Transition to unemployment measurement by ILO standard is likely to strengthen social protection of unemployed Belarusians
After Belarus adopts the ILO methodology in measuring unemployment, the unemployment rate will multiply. Belarusians avoid registering at the labour exchange due to the negligible size of unemployment benefits and numerous requirements for the unemployed. The new approach is likely to improve the forecast of budget expenditure on social needs and prompt the government to revise business terms for enterprises creating new jobs.
According to the National Statistics Committee, as of early 2017, unemployment in Belarus will be measured by the International Labour Organization standard. The unemployment rate will be determined quarterly based on household surveys. People, who search for jobs independently from the state employment agencies will also be measured as unemployed. In addition, the unemployed will include retired and full time students, who are ready to start work immediately and search for work independently.
According to preliminary data, in 2015, unemployment, measured by the new standard was 5.2%, while official unemployment levels totalled 1%.
The difference between the unemployment rate measured by the ILO standard and that reported officially is due to complex registration procedure at the public employment agencies. Once registered, an unemployed is required to complete paid relief works one-two days per month, if he or she refuses, his/her unemployment benefits could be suspended. As of September 2016, unemployment benefits totalled BYN 24.3. In order to report low unemployment levels, the Belarusian authorities applied restrictions to the registration at the labour exchange.
The new approach to measuring unemployment not only would enable comparing Belarus’ data with that in other states, but also would allow the government to measure the number of people in need of a job. The government could reserve budgetary funds to retrain the unemployed, if necessary, to provide free financial resources for business start-ups and to redistribute workforce throughout the country. In addition, educational institutions would be more accurate in determining the need for graduates and would cut places on specialities producing excess workforce. Moreover, the data about potential recipients of grants on housing and utility needs will be corrected. Given the dynamics, in 2016, the unemployment rate in Belarus by the ILO standard is likely to exceed 6%, which should motivate the government to take further action in creating new jobs by reducing the tax and regulatory burden on businesses.
Overall, official unemployment rate in Belarus at 1% significantly distorted the real situation on the labour market. By introducing new approach to measuring unemployment the Belarusian authorities will improve the assessment of the necessary funds for social protection of the unemployed and improve business climate for enterprises which create new jobs.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.