RIGA - Despite Latvian Finance Minister Einars Repse's claim that the economy will reach bottom in the first quarter of 2010, for many people living in Latvia, the bottom has already been reached. The State Social Insurance Agency (VSAA) has registered 132,519 people as unemployed.
Only 69,510 continue to receive unemployment allowances. VSAA press secretary Edite Olupe believes that the number of people requesting social support will only grow in the future. "The number of people who wish to apply for the allowance has increased recently. These allowances… depend on the municipality, where the person lives," says Olupe.
"Today unemployment allowances reach only 52 percent of the registered unemployed. Many of them cannot find work, even after the payment period has passed," she says. The average unemployment payment is about 170 lats (242 euros) per month.
The VSAA says that the number of people receiving over 1,000 lats per month will increase, reflecting the higher skilled workforce, and highly paid state sector workers, that are losing jobs. "The main reason [for the increase] of insurance payments is the reduction of state bureaucrats. In government, payments are high. At this moment more than 1,000 people in Latvia receive an allowance of 1,000 lats or more," says Olupe.
With increasing company layoffs, many of the unemployed are thinking of going abroad. "I lost my job in April. My insurance for the first two months was 350 lats. Then, gradually it began to shrink. I have a family, and finding work in Latvia is a problem. I'm going to Norway where I can work as a mechanic. My friend has been working for three months in a sawmill. They pay real money and don't give false promises, says Normund.
A state jobs program which subsidizes the employer is unpopular and not very effective in supplying jobs. Despite help given for training the laid-off, there are limited openings in the labor market.
"I lost my job at the beginning of this year. Three times I attended different courses; I prepared both for cooking and seamstress work, but there is no place to work right now. I don't know anybody who got a job from the State Employment Agency," complains Ljuba. Every day sees more people coming to the state agency to register, but companies are in a reduction process. In August there were 1,644 job openings, but during the first 10 days of September, this had dropped to 494.
The unemployment rate remained fairly stable for June and July, but started growing again at the beginning of September, said State Employment Agency head Baiba Pasevica, reports news agency LETA. She believes that by the end of the year, the number of unemployed will reach 170,000 in Latvia. There are no grounds for expecting the unemployment rate to stop rising, because new jobs are not being created; in addition, state institutions and hospitals are planning further staff cuts, said Pasevica.
