Economist predicts a new rise in unemployment: threats are spreading to the labor market

Unemployment will continue to rise

Summarizing the economic situation in Lithuania, when autumn arrives, the economist of the SEB bank Tadas Povilauskas evaluates the summer quite well in the program “Delfi Tema”, he said that it exceeded the expectations of the beginning of spring.

“According to the latest data from the bank’s clients in August, we see that the population continued to spend. Even in the sectors affected by COVID-19 – catering, accommodation – July and August were bad, but not as bad as April, May and the first half of June.

But now we have entered autumn. We are very afraid that the same affected sectors will again have a huge deficit, because the seasonal work, especially in the spas, has ended, ”said T. Povilauskas.

The economist points out that for most students it is important to find work at this time, as many of them tend to work in the retail sector. However, you doubt that many merchants are in a rush to hire new employees.

“Employees from other chains, such as suppliers, will be more accepted. The demand for employees in the catering sector will be lower again, ”he says, adding that the general economic situation in Lithuania is relatively good, but there are many threats, which are said to be spreading to the labor market.

“We see that unemployment will increase in the third quarter of this year. As economists, we don’t look much at registered unemployment, because there are other factors that determine it (increased unemployment – Delphi).

We looked at Sodra’s data on new admissions and exits. More workers were hired than laid off in June and July, and the balance sheet was close to zero in August. However, layoffs increased in the last week of August. This is probably related to seasonal workers, as the resorts have finished working, but the month was still “zero”, meaning there are no more layoffs than receptions. So we have a pretty good situation.

Going forward, the seasonality factor will likely start to work, which is unavoidable even in good times. In the last quarter, construction works also decrease, especially if the colder period, there is also a slight decrease in works in agriculture ”, shared T. Povilauskas.

The economist predicts that unemployment, published by Statistics Lithuania using the survey method, will increase in the next six months. In the second quarter of this year, it accounted for 8.5 percent.

“We expect unemployment to reach 9% in the third quarter. The peak will be reached in the fourth quarter: 9.3 percent. These are certainly not the records that were achieved in 2009. – about 18 percent. The situation It is quite different from 11 years ago ”, says T. Povilauskas.

Unemployment is expected to decline in the second half of next year

The interviewee observes that the registered unemployment statistics show a different situation, which is said to be a bit misleading. The Employment Service announces that on September 1. Unemployment in Lithuania reached 13.7 percent.

The economist points out that the real number of unemployed, compared to last year, has risen to 30 thousand, that is, so many people were laid off and did not return to work. At that time, registered unemployment, according to the report, increased by 80,000 during the year. persons.

“Real unemployment is for those who really want to work, but cannot find work due to skill mismatches, etc. – will increase. I think the number of layoffs is likely to increase, especially in the sectors that suffer the most ”, predicts the economist.

When asked when unemployment in Lithuania will start to decline, T. Povilauskas expects it to catch up in the second half of next year: We think the beginning of next year will be challenging enough. When we go out next spring and summer next year, people will feel better, then unemployment will go down. “

It is necessary to “disconnect” the distribution of benefits to motivate people to return to the labor market

Andrius Francas, partner of the recruitment company Alliance for Recruitment, emphasized in the program that the situation in the labor market is improving, noting that everything is related to the expectations of residents and employers – what they plan for the future and what who think economically.

“By evaluating the number of job advertisements on various advertising portals, we are gradually returning to the pre-pandemic level. It is very important that the unemployed, of whom we have many, are retrained from one field to another,” says A. Francas.

The interviewee highlights that some of the people registered with the Employment Service are false unemployed who claim that they will never look for work, they only care about benefits.

“The employment service measure was introduced in April, when we did not know much about the situation, and there were no safeguards when benefits should be ‘disconnected’, when the market situation should improve. The situation improved in the second half of June, July and August Apparently, to motivate people to return to the job market, this measure must be “turned off” at some point.

