be officially registered here in Lithuania as permanent residents. This is a great opportunity, but there are also risks, which again depend on our economic recovery. We really have little time, the beginning is very good, because we are the least affected economically by the pandemic, and we are seeing that the situation is improving somewhat. So we stand out from Scandinavia, the Baltic countries, a little on the negative side now, but we have that time, because emigration now is not very possible, because other countries are closed. This is a limited movement for a couple of months, but later, when the opening starts, especially in April-June, everything will have to be done to keep those people in Lithuania, ”said the economist.

However, it is not yet clear whether we will have a positive migration balance in 2021.

“I would wait another month to see what the trends are, but actually I am at 90%. He is convinced that also this year we will have a positive migratory balance,” he added.

Professor B. Gruževskis stated in the program that there is no doubt that emigration will increase when the borders are opened. In his view, it will take a lot of government work to deter emigrants, and the best effect would be better jobs that create higher value added and pay higher wages.

“You know in 2020. In the year of the pandemic, we actually had almost 10 percent. Average wage growth. This is the majority of the people who left Lithuania not because they couldn’t get a job here, but because they couldn’t get it. a good job and a good earning Therefore, the growth of wages and the growth of the average income is a strong argument that people should not leave Lithuania.

On the other hand, we are seeing a big increase in good and strong investment. More investors are coming to create high value-added jobs, so it is also possible to earn well in Lithuania. New perspectives are emerging for new people who were actually outside of Lithuania before the pandemic.

The third factor is that, in principle, the attractiveness of the Lithuanian labor market is increasing. Clearly, a lot here depends on the decisions of the Government and our internal policies. From social dialogue. We are seeing an increase in the number of immigrants from third countries, which means that there are jobs available. It is now important to ensure prudent government policy to discourage the importation of low-skilled workers, make the most of Lithuania’s labor resources and, as Mr. Mauricas mentioned, avoid long-term unemployment, which could be a major loss for Lithuania. it couldn’t really cope with long-term unemployment.

There are definitely those tensions, there are problems, although I repeat that a certain increase in emigration will not be avoided, because in reality about 40 thousand. Of the people who arrived during the pandemic, not all will be satisfied with the conditions they can provide here. Although I think we have to fight for them, we have to work actively, ”said the professor.