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Unemployment Declines Slightly

Employment rising since 2009, but citizens still complain about joblessness.

In 2017, the unemployment index in Georgia declined by 0.1% compared to 2016, and was 13.9% in total. According to Geostat, the national statistics service of Georgia, the country is seeing a tendency towards reduction in unemployment. The unemployment level has dropped to its lowest point in the past 13 years. According to the statistics department, the last 15 years’ indicators changed.  The 2017 unemployment numbers were based on 2002 census results, while the 2018 indicators were recalculated using the 2014 census. According to the new methodology, the unemployment level in the first quarter of 2018 was 14%, while the 2017 indicator after recalculation was 13.9%. The 2016 indicator was 11.8% by the previous calculations.

“The 2014 census showed a population decline tendency amid rising urbanization. Specifically, the ratio of the urban population rose to 56%-57% from 52%, and unemployment levels in urban areas are much higher compared to villages. Levels of unemployment are about 23% in cities and 5% in villages. Growth in the ratio of the urban population, naturally, preconditioned higher unemployment levels in the whole dynamic order,” Geostat Executive Director Gogita Todradze said.

According to Geostat indicators, the self-employed constitute a majority of employed citizens, but over the past four years a downturn in self-employment was recorded. In 2017 the ratio of self-employed citizens was 51.7%, down 1.5% from the previous year. Self-employed people were 3/5 of the total employed citizens, while the number of hired employed citizens made up the remaining 2/5. A majority of the self-employed work in the agricultural sector. For comparison, in EU countries, the percentage of those employed who are hired is 85%, and self-employed citizens are 15%. The ratio of the self-employed is four times higher in Georgia than the EU, said Soso Archvadze.

The highest unemployment is recorded in Tbilisi, and has increased by 1.2%. The Imereti Region is second, with 1.6% unemployment, while Shida Kartli and Kvemo Kartli Regions follow, with 2% and 3.5%, respectively. The major contractions in unemployment were recorded in Adjara and Samegrelo-Zemo Svaneti Regions – 5.8% and 3.4%, respectively.

It is noteworthy that in 2017 the highest unemployment level was recorded in the 20-24 year old age group (29.6%). Unemployment in this group declined by 3.2% from 2016. Traditionally, the highest unemployment levels are recorded in the 65 year old age group, the main reason being related to comparatively higher levels of inactivity.

Employment has been rising over the past nine years. Last year had the lowest unemployment levels in 13 years, but social surveys show that unemployment remains a key problem for the population.

60% of Georgian citizens consider themselves unemployed, the NDI’s report from January 2018 stated. Eight years ago, more than 70% of Georgian citizens considered themselves unemployed, so this indicator has declined by 10%. What causes such a huge difference between official indicators and survey indicators? The methodology for the calculation of employment does not reflect reality in developing countries. A majority of Georgian citizens have low-paid and/or unstable jobs, and therefore do not consider themselves employed. For example, according to the 2017 indicators, only 1.18 million persons have declared incomes, including 20% (230,000 citizens) – of 1,200 GEL per year. This signifies that monthly incomes for many were no more than 100 GEL. About 120,000 citizens declared 1,200-2,400 GEL as annual income, which is no more than 200 GEL a month, on average.

The number of comparatively rich citizens is low, and their annual revenues exceed 60,000 GEL (more than 5,000 GEL a month).There are only 9,614 such citizens in this category, or 0.6% of the total number of Georgian citizens.

By Merab Janiashvili
Economic Analyst
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