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    June 23, 2015

    Unemployment as a factor in Ukraine's death


    June 23, 2015

    Unemployment as a factor in Ukraine's death

    By Aleksandr Rodzhers

    Translated from Russian by J.Hawk

    I really don't like illusions. Especially those which say that "it will work out somehow" or that "foreigners will help us." Every such illusion means that when the situation gets predictably worse, it comes as a "surprise" for the millions of "positively thinking individuals", with the trauma leading to depression and even suicide epidemics.

    One of the key indicators in any Western overview (though traditionally ignored in Ukraine) is the level of employment and unemployment. It's only to be expected, since the level of employment determines the level of well-being and (when combined with the amount of salaries) the potential volume of internal markets.

    So what do we see in Ukraine? Official data (don't ask me how they came up with them if everyone knows that, to put it mildly, they are false) tell us that:

    Ukraine's population is 42.9 million.

    Of which 19 million are economically active (15-70 years of age).

    Employed population is 17.2 million.

    Unemployed population is 1.85 million (9.7%).

    Registered unemployed: 458 thousand (and constantly dropping).

    The average unemployment benefit is now 1196 hryvnia (which means after you've paid utilities you're ready all set to die of hunger).

    So, let's start from the end. Why is the number of registered unemployed dropping? Two reasons:




    Итак, начнём с конца. Почему при существенном ухудшении ситуации в экономике падает количество зарегистрированных безработных? Причин две:

    --First of all, the time window for registering is limited, if you miss it you simply become unemployed.

    --Secondly, the registered unemployed have to be paid, therefore the process of registration is being officially hindered through extra requirements.

    Moreover, it's not just the number of unemployed (4-6% is considered normal--many of whom are simply between jobs), but for how long they've been unemployed.

    So let's look at the official data again.

    --up to 3 months: 33.1%

    --3-6 months: 26.4%


    --over a year: 20.2%


    The internationally recognized acceptable unemployment duration is considered to be 2-4 months. Right now the average period of unemployment (by official data) is about 9 months.

    Now for the unofficial data. For starters, a few statements by the Ukrainian Labor Union Federation (FPU), which tear the official data to shreds.

    Sergey Kondrikov, the head of FPU's anti-crisis center, 2.5 million Ukrainians lost work in the last  year. So how can one claim that there are ONLY 1.85 million unemployed?

    How's that possible? Did they find jobs for everyone else? Has anyone heard of new jobs being created in Ukraine? Not a job here and there, but a couple of million? I haven't. If anything like that happened, the junta would have claimed it as its greatest achievement (with justification). But there's nothing of the sort. Which means that the actual army of unemployed is at least 4 million strong, which means the level of unemployment is not 9.7% but over 21%.  It might be even higher than that, but even that "optimistic" number is scary enough.

    Ruslan Sobol, the head of the Small and Middle Business Owner Association, also believes that by the end of 2015 there will be as many as 4 million unemployed. Moreover, the agreement with IMF specifies a 3% reduction in the state sector employment, which also will add to the rolls of unemployed.

    Confirming my conclusions, the new FPU head Grigoriy Osovoy said that "out of 26 million working age adults, only 9 million are employed. Right now the biggest problem is creating jobs."

    I can't tell you where the 26 million number comes from, if the Derzhkomstat says only 19% (maybe he counted Donbass and Crimea, I'm not sure), but even if you start with 19 million, 9 million workers is less than half.

    But that's the big picture. If you look at the details, two years ago only slightly more than 3 million Ukrainians had jobs in the real economy, in manufacturing. The majority of them were on the Donbass. The rest were traders, barbers, waiters, and various office plankton which doesn't make anything.

    I will never stop repeating the words of John Smith, "manufacturing nations flourish." They clearly don't apply to Ukraine where out of 19 million working-age population only 3 million (and now more like 1.5-2 million) work in manufacturing. "One with fork, seven with spoons." With that ratio, there's no threat of Ukraine flourishing.

    Especially right now, when the miserly salaries have to feed hundreds of thousands of "professional patriots" which "don't herd, don't sow, don't build, but take pride in the society."



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