Russia ranked 18th in Europe in terms of unemployment

MOSCOW, February 24 – RIA Novosti. The lowest unemployment rate at the end of 2020 was observed in the Czech Republic, and the highest in Spain and Greece. Russia is in 18th place – these are the conclusions of a study conducted by RIA Novosti *.

The past year has been one of the toughest for the global economy since the end of World War II, largely driven by the coronavirus pandemic. Additional complications were associated with widespread restrictions on business operations and travel bans. Therefore, the work of many companies was almost completely stopped, and entire sectors faced multiple drops in revenue.

Against this backdrop, it is not surprising that the unemployment rate rose almost everywhere. In the most acute period, in the spring of 2020, this indicator in a number of countries grew at a truly fantastic pace, however, by the end of the year the situation had largely stabilized.

To assess the situation on the labor market in various countries in 2020, experts, based on the data of official statistics, prepared a rating of European countries in terms of the level and dynamics of unemployment.

Historically high unemployment in Europe

If we look at the statistics before the pandemic, we can see that the unemployment rate in many Western European countries was at a fairly high level. This is due to many reasons, firstly, the southern countries (Greece, Italy, Spain and a number of others), after a decade of rapid growth in the early 2010s, faced a fairly large-scale crisis, due to which in some periods the unemployment rate reached 30 percent …

Second, wealthy European countries have a strong support system for unemployed, which often reduces the incentives to find a job and makes a comfortable life for many years on unemployment benefits. Thirdly, in Europe, a very small number of countries could boast of high economic growth rates in recent decades, which, of course, had an impact on employment.

High unemployment in Eastern European countries has several other reasons. Here the dominant role is played by the weakness of the economies, as well as structural unemployment due to the collapse of industry in the era of socialism.

In this case, two poles are clearly visible, Belarus, which largely retained industrial production, is characterized by unemployment at the level of four percent, and Ukraine, which has almost completely dismantled the Soviet economic legacy, is more than eight percent. Moreover, in Ukraine, this figure was even higher – 11-13%, but in recent years it has greatly decreased due to the outflow of the working population to work in the EU and Russia.

In our country, the situation with unemployment was developing quite favorably until 2020, which was reflected in its steady reduction. At the beginning of 2020, this figure dropped to a historic low of 4.6%, but in 2020 it rose significantly due to the COVID-19 pandemic.

Sixfold difference in unemployment

According to the study, in the fourth quarter of 2020, the lowest unemployment rate was observed in the Czech Republic, where the share of people looking for work does not exceed three percent. Also, rather low unemployment, despite the pandemic, is recorded in Poland, the Netherlands, Belarus, Hungary, Malta and Germany. In all of these six countries, the unemployment rate did not exceed 4.5 percent in the last quarter of 2020.

Countries with high unemployment are at the other pole of the rating. The most difficult situation is observed in Greece (16.7%), which has been struggling with a severe economic crisis for a decade. A similar unemployment rate in the fourth quarter of last year is observed in Spain (16.2%). In other countries at the end of the list, the situation with unemployment is noticeably better than in the two lowest ranking countries. In Lithuania this indicator is at the level of 10.3%, in Ukraine the share of unemployed is 9.5%, in Italy – 9.1%, and in France – 8.8%.

It is easy to see that unemployment in the leading country in the ranking is almost six times lower than in Greece, which is the last in the table.

Russia is in the middle of the ranking. Our country ranks 18th with a 6.1% unemployment rate in October-December 2020. Almost the same result was shown by Belgium, and the situation with unemployment is somewhat worse in Luxembourg (6.5%).

Only one country has cut unemployment during the pandemic

In 2020, only one country of the surveyed was able to reduce unemployment amid the pandemic: in Italy, this figure decreased by 0.4 percentage points over the year. This may be due to a sharp increase in demand for delivery of food, goods and medicine, as well as the demand for additional staff in hospitals, nursing homes and social services. Unemployment rose, but not much (within 0.1 percentage point) in Greece and Belarus.

In Russia, in 2020 the share of unemployed increased by 1.5 percentage points, which is slightly more than the average for the countries studied. On average (median) across Europe last year, unemployment increased by 1.1 percentage points.

The largest increase in unemployment in the period under review was observed in the two Baltic countries. In Lithuania, unemployment increased by 3.9 percentage points over the year, and in Estonia – by 3.7 percentage points. Perhaps this is due to the closure of borders in the European Union, which limited the departure of young specialists to richer countries, thus young people stayed at home and began to look for work. Also, a fairly high increase in unemployment in the past year was observed in Ireland, Spain, Iceland, Cyprus and Latvia.

Youth employment problems in Spain and Greece

Separately, we can consider youth unemployment, which, as a rule, is much higher than the general unemployment rate. According to the study, the median rate is just below 20% (for comparison, the total unemployment rate is only 6%), and in some countries it exceeds 35%.

The worst situation is in Greece and Spain (35% and 40% respectively). Also, it is quite difficult for young people (15-25 years old) to find work in Italy and Lithuania. In another 11 countries, at least one in five young people has difficulty finding a job.

The opposite situation is observed in Germany, where only 6.2% of young people cannot find work. Below 10% is youth unemployment in three other strong economies: the Netherlands, Switzerland and the Czech Republic.

It is noteworthy that the youth unemployment rate during the pandemic rose more (+3.5 percentage points) than the overall unemployment rate (+1.1 percentage points). In general, this is not surprising, in difficult times, companies prefer to hire and retain a proven workforce, and it becomes much more difficult for young people to find work. Thus, it is young people who have suffered the most from the pandemic, losing their earnings or missing out on the chance to find suitable jobs.

Forecast for the future

According to RIA Rating analysts, in 2021 the labor market in European countries will recover, but rather cautiously. Most likely, in a year it will be possible to win back about two-thirds of losses in jobs, and European countries will be able to fully overcome the consequences of the pandemic in terms of unemployment no earlier than 2022.

* The rating was prepared by order of the RIA Novosti agency by the specialists of RIA Rating.

Author: wedocount

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