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In the last six months, Vilnius University has been implementing the project “Social policy responses to the consequences of the COVID-19 crisis: analysis of the unemployment and poverty situation, international experience and recommendations for Lithuania” with the support of the Lithuanian Scientific Council (LMT). Based on the work carried out during the project, recommendations were made for the improvement of social policy.
The director of this project, Professor Romas Lazutka, noted that the Lithuanian economy suffered the least from the COVID-19 pandemic in the EU. 2020 In the first quarter, Lithuania’s gross domestic product (GDP) growth was zero, while in the second quarter it fell by only 5.9 percent.
“At that time, the averages of the European Union (EU) have been negative since the first quarter, respectively: 3.3 percent. And – 11.4 percent. Paradoxically, unemployment from February to September. It grew more in Lithuania, until 3.3 percent point and reached 9.8 percent.The EU unemployment rate was only 7.5% and its growth in 20 countries was less than 2%.
Such a rapid rise in unemployment shows that workers in Lithuania are being laid off rapidly in response to changes in business conditions. Number of unemployed according to the employment survey in 2020 In the 3rd quarter, compared to the same quarter of the previous year, it increased by 48.3 thousand. In the first quarter – almost 31 thousand ”- commented the teacher.
According to R. Lazutka, the Ministry of Social Security and Labor announces that from 2020. March 1 to November 12. 421 thousand were newly hired and only 410 thousand were laid off. people (SADM, 2020). Therefore, the number of employees should not have decreased but increased.
“Unfortunately, the number of employees decreased by 44 thousand. And the number of registered unemployed increased by 70 thousand. The discrepancy between the number of registered and the number of unemployed determined by the Employment Survey shows the discrepancy between the registration procedure of unemployed and the real situation in the labor market.
The number of registered unemployed may exceed the number determined by the survey for two main reasons: the inactive are registered with the Employment Service. Informal labor market workers are also registered. The absence of a special waiting period for those who leave work voluntarily also encourages the unemployed to register. There is a total waiting period of 8 days for all but those laid off for 3 months. waiting period ”, explained the professor.
According to him, in response to the challenges caused by the pandemic in the labor market, the Lithuanian government used two measures to support employment, which are also used by most other countries.
“First, since the beginning of the spring quarantine in 2020. March. To the end of November of the same year, subsidies were granted to 24 thousand. Employers.
Second, due to the suspension of the activities of educational institutions, the right to sickness benefit was adjusted and made available to 26,000 people. employees – parents of young children, 88 million were paid. euros. This is probably the only case in Lithuania where a special measure was not developed to mitigate the consequences of the pandemic, but a functional social insurance system for the disease was adapted ”, commented R. Lazutka.
According to him, other measures are aimed at protecting the income of the unemployed.
“With them, Lithuania stands out internationally. First of all, Lithuania has introduced a new temporary allowance for job search. It is paid from the state budget as 42 euros per month. The supplement was for those who were entitled to the Sodra unemployment benefit and for all other unemployed persons of working age, registered with the Employment Service, the benefit was 200 euros each. To do this, from 2020 June 12 to November 19. 95.4 million were spent. euros. Most countries have not introduced temporary benefits, but some EU countries have permanent social assistance benefits for the unemployed.
Unemployment insurance systems are constantly operating in Lithuania and other countries. The parameters of these systems vary slightly from country to country. In Lithuania, the right to 9 months. Unemployment benefit for at least 12 months insurance history for the last 30 months. They are paid a benefit, the amount of which depends on the amount of the previous salary ”, said the professor.
Despite state aid, according to R. Lazutka, more than half of the unemployed are poor.
“Most of the people who lose their job are those who earn little, do not have enough education and do not have skills. They often work for minimum wage and even if their benefit is 70 percent. his salary is not high.
However, it is important to ask yourself not how much profit should be increased, but how much the receiving period should be extended. If we look abroad, the parties usually extend the term of payment of the benefit or reduce the criteria for granting the benefit. For example, people who have recently found a job and are currently losing their jobs could also claim unemployment benefits, ”said R. Lazutka.
According to him, if unemployment lasts more than 9 months, the person in Lithuania can no longer expect unemployment benefits. In Lithuania, during the pandemic, the conditions for receiving unemployment insurance benefits were not improved and the duration of payment was not extended.
“On the contrary, many countries have adjusted the procedures for unemployment insurance benefits – changed their availability (conditions of receipt), duration and amounts of payment. A total of 12 EU countries have adjusted their unemployment insurance schemes.
Therefore, the duration of payment of unemployment insurance benefit in Lithuania could also be extended from the current 9 to 12 months. And the length of service requirement for social security could drop from 12 to 6 months. The recommended measures could be revoked when unemployment begins to fall for three consecutive quarters.
In order not to increase the moral hazard of extending the benefit period and reducing the duration of insurance requirements during crises, that is, to avoid the spread of the practice of deliberate short-term employment and the rush to return to work after leave work, it is recommended to introduce a waiting period of 1 month for retirees. voluntarily, that is, the benefit is paid when you become unemployed only from the beginning of the second month, ”suggested R. Lazutka.
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