The labor shortage is keeping wage growth fast and the average gross salary will increase by 6% this year, Swedbank senior economist Liis Elmik has said.
Data from Statistics Estonia released on August 16 showed that unemployment decreased from 7.1% in the first quarter to 6.9% in the second quarter. There were 2,000 fewer jobseekers this spring than a year earlier, but nevertheless 13,000 more than two years ago.
“Despite the extremely rapid economic growth, it will take quite a long time for the unemployment rate to reach the pre-crisis level. Value added is growing mainly in capital-intensive industries, while many labor-intensive activities are still struggling with low demand. The third wave of coronavirus will increase risks again in several labor-intensive sectors, while we do not expect a complete closure of the economy in the baseline scenario of our forecast in the fall,” Elmik said.
She said the decrease in unemployment should continue both this year and next.
“Demand for new employees has increased significantly in recent months in both industry and services. Employees were most wanted with the help of the Unemployment Insurance Fund in industry and trade. According to entrepreneurs, labor shortages are at pre-crisis levels in industry, services and construction. About 30% of entrepreneurs see labor shortage as their biggest obstacle to development,” the senior economist said.
According to Elmik, such an extensive labor shortage with continued high unemployment shows the unsuitability of vacancies and job seekers both in terms of profession and place of residence. Altogether 44% of the unemployed have primary, basic or secondary education, without a specific specialty. (ERR/Business World Magazine)