Unfavorable forecasts: there will be no one to work, it will become an anchor for a recovering economy

The challenges lie ahead

With unemployment falling in the country, economist Alexander Izgorodin says that Lithuania will soon face serious problems in the labor market.

According to him, with the start of a faster recovery of consumption in Lithuania and Europe, companies will start looking for employees for business development, and then in Lithuania we will see the problem of staff shortages.

As you said, since our labor market before the pandemic was highly dependent on imported labor, the situation will not be alleviated by the problem of immigration of foreign workers, because imported workers need to be isolated and vaccinated, which, both legally and legally. logistically, it is difficult.

“This means that we will see a low supply of workers during a period of sufficiently rapid consumption and economic recovery,” he said, explaining that there could be a struggle between workers who are already working. Employers are said to lure them from one workplace to another, leading to rapid increases in wages.

The economist predicted that the median household income could rise 7 to 10 percent this year.

“And it will affect not only the skilled workforce, but also the unskilled, that is, all segments, because our labor market is structurally totally unprepared for the economic recovery, which should start in the summer due to the shortage. of workers. There are not many options among local workers and it will be very difficult to import them from abroad, ”he said.

Swedbank economist Nerijus Mačiulis also said that employment in Lithuania is currently at an all-time high and there are now more employees than before the pandemic.

“Unemployment fell dramatically in the first quarter of this year, even before part of the sector was open during the quarantine.

In the second half of the year, we will see a very rapid decline in the unemployment rate and a very high level of employment and a rapidly growing labor shortage problem, where they are now ”, he agreed, saying that only in April, employers posted a record 40,000 jobs.

“A large part is not employed, there is a lack of employees, there are no skills, there is no desire to get a job,” added N. Mačiulis.

You may experience economic overheating

Sigismund Mauricas, an economist at Luminor Bank, said that at this time there was high structural unemployment.

“There is a lot of structural unemployment right now. It will grow even more in this time of crisis. We have a mismatch between supply and demand.

Currently there is a severe shortage of young workers seasonally, but some of the workers that others have worked in certain sectors where automation has occurred are out of competition. Now it will be difficult for these people to find employment in another sector, let’s say services, ”he said.

“We will have many challenges, because there are several elements that determine that the Lithuanian labor market is very unbalanced and it will be a great challenge to balance it,” he said.

Ž. Mauricas previously told Eltai that the labor shortage in the country could become one of the main factors hampering the economic recovery, and the labor shortage in Lithuania could cause the country to overheat.

“The biggest risk is that we get into a spiral of rising inflation and rising wage costs. There would be an overheating of the economy of that kind, and it could happen faster than we predict. It could be already this year, especially when they will open more. activities. (…)

Already in July, a good number of people will probably have been vaccinated, then the company will try to compensate, hire staff and see that there are not as many. It will be a great challenge.

Lithuania will have to make sure that young people do not emigrate, that they then do not have to look for workers elsewhere or try to bring them from third countries, ”he told Eltai.

Unemployment is falling, there are no competitions

According to data from the Employment Service (UT), the downward trends of UT clients have been observed in the country for several months this year.

It was indicated that since the beginning of the year, the number of unemployed has decreased from 277 thousand. January 1 to 246.3 thousand. The registered unemployment rate fell from 16.1%, respectively. up to 14.3 percent.

“Registered unemployment, compared to the beginning of the year, is lower by 1.8 percent. – It was indicated in the responses received.

It was also explained that this year the number of skilled worker vacancies registered by UT each month is increasing, and the number of vacancies registered for such workers is decreasing during the same period.

“In January, the number of registered job openings for skilled workers was
1.5 times higher than the number of registered unemployed, 2.5 times higher in March and 3.4 times higher in April. In April, the country’s employers presented 40.5 thousand. job vacancies are the highest number of vacancies registered by the Employment Service during the entire period of the pandemic ”, said the UT specialists, but added that it is noted that some job seekers are not able to find activities that comply with expectations and professions, and there are many clients for whom there are no suitable job openings.

“Although the job market is recovering, people’s behavior is changing. Now, even with a high enough salary, they often ignore new opportunities and find reasons and excuses not to work.

In the service, construction and other sectors, the need for labor is high and it is difficult to find the missing workers, ”said UT, explaining that this paradox is due to several reasons.

“People adapted to living in different conditions during the pandemic. Some used to be self-employed, others seemed to be working for many months of inactivity, but not for subsidized companies. The employment service transfers millions to them every month. For some, that’s enough, others end up working illegally somewhere and receive a reward in an envelope. Illegal work, which had dropped dramatically before the pandemic, is spreading again. This should be intolerable, “UT said in its responses.

According to the authority, before the start of the pandemic in 2020. There were about 37 thousand long-term unemployed in Lithuania. Now there are 100.5 thousand of them. – this is 40.8 percent. all clients. In April, the number of long-term unemployed increased by 3.2 thousand in April. This year there are 66.9 thousand of them. more than in 2020 May 1

When asked what are the most popular professions this year, it was explained that they are: Nursing Assistants, Motor Vehicle Drivers for Initial Professional Qualification, Web Programmers, Accountants, Cooks, Warehouse Operators, Tailors, Social Worker Assistants, welders.