Czech Unemployment Down To 3.8% In June

Unemployment in the Czech Republic fell for the fourth month in a row. It fell to 3.7 percent in June, which is two-tenths of a percentage point less than in May and the same as last June. The decline is mainly due to the start of the economy following the release of measures against the spread of coronavirus. According to analysts and the Labor Office of the Czech Republic, the unemployment rate will not rise significantly and may continue to decline slightly in the coming months, unless the epidemic situation worsens and the measures become stricter. The situation in the labor market should not be negatively affected by the suppression of the Antivirus program, through which the state contributed to companies’ wages.

Before the holidays, regional disparities deepened. The most affected regions show unemployment of 5.2 to 5.6 percent, while in the least affected regions the values are half. The highest share of the unemployed has long been in the Ústí nad Labem, Moravian-Silesian, and Karlovy Vary regions, ie the three regions affected by the decline in coal mining and the high number of socially excluded localities. On the contrary, the lowest unemployment rate remains in the Pardubice Region – 2.4 percent, the Labor Office of the Czech Republic informed today. The situation has changed the most in the long run in Prague and the Ústí Region, where the share of unemployed persons increased by 0.4 percentage points compared to June 2020.

Compared to the previous month, the number of jobseekers in the register of labor offices decreased by approximately 12,500 to 273,302, while the number of job vacancies increased by 9,000 to 355,612. Compared to last year, 3,665 more people were looking for work in June this year, but the number of vacancies also increased year on year, by more than 20,000.

According to experts, the reason for the further decline in unemployment is mainly the improving pandemic situation and the shortage of workers from abroad. The labor market is also affected by seasonal work in construction, agriculture, forestry, fishing, animal and food production, hospitality, sales, or services. In the coming months, unemployment could fall slightly, according to the Labor Office, unless the epidemic situation worsens and current measures are tightened. For example, in the gastronomy and hotel industry, the number of vacancies is gradually increasing in connection with the dismantling.

“People are returning to work and we will check with the Labor Inspectorate whether companies are not dormant due to the loss of their employees,” the Minister of Labor and Social Affairs Jana Maláčová (ČSSD) wrote on Twitter.

The average age of the unemployed last month was 43.2 years, while last year it was 42.2 years. People with low qualifications, with basic, incomplete and secondary vocational education, with an apprenticeship certificate or secondary education with a GCSE were most often without work.

There are on average 0.8 job seekers per vacancy in the Czech Republic, most of them in the Karviná district, where it is more than ten. Employers most often look for workers in the field of production and construction. They are interested in building construction workers, assembly workers, forklift operators, production assistants or cleaners, and truck drivers. The highest demand for new employees is in Prague and the Central Bohemian Region.

“The labor market has survived the pandemic much better than we initially expected. And even with the announced impending suppression of Antivirus support programs, there is no reason to fear a sharp deterioration. Vít Hradil. According to him, the opening of the economy and thus the growth of employment, especially in services, will reduce the number of unemployed. Generali Investments analyst Radomír Jáč stated that although the covid’s pandemic last year had a significant negative impact on the performance of the Czech economy, the impact on the labor market was relatively insignificant, which was also helped by government stabilization programs.

Free labor will rapidly decline in the labor market, says Next Finance analyst Markéta Šichtařová. After the end of the lockdown, optimism will increase in the economy. In addition, the labor market will be helped by the start of outdoor work and also by the fact that construction and industrial companies continue to wait for the return of more foreign workers. “We anticipate that while the average unemployment rate was 3.6 percent in 2020, it will rise just above four percent this year,” she estimated.

According to economists, the development of unemployment was helped by the temporary government program Antivirus, thanks to which employers did not have to lay off workers. Three contributions were paid from it. For the period from 12 March last year, ie from the announcement of the first state of emergency, until the end of May this year, they could receive money for people’s wages from closed plants and also from companies with limited production and services due to loss of demand, staff and raw materials. By the end of October, the government had decided to provide part of the compensation to quarantined and isolated workers.