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16.02.2009

Lack of jobs becoming ever more noticeable

   

At the beginning of February there were 930 thousand registered unemployed, with only 86.5 thousand jobs available. This means that for February this year there were 11 people for each job as opposed to 4 at the same time last year. These figures were cited by the Director of the Employment Service Volodomyr Halytsky in an interview to the newspaper “Den” [“The Day”].

In some regions, he says, the figures are much higher, with the ratio in the Vinnytsa region – 39 unemployed per available job; the Ivano-Frankivsk and Khmelnytsky regions – 48 and the Cherkasy region – 77. The largest number of registered unemployed was in the Donetsk region.

Mr Halytsky stresses that the near million registered unemployed reflects only those who have approached employment centres, whereas these make up only some 60% of those actually needing work.

He did, however, say that the situation may be stabilizing. Whereas in December 2008, employment centres were registering around 8-9 thousand people per day, the figure in January – February this year was around 1 thousand, with the number of people who approached employment centres in January 130 thousand less than in December. Furthermore, if the number of  vacant jobs at the end of 2008 was falling by around 2 thousand each day, the fall in the second half of January was only by 500 jobs, this, he believes, giving some grounds for optimism.

He suspects that the reason for the large figures at the end of last year was linked first with panic over the crisis, leading a large number of people who were basically not working before to register, perhaps having lost hope of finding work. A second factor he believes was that employers reduced their staff by those it was easy to dismiss in the first instance.

Having used the expression “first wave of job losses”, his interviewer logically asked when to expect the second wave.

“I am not saying that there will definitely be a second wave, but it is possible. According to the State Department of Statistics, at present 900 thousand people are working reduced hours, and 800 thousand are on unpaid leave.”  He fears that if businesses do not pick up, these people are likely to also become unemployed. The problem is that in order for businesses to begin functioning properly there needs to be a stabilization of the banking system. Banks need to begin lending money again, at least those enterprises that inject money into State revenue.  He says that there are 3-5 thousand of such enterprises which must become the focus of economic growth, with consumption within the country increasing – to get blood circulating again within the organism.

He says that there are no problems with the financing of the Employment Service or with paying unemployment benefit. This is covered by the article in the Budget regarding financing for the Unemployment Fund. “Benefits are paid in full and on time.”

Before the crisis, one saw a trend towards legalization of earnings. What in your opinion will be the trend as far as informal payment (literally, “in envelopes”) is concerned this year?

The practice of informal payment has started up again. Employers will resort to this  to improve their outgoings. However it should be remembered that at enterprises where there are over 150 people it’s hard to pay wages informally, whereas in an office with 30 to 50 employees the practice is possible. However from the point of view of security I wouldn’t recommend this, after all such remuneration in envelopes is a criminal offence.”

From the interview in “Den” published in No. 25, 14 February 2009 "День"

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