Now promise that for December 31st. people will get 200 euros in job search compensation, just like that. That’s not entirely fair in that regard. In the short term, a person can receive that money, but in the long term they do not return quickly to the labor market, which is not an advantage ”, emphasizes the personnel selection expert.

When asked what could be done to change this measure, Francas points out that an incentive model should be considered to motivate people to return to the labor market: since its publication. I am in favor of a person being able to both earn money and receive an allowance to be able to return faster ”.

The state provides additional “scholarships” to unemployed youth

Rita Karavaitienė, marketing director of recruitment company CV-Online, when asked whether unemployment will rise further at the end of seasonal jobs, points out that young people trying to earn more in a short period of time tend to choose seasonal jobs. could both rest and win.

“In the fall, they are supposed to go back to the big cities and look for short-term jobs in the field of commerce and customer service; they are moving to another field.” Some seek work by specialty, trying to get in. Here are those smart people who are trying to build their careers with a purpose, and some are graduating and choosing simpler, highly skilled jobs where they are studying, ”says R. Karavaitienė.

Unemployment among youth under 25 is reported to have risen to 23 percent annually. Furthermore, as Eglė Radišauskienė, the Deputy Minister of Social Security and Labor, has previously said, there is a significant increase in the interest of students for the allocation of 200 EUR for job search.

“Young people have the same incentive: students are unemployed. This means that as a student you can register that you do not have a job, you are looking for it and you will receive a benefit of 200 Eur. The state provides an additional scholarship. Why not use it? Some universities advertise the possibility: “Have you registered with the Employment Service as unemployed?” – Frank shares her comments.

“I don’t know how real it is, how fictitious it is. The fact is that there are some people, the same students, who did not return to study in the UK and study at a distance. The fact that there are Lithuanians returning from abroad who have worked in some jobs there, but due to the same situation they cannot return ”, explains the partner of the Alliance for Recruitment, which has increased youth unemployment.

R. Karavaitienė also agrees that today it is more difficult for young people to find a job than for other people.

“If a young person has basic skills: working on a computer, in a foreign language, it should also help him find a job. I don’t see any challenge for a young man who has his head on his shoulders, skills, desire to work, to find work ”, Says A. Francas.

According to him, whether it will be difficult for a person who has just graduated to enter the labor market depends on the specialty he chooses.

“Young people often don’t understand the rewards of entering the profession or completing their studies. Young people are frustrated that a person in archives or social work can get almost the minimum wage. But that’s the reality: Market Rewards At that time, a philologist who has graduated in French or Swedish can immediately receive 800 euros “in his hands.” Consequently, a salary three times higher just for entering a specialty that is in demand in the market.

We see this in terms of today’s students’ decisions about where to stand. They tend to go where it is easier to study, but the specialty does not necessarily guarantee a job, ”emphasizes the personnel selection expert.

How will trapped emigrants adjust the labor market?

In the summer, the Lithuanian labor market was also affected by migrants trapped here, who were unable to leave the country due to restrictions. Most of them were looking for work in Lithuania this summer, and when fall came, they planned to pile up their suitcases and go abroad.

The economist T. Povilauskas points out that to evaluate the flows of emigrants, it is possible to look at the use of flights to Great Britain and Norway.

“The employment is not bad, I suspect they are trying to come back before the season is over, especially the construction workers, to make sure they don’t lose their quarantine later. This was a factor that reduced the number of Lithuanians in Lithuania in August and September ”, he considers.

Commenting on the aspirations of migrants to find work in Lithuania, R. Karavaitienė first points out that the greatest demand in the labor market is for skilled workers.

“If they have worked abroad and have useful experience that would be useful in Lithuania, they can really find a job. Just looking at how they rate it. If they say they earn twice as much abroad and they don’t offer it here, there is still anger and dissatisfaction. They are not looking for work in principle, they place themselves in such frames and prevent them from finding work.

Again, whether it is worth going back will depend on how deep they have taken root, what work they have done. There are people who work not only in production, but also in management, finance. It depends a lot on the field and their attitude, ”says the CV-Online marketing manager.