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Rapid decline in unemployment
According to the Department of Statistics, unemployment in Lithuania in the first quarter of this year reached 7.5 percent. Although this figure is still slightly higher than a year ago, easing quarantine restrictions and increasing demand for seasonal workers are contributing to the positive trends.
Meanwhile, state support to the sectors most affected by the pandemic has provided greater opportunities to save more jobs. According to Sodra, the number of insured in March this year already significantly exceeded the level before the quarantine.
This is well illustrated by the number of vacancies that have reached record levels. According to the Employment Service, the country’s employers in April presented more than 40 thousand. job vacancies, and this is the highest number of job vacancies during the entire period of the pandemic.
Next summer the need for workers should increase even more, considering that the majority of the population is likely to go on vacation and this year choose closer to home.
Unemployed women – more
Unfortunately, the statistics also show a rather disturbing trend: the ranks of unemployed men are falling faster than those of women. In addition, the female unemployment rate exceeded that of men in the first half of this year.
This is quite unusual and only reaffirms that the pandemic has also affected different sexes in the same way. Women dominate the accommodation and catering, service, artistic or organizational sectors.
For example, in the accommodation and restaurant sectors, which have been particularly affected by the restrictions caused by the pandemic, up to 75%. all employees are women. Some women who have lost their jobs may not return to the labor market at all, which would only exacerbate existing systemic challenges, such as the gender pay gap.
Wages will continue to rise
As the number of employees grows, so do wages. Swedbank customer data shows that salaries increased more than 10% in the first quarter of this year. Interestingly, wage growth did not stop at all during the pandemic.
This was mainly due to the fact that much of the country’s economic sectors are not experiencing and have not experienced financial challenges. Corporate deposits were growing at a record pace and more and more companies were not complaining of layoffs but, on the contrary, of their shortage.
The pandemic caused sufficiently localized challenges only for certain sectors: tourism, catering or accommodation. The remaining sectors experienced little or no difficulties. This not only prevented job cuts and retained employees, it even increased their wages.
The second factor in wage growth is that wages are sufficiently inert. Remuneration review is often a systematic process and companies plan salary increases in advance.
Finally, the increase in minimum wages and in the public sector has contributed to statistically accelerated growth. According to the bank’s analysts, wage growth should slow only slightly this year and reach around 7 percent.
Immigration alleviates labor shortages
The positive net migration trends that have continued for two years appear to have worn off somewhat. Since the beginning of this year, there has been negative immigration, when more people leave than return to the country. Negative immigration can slow job growth somewhat and help companies struggle to attract missing workers.
However, these negative migration trends are likely only temporary. Unlike many other European and world countries, Lithuania has suffered minimally from the pandemic and the country’s economy has already surpassed its pre-crisis level.
Thus, it seems that there will be no shortage of work in our country, and wages will continue to grow. Thus, the problem of unemployment will soon be replaced by another problem: the problem of personnel shortages, which can become a serious challenge for companies in the country that intend to implement development plans.
The author of the comment is an economist at Swedbank.
