Official numbers mask job growth

TALLINN - Unemployment still remains one of the biggest problems in Estonia today. An estimated 128,000 people were jobless in the second quarter of 2010. In the first quarter this year the number was a record-high, when 137,000 people were without work and the jobless rate was 19.8 percent. The small decrease in the second quarter indicates that the recovery of Estonia’s export industries has done little to spur large-scale job growth in the smallest Baltic State, which has been hammered by the economic crisis along with Latvia and Lithuania.

According to the statistics bureau, unemployment is a much more serious problem among men than women. In the second quarter the unemployment rate among men fell slightly, to 22.6 percent, but among women, who are more often employed by the public sector than the private sector, the rate is only 14.8 percent.
 The highest rate of unemployment is registered in Ida-Virumaa County, with a 17.8 percent rate, about 13,500 people.

The Estonian Confederation of Trade Unions estimated that the decline in the unemployment rate in the second quarter of 2010 is a first sign of a positive shift, but in order for it to continue, the labor market services need more financing from the state budget.

Harri Taliga, the chairman of the organization, stated that the market needs more financing from the state budget as the labor market services are largely financed from EU funds, not from the state budget.
According to the Confederation, the decrease of the unemployment rate from April to June is a signal of a positive change in this tendency. Taliga considers that “the developments in labor policy are revealed with a very long delay and, hence, the project-based approach that has been the predominant one thus far in increasing the employment rate is not sustainable.”

“The labor market services need extra funds right away, but it is also high time to think of the future, when we will no longer receive any funding from the European Union Social Fund,” Taliga.explains.
Taliga added that the rise of long-term unemployment is also likely to happen. “Hence, it is important for the labor market services to boost first and foremost the creation of permanent and good-quality jobs,” he added.
The chairman of the Confederation said that it was of particular interest to him how the number of unemployed persons decreased by 9,000 while the number of employed persons grew by only 5,000.

According to Kristi Villsaar, analyst of the Estonian Unemployment Insurance Fund, the number of registered unemployed people has decreased in the last four months. Villsaar said that in July, the inflow to registered unemployment was 6,465 persons, and 9,869 persons were deregistered. “Approximately half of the individuals who were de-registered during July became employed – they found a job or became an entrepreneur. We assume that the number of individuals who found a job is actually higher because all persons do not inform the Unemployment Insurance Fund when they have found a job,” Villsaar explained.

If comparing with the data of the Estonian Tax and Customs Board, the number of individuals who became employed is up to 10-15 percent higher. “The Unemployment Insurance Fund does not have the data for seasonal workers, thus it is difficult to say how many of the individuals who have been de-registered in the spring and in the summer, have found a temporary job for the summer.”
In July, 3,428 new vacancies were posted in the Fund and during the month 5,428 vacancies were mediated by the Fund. By occupation, the largest proportion of the vacancies were mediated for craft and related trade workers (31 percent) and for service and sales workers (18 percent).

Villsaar says that “We forecast that in August the number of registered unemployment will still decrease, and in September it may increase again, but it will not be as high as it was in the spring of this year.”
In comparison with other European countries, the unemployment rate in Estonia is considered to be very high. In March 2010, the harmonized unemployment rate in Estonia was 19.0 percent.

In March 2010, the average harmonized unemployment rate in the EU27 countries was 9.6 percent.