GEORGIAN TRADE UNIONS CONFEDERATION MANIFEST
03 / 05 / 2022
Unemployment and poverty have been the most significant challenges for the population of the country for years, which is confirmed by all sociological polls conducted in the country.
Most of the restrictions on COVID-19 have now been lifted, and the economy has recovered from its 2020 collapse, when hundreds of thousands of citizens lost their jobs without any compensation, or were left on unpaid leave indefinitely, and in 2021 restored pre-pandemic status. Nevertheless, the rising level of unemployment was maintained. Unemployment in 2021 has increased by 3% compared to the situation in 2019 and stands at 20.6%. The number of employees decreased by 7.5% during the same period. The real picture is even heavier. Part of the able-bodied population that no longer hopes to find work is completely out of the workforce. The combined level of unemployment and potential labour force reaches 38.7%. This is the potential that Georgia cannot use and there are citizens who are doomed to poverty.
Statistics also show that business, due to the instability in the world and in our region and the unpredictable future, not only can not grow jobs, but can not even restore the situation in 2019. It will take several more years to return to the same position. That is why it is important for the state to pursue an active labour market policy. Therefore, the employment program announced by the government for the socially vulnerable population is welcome. However, the 300 GEL salary is insufficient, which makes it difficult not only to support a family, but also to provide food for one person.
Rising unemployment has increased the absolute poverty rate from 19.5% to 21.3%. The level of income inequality is still particularly high (Gini coefficient 0.36). An important reason for this is the shortcomings of passive labour market policy, which is manifested in the complete or actual absence of such tools as: minimum wage, unemployment benefits, progressive income tax, etc. The result of such a policy is that economic growth does not equally affect the population and is mainly used by businesses and / or already high-income populations. This is only 10% of the population in the country.
Another important problem is the low participation of women in the labour force, as well as the large difference between the salaries of women and men. Compared to economically active men (62.9%), the share of active women is 22.4% lower and is only 40.5%. The pandemic has reduced the economic activity of women even more (by 2.6%) in the last 2 years, while the economic activity of men, on the contrary, has increased. One of the main reasons why women were excluded from the labour force was the increase in family affairs during the pandemic period, the shift to remote work and consequently, the dismissal of employees in families. As part of the companies still employ remote employment, women who previously worked as babysitters, caregivers, cooks and cleaners are still unemployed.
No less important problem for women’s low economic activity is the gender difference in the salaries of women and men. Despite some changes in the Labour Code, the gender pay gap still stands at 32.3%.
High informal employment also requires attention from the state. 31.7% of those working in the non-agricultural sector are informally employed. They are deprived of both the opportunity to enjoy the labour rights provided by the Labour Code and to participate in the pension system. It is important for the government to take steps towards the voluntary formalization of informal employment. This primarily involves improving enforcement in terms of labour protection and creating additional social protection guarantees that will be directly related to formal employment.
Creating new jobs should be a priority for the state. This is the main way for the country to reduce poverty in the population. To do this, in parallel with the creation of public jobs by the state, it is necessary to support the development of industry in areas that will replace most of the imported products for Georgia.
Another problem that has become particularly pressing in recent years is the increase in the general level of prices (inflation). The complex transportation costs caused by the pandemic have been compounded this year by a particularly painful topic for all of us – the war in Ukraine. Our friendly country, Ukraine, is one of the main trading