Unemployment continues to rise

  • 2009-04-08
  • By Monika Hanley
RIGA - Latvia's unemployment rate is continuing to skyrocket, sparking widespread concern among politicians and workers.
Latvian Welfare Minister Uldis Augulis said that according to the latest information the registered unemployment is 10.4 percent, a total of 113,000 members of the workforce.
About 16 percent of the total includes people 20-24 years old, many of whom were laid off after the construction industry slowed down.

Of the total number of jobless, only about 50,000 receive any unemployment benefits. These numbers also mean that the majority of the unemployed do not pay social taxes. 
Augulis presented the figures to Prime Minister Valdis Dombrovskis in late March.
"It is the main government's task to work to ensure sooner economic recovery. Only then the problem of unemployment can be solved, there will be economic activity, there will be work places, and the problem will be solved," said Dombrovskis.

In 2008 alone, 4,128 public administration jobs were lost 's about 6.4 percent of the total work force in the sector, reported Finance Ministry Secretary Martins Bicevskis.
Bicevskis said that "a uniform system of compensation to the employees of the central and local government authorities is currently being developed to replace the numerous existing compensation systems. The bill is expected to be submitted to the parliament on June 1 this year."
According to the latest forecast by the Economics Ministry, the unemployment rate in Latvia in 2009 is likely to reach 13.6 percent or higher.

"At the time of the survey [January 2009] companies said that direct price reduction against the current level would be comparatively small but further reduction of production prices would be required as the overall economic situation aggravated or competitiveness of foreign producers increased," said the Economics Ministry in the report.


The national statistics office has also reported that the average monthly wage for over 25 percent of workers in Latvia is below 285 euros 's 12 percent less than 2007.
"I was working for the National Theater full time for 150 lats a month," said Andris, a trained philologist. "I luckily found a job with a storage company so I can get by now," he said.
The number of people earning 1,000 lats a month before taxes is below 1 percent.
The situation across the Baltics is grim for job seekers, but Latvia still had the highest unemployment rate in 2008 with 7.5 percent of the active population looking for work, as compared to 5.8 percent in Lithuania and 5.5 percent in Estonia. 

The new government is currently discussing possible solutions to the growing unemployment rate.
"With the Welfare Ministry we discussed a possibility to extend payment of unemployment benefits to nine months. Now the payments are from four months to nine months. Unfortunately, the bad news is that the solution has to come in a fiscally balanced way, which means that benefits will be smaller," said Dombrovskis.
The government also announced that the European Social Fund resources would be used to create re-training programs for the unemployed. 

"On the one hand, it will improve competitiveness in the labor market, on the other hand, small stipends can be paid during these qualification programs, ensuring at least some income," said Dombrovskis.
Though these measures cannot come soon enough and may help stem the nearly 1 percent a month increase in unemployment, the prime minister noted that unemployment issues will be solved only after economic growth resumes.