Employment as marker of state of affairs in Belarusian economy
For the first time over the last three years, in April 2016, more than 20,000 people were laid off in Belarus. In 2016, most layoffs were reported by industry, construction and agriculture. Significant layoffs and growing unemployment contradict the official picture of the economic recovery. The government will continue its efforts aiming to distort the real picture of what is going on in the economy.
According to the National Statistics Committee, in April 2016 large, small and medium enterprises (state and private) recruited 45,965 people, and laid off 66 127 people.
The ratio between those hired and those fired constituted 69.5%, which is the worst indicator over the past three years. The number of laid-off has exceeded the number of hired in all economic sectors, except agriculture due to the beginning of spring field work, and the IT sector. Electricity and heat supply organisations have hired one person and fired five due to the seasonal operations of regional heat and electric power plants.
In the past six month, the number of those fired has been consistently exceeding the number of those hired. In 2016, the bulk of layoffs occurred in manufacturing, construction and retail trade. The main culprit is the overall economic situation. By holding layoffs industrial enterprises attempt to reduce their costs and current losses. The construction industry is not the state’s priority any longer and the volume of housing construction will decline. Enterprises lack own funds to renew their fixed assets and cannot afford credit resources. Retailers, amid falling revenues of the population, reduce their regional networks and close unprofitable retail properties, which is leading to staff cuts.
The record high downsizing in April has cast doubts on official reports about economic recovery. Businesses are unable to increase production volumes without increasing the number of employees, or reducing the number of part-time workers. In April, the number of unemployed in Belarus increased by 300 people. Labour exchanges have set limits for unemployment registrations. Healthcare, which was previously on the top of the job offers’ list, has started laying off workers, which means that the negative trends in the economy persist.
In the given circumstances, the government will seek to fiddle with the real employment data and state enterprises may be requested to stop layoffs temporarily or increase part-time employment. In the public sector, layoffs may lead to a slight increase in wages. The sign of the economic recovery would be the off-seasonal growth in the number of hired over the number of fired for more than three consecutive months.
Record high layoffs in April 2016 imply that crisis has rooted in the economy. The state will fiddle with the employment and unemployment data in order to diminish the real numbers. Only when the number of hired will exceed the number of fired for three consecutive months, the economy will show some signs of recovery.