The economist from the Bank of Latvia, Ieva Opmane, comments on the latest data showing that the unemployment rate in Latvia remained low in the first quarter — 7.1% of the economically active population. However, there are certain nuances that the statistics do not account for.
A Question Arises
In practice, this 7.1% means that approximately 66,000 people in Latvia would like to work but have not yet found a job. Situations vary, but the economist raises the question: if employers regularly state that it is difficult to find employees, why then do so many thousands of people remain unemployed.
The economist explains that one of the answers lies in geographical differences. There has long been a significant contrast in the labor market situation between Riga and more remote regions in Latvia. In Riga, unemployment is virtually nonexistent — the registered unemployment rate at the end of April was only 3.6%, while in Latgale, for example, the registered unemployment reached 9.7%, with the actual rate even higher.
It's Easier to Leave
Regional mobility programs provide opportunities for those willing to change to seek jobs outside their region, but it often seems that it is easier for people to decide to go work abroad than to commute to a neighboring city, notes Opmane. At the same time, for those who, for various reasons, remain tied to their place of residence, the job search can be much more complicated and prolonged.
At the same time, other structural problems in the labor market persist, concludes Opmane. The shortage of labor is still particularly noticeable in healthcare, information technology, engineering specialties, and some other sectors. This means that a low unemployment rate alone does not indicate a fully balanced labor market.
Discrepancy Between Opportunities and Desires
The economist from the Bank of Latvia points out that there is still a significant mismatch between the skills of job seekers and the needs of companies in Latvia. However, various training programs are available — both organized by the State Employment Agency and others in which people participate on their own initiative.
"It seems that lifelong learning itself is becoming a skill that needs to be developed. Currently, it is often the employer who has to take the first step by providing training for new employees on the job and bearing the associated costs," notes Opmane.
