Ukraine's unemployment doubles in March, could reach 15% this year

Ukraine's unemployment doubles in March, could reach 15% this year
Unemployment in Ukraine has spiked from 8.3% in 4Q19 to at least 13.7% in March 2020
By bne IntelliNews May 3, 2020

Due to the quarantine, the number of unemployed Ukrainians has roughly doubled in March, to 2.5-2.8mn people, calculates the Ukrainian Chamber of Commerce and Industry.

“The unemployment rate today is 13.7-15.4% – this is the highest rate in the last 15 years,” said chamber president Gennadiy Chizhikov in recent remarks. In other comments Chizhikov said the number of unemployed could reach half a million people.

Unemployment has been running at about 9-10% for most of the last five years, but started to fall in 2019, dropping below 8% to a five-year low of 7.3% in the third quarter, after Ukrainian President Volodymyr Zelenskiy and his Servant of the People (SOTP) Party took over the reigns of power.

However, as the year came to a close unemployment rose again to 8.7% and now it has spiked to over 13% – higher than during the worst of the economic dislocation caused by the Euromaidan protests in 2014. In January-­February, the average nominal wage was UAH 10,787, or $441.

A survey carried out by the chamber found a quarter (26%) of companies say they plan to cut staff. To get some relief, quarantined businesses should pay only utilities but not rent during the quarantine. 

The government is making $1.3bn available to small businesses in its ‘5-7-9%’ loan programme. Designed to preserve jobs, the maximum loan size is $110,000 and all loans are to be interest free until March 31, 2021. 

Part of the problem is that Ukrainian workers who returned home early in April as the pandemic forced lockdowns across Europe have stayed at home and not gone back to their overseas jobs.

Shorn of 100,000 seasonal workers, Germany’s farmers are working with their government to fly in 40,000 workers from Eastern Europe, reports Deutsche Welle. There are similar reports from Romania and Poland, where farmer and construction associations are working out visa regimes and medical protocols to bring back many of the estimated 250,000 Ukrainian workers who went home before the borders closed in early April.

Wage remittances last year totalled $16bn year, according to the World Bank, making labour Ukraine’s second largest export after food.

About 10% of Ukrainians working in Poland went home, estimates LIGA.net. A total of 143,200 left Poland, according to Agnieszka Golias, spokeswoman of Poland’s State Border Service.

Last year, Ukraine’s embassy in Warsaw estimated 1.5mn Ukrainians were working in Poland. To encourage Ukrainians to stay, Poland’s Health Ministry says that all will receive free coronvirus (COVID-19) tests and, if positive, free treatment. Poland’s Sejm recently approved an anti-crisis programme that gives labour migrants automatic extensions of work visas and residence cards for the length of the epidemic, plus 30 days.

One third of Ukrainian workers who left Poland due to the quarantine want to go back and half of Ukrainians working in Poland want to extend their stays there, according to a tally of callers to a bilingual telephone hotline set up by a Polish employment agency, Gremi Personal. In the first 10 days of the hotline, “We are Together,” 1,287 Ukrainians called about working in Poland, Gremi said in a press release.

 

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