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Graduates feed unemployment

SLOVAKIA’S unemployment rate continued to grow in September after a short summer break, fuelled by the traditional inflow of new graduates and fewer temporary seasonal jobs, while the proportion of long-term unemployed remained high. September’s jobless rate for people ready to work was over 13.8 percent, but when factoring all unemployed, it exceeded 15 percent.

SLOVAKIA’S unemployment rate continued to grow in September after a short summer break, fuelled by the traditional inflow of new graduates and fewer temporary seasonal jobs, while the proportion of long-term unemployed remained high. September’s jobless rate for people ready to work was over 13.8 percent, but when factoring all unemployed, it exceeded 15 percent.

“Especially the inflow of school-leavers [into job office registers], in particular secondary school graduates, increased unemployment in September, while their number increased more significantly when compared with the previous year,” Ľubomír Koršňák, analyst with UniCredit Bank Slovakia, wrote in his memo, specifying that their number ballooned by 62.5 percent to 13,400. “Thus new school-leavers increased unemployment by as much as 0.5 percentage points.”

Koršňák added that in spite of this increase the number of jobless school-leavers was lower than during the crisis years of 2009 and 2011. In general the number of jobless school-leavers is gradually decreasing due to the demographic developments of the 1990s, when the country saw a decline in the birth rate, as students born in that decade are now leaving school.

“The number of school-leavers registered at job offices in May and September this year, i.e. during the spring and autumn wave of registrations, was the second lowest over the last 10 years,” said Koršňák.

However, the high unemployment rate complicates school-leavers’ efforts to find work, and they remain registered with job offices for longer periods of time. At the end of September there were 33,600 school-leavers registered with job offices, which was, except for 2010-2011, the highest number in the last 10 years, according to Koršňák. Compared with the same period in 2012, the number of school-leavers registered with job offices increased by 6,600.

“In 2013 university graduates also had a problem finding a job,” Koršňák wrote in his memo, adding that even though they still made up less than one third of all school-leavers registered with job offices, their number almost doubled to 9,600 over the year.

In this respect Michal Páleník from the Employment Institute criticises the current flat subsidy scheme of public universities. Slovakia, with a population of 5.4 million, has 36 high schools and universities, 20 of which are public, 13 are private and three are state schools, the Pravda daily wrote.

Statistics figures

In September the Central Office of Labour, Social Affairs and the Family (ÚPSVaR) reported 373,396 job seekers ready to take on work immediately. This was 3,760 more than in August and almost 10,100 more than in September 2012. The jobless rate thus stood at 13.84 percent, up 0.14 percentage points month-on-month and 0.4 points year-on-year.

The total number of unemployed, including people on sick leave, graduate internships, and people doing voluntary and municipal work, was 406,498 at the end of September. In month-on-month terms this is an increase of 4,285 people. The September unemployment rate calculated from the total number of unemployed was 15.06 percent, an increase by 0.16 points in monthly as well as yearly terms.

ÚPSVaR sees a bigger success rate in finding jobs for jobseekers behind the mild increase in the rate.

“The increase of the jobless rate is not very steep, but actually only mild, which was thanks to the fact that the job offices managed to place roughly 4,000 more people on the labour market than during the previous month,” ÚPSVaR spokesperson Peter Zeman told the public broadcaster Slovak Television.

Unemployment went up in September in all of Slovakia’s regions, except Nitra Region, which witnessed a drop in its jobless rate of 0.15 percentage points to 13.07 percent. Prešov Region reported the highest overall unemployment rate at 19.81 percent, as well as the biggest growth, of 0.42 points. The regions of Banská Bystrica (18.39 percent) and Košice (17.77 percent) reported jobless rates over the average of 13.84 percent.

September’s statistics indicate that Slovakia did not see an increase in new orders for industrial companies. Such companies laid off more than 1,900 people in September, one fifth more than in August, the Hospodárske Noviny economic daily reported. This meant the fastest month-to-month increase in unemployment of industrial company workers, especially in the electro-technical sector.
“Companies expected an increase in orders from the west in the autumn,” Peter Paška, the head of the ProAct People personnel agency, told Hospodárske Noviny. “However, this has not happened.”

In this respect, Tatra Banka analyst Boris Fojtík said that the Slovak industry is very segmented, which in real life may mean that one segment could lay off people while others are doing well.
Head of McRoy Group personnel agency Luboš Sirota sees seasonal influences, in particular, as being behind the current unemployment rate.

“As there’s a lack of growth-promoting incentives, the ‘seasonality’ is a decisive factor that influences developments in unemployment,” Sirota said, as cited by the SITA newswire, expecting stagnation in the future. “The pre-Christmas period and higher recruitments [for seasonal jobs] related to this period may bring a certain revival in November.”

Analysts and market watchers do not expect any significant changes by the end of the year.

“It is realistic to count with [the forecast] that the situation will not improve by the end of the year and the rate will oscillate somewhere below 14 percent,” said Pavol Karázs, analyst with the Slovak Academy of Sciences, as cited by the public broadcaster Slovak Radio.

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