Region: Slovak unemployment hits six-year high

By Jana Liptáková

From The Slovak Spectator

Slovakia's labor market had its third consecutive month of rising unemployment claims as more than 13 percent of eligible workers found themselves without jobs.

The Slovak Center for Labor, Social Affairs and Family March 21 reported the number of registered unemployed was 13.16 in February. The last time the rate rose above 13 percent was February 2005.

While industrial production and GDP show signs of recovery, experts say it will take longer for for the country's jobless rate - one of the highest in the EU - to return to pre-crisis level. 

"The situation has gradually stabilized after the crisis period," said Michal Páleník of the Employment Institute, a Bratislava-based think-tank. "The question is whether this is only a consequence of seasonal influences or a longer-term trend. The figures for the first several months of 2011 will show us."

According to Eurostat, the European Union's statistics office, Slovakia had the second-highest unemployment rate in the union in December, at 14.5 percent; only Spain had a higher joblessness rate at 20.2 percent. The average unemployment rate across all 27 countries of the EU was 9.6 percent in December. Many labor experts prefer Eurostat's numbers as governments rely on unemployment benefit claims for their data, which can be misleading. Eurostat does not have figures available for 2011.

The number of unemployed Slovaks available to work immediately grew to 350,969 in February, up more than 5,000 from January.

"Industry, which has already come back to its pre-crisis level, has not started yet to recruit labor in a more significant way," said Dávid Dereník, an analyst at UniCredit Bank. "In spite of a more optimistic outlook for industrial production due to positive developments in Germany, the [Slovak] labor market is not yet awakened."

Analysts have predicted the market would be adversely affected by layoffs in the public sector during the beginning of 2011. The first months of the year regularly record seasonal increases in unemployment. In addition, a government-approved recovery plan for three of Slovakia's state-owned rail firms will result in nearly 5,000 layoffs by 2014, with most coming this year.

But positive developments in industrial production and new investments in production of electronic appliances and in the automotive industry might positively influence the labor market by late spring.

"There are visible signs of the end of the crisis, though these signs are often very fragile," Páleník said. "Production has been increasing, but employment has not increased as it should. It's possible to expect it would lag behind growth in production by six to 12 months."

Dereník estimated Slovakia will have to wait several years for its unemployment rate to return to its pre-crisis level, perhaps until 2017.

Slovakia's level of long-term unemployment is what has many analysts most alarmed. Job offices at the end of 2010 registered a total of 184,694 residents who had been unemployed for more than one year, accounting for nearly 50 percent of the country's total unemployed. That number was an increase of 44,581 since December 2009 and 77,174 since December 2008.

Eurostat's statistics indicate Slovakia had the EU's highest long-term jobless rate, at 9.4 percent for the third quarter of 2010, followed by Latvia and Estonia at 8.3 percent and 8.2 percent, respectively.

Labor market experts say most who fall into the category of long-term unemployed are unskilled workers with low levels of education or limited qualifications.

"Because of the increasing requirements for qualifications and education, it is a hurdle for these people to get a job," said Andrea Hajdúchová, a spokeswoman for the Labor, Social Affairs and Family Ministry. "People in higher age groups and members of segregated communities also make up a significant proportion of the long-term unemployed."

The ministry is also preparing changes to a law providing assistance to persons in material need, and the government is considering how to divide benefits based on social solidarity and merit.

"The first part will go to everybody who is in material need," Hajdúchová said. "But only those who endeavor to educate themselves, increase their qualifications and get a job will get the second part."

- Jack Buehrer contributed to this report.

Jana Liptáková can be reached at news@praguepost.com