Navickienė: extending payment of unemployment benefits would require rate decisions

In the “Monetary Affairs” program, the Minister of Social Security and Labor, Monika Navickiene, and the Executive Director of the Investor Forum, Rūta Skyriene, spoke about unemployment in Lithuania. During the conversation it was stressed that attention will be paid not only to the revision of the unemployment system, but also to the functions of the Employment Service in general. It is the Employment Service that will play a key role in integrating the unemployed or unemployed into the labor market after a pandemic.

Unemployment also increased with benefits paid

According to data from the Department of Statistics, in 2020. in the last quarter, the unemployment rate in the country reached 9 percent. As already announced, the unemployment data has also caused concern for the presidency. Simonas Krėpšta, the president’s senior adviser on economic and social policy, said that the unemployment rate in Lithuania is about one and a half times higher than the European Union average. According to him, before the pandemic, we looked better in terms of unemployment and we were better than the EU average.

On the show, M. Navickienė stated that during the first quarantine, several students, people who worked in the shadows and mothers took care of their children registered with the Employment Service to obtain job search benefits. There were no incentives to look for work, but they wanted to receive a benefit.

“The measures for the second quarantine have been adjusted. In my opinion, it is precisely those mechanisms that were proposed during the second wave of quarantine, when we offered to compensate for 100% downtime for employers to retain workers on the job. workplace, this measure was a strong incentive not to lay off workers. I hope that these measures and those currently proposed by the Ministry of Economy and Innovation help to improve the situation in a more positive way than the statistical indicators may seem ” said the Minister, adding that the job search benefits have been extended for or three months before quarantine.

R. Skyrienė added that the increase in the unemployment rate was undoubtedly influenced by the fact that some companies closed.

“Entrepreneurs count if they don’t even have enough to make up for that downtime, they shut down or downsize, and there certainly have been cases where pandemics and quarantine have forced them to do so,” he said.

Ms. Navickienė noted that since January, when the new measures were implemented, unemployment rates have not increased.

“We do not register people who register in addition to the Employment Service. February was positive in the sense that more people were hired than laid off. Unlike what we saw in December 2020, ”said the minister.

Extending the payment of unemployment benefits may require an increase in the rate

He called on the presidency to review the unemployment insurance system, as only about 30% currently receive unemployment benefits. people. This was also supported by the unions. Inga Ruginienė, president of the Lithuanian Trade Union Confederation (LPSK), stated that the payment of unemployment benefits should be extended as well as the length of service requirement should be changed.

Minister M. Navickienė states that when talking about the unemployment system, the question also arises as to what is the mission of the Employment Service.

“Is it also a participant in social support, or is it an institution that should focus its objectives as much as possible on the employment of people? It is a reconciliation of supply and demand for employment. The idea is that we should try to review all the tools that the Employment Service has in its spectrum in order to answer the question why there are still quite a lot of vacancies in Lithuania and unemployed people who are looking for work and cannot. Find them.

Perhaps these are mobility problems, mobility between municipalities? They may not be very effective retraining measures, when we cannot find the opportunity to adapt a person to the position that is currently vacant. We pose a series of challenges due to the activities of the Employment Service, ”he said.

At the same time, it was noted that in order to extend the payment of unemployment benefits it would be necessary to increase the fees paid.

“As for the type of unemployment insurance, it seems to me that it must be made very clear that everything has to do with the rates. Today, unemployment insurance rates, if we look at how much is collected in contributions and how much is paid in benefits, is -63 million. euros. If we think that that type of insurance could be expanded, extend the period of unemployment benefit insurance to 9 months or maybe more, or reduce the length of service requirements, then we should address all of those things in some way, also in terms of collections. rates. .

I think it is necessary to discuss how we see the participation of unemployment insurance in the whole system “Sodra” in general, to ask those questions also to the experts. (…) Suppose that, as a “combat” measure, we could offer that reduction of the length of service now, but in terms of the long-term perspective, we would really need more discussion to answer the questions and what are the expectations of the citizens . and what are our opportunities, ”said Ms. Navickienė.

According to R. Skyrienė, the increase in the rate would respond to labor costs.

“We have always said that unemployment benefits should encourage the person to look for work, but at the same time they must respond to the salary that the person has before they get into a degrading situation. It is necessary to look for solutions here ”, said R. Skyrienė.

According to M. Navickienė, how to adapt the Employment Service to changing needs will be discussed.

As for the PSD, we take a look at the statistics itself, that even now, when part of the PSD is administered by the Employment Service, there are around 150 thousand. In Lithuania, the population is not covered by this type of insurance. This means that many people, according to Sodra, have PSD without insurance overall. In that context, we must raise the question of the value of whether they should have such insurance. Why don’t they have it yet? I think we have to face it in a very complex way. I think that people have to be insured by the PSD state, but if that insurance fact has to do with the registration in the Employment Service and if it does not distort the unemployment statistics, I have many questions. I think we will have this discussion with SAM, which has direct responsibility for PSD, and with other social partners, what is the best way to solve this problem, “said the Minister.

The mandatory health insurance (PSD) rate is currently 6.98 percent. Taxes paid by the employer at the workplace: social unemployment insurance – 1.31 percent, contributions to the guarantee fund – 0.16 percent, contributions to the long-term employment benefit fund – 0.16 percent . Social insurance for accidents at work and occupational diseases 0.14 percent The cost of work can be calculated here.

Not all employers report job openings to UT

R. Skyrienė noted that there may be more than 20 thousand today. vacancies published by the Employment Service.

“It means that not everyone declared. Why? Because employers do not believe that they will get employees from this system who will satisfy their work. And how to solve the problem? It really is a question of mobility, perhaps to help companies that bring workers to compensate for transport services, because in fact workers in the region, especially where higher unemployment is really welcome elsewhere with their qualifications or work experience ” added. it should not be transferred to the municipalities.

“Given the past crisis, the Scandinavian unemployment figures surprised everyone because they have very active employment and recycling policies. In this direction, I believe that the Employment Service should work more. Maybe that retraining takes time. Looking at what specialties, but you really have to make sure that we don’t happen to be setting up a hairdresser where those hairdressers are not even needed. There are municipalities that think they are suitable for tourism, they train tourism specialists and it turns out that they don’t need them there ”, said R. Skyrienė.

According to M. Navickienė, the main objective will be to increase trust in the Employment Service.

“And that employers have confidence that they can find the right workforce by contacting the Employment Service, declaring these vacancies, and that employees who sign up should also aspire to find work. It would then be much easier to assess the existing measures taken by the Employment Service. Are they effective or do you need to make some adjustments?

The employment service does not and cannot create jobs. Jobs are created by the market, created by employers and what that market is like, how it will recover, what those jobs will be like, we will only see it from the economic capacity of the state after a pandemic. The best thing the employment service can do is match supply and demand. It seems to me that it is very important to differentiate, no matter how effective the Employment Instrument is, it cannot directly create new jobs.

Youth unemployment can be tackled a little more easily than older people. Because young people can actually use existing tools more quickly, retrain, have some training, those people are more welcome in the job market than older people. The problem can be greater with unemployment of the elderly, especially when there is little incentive to keep that person in the labor market, ”said M. Navickienė in the program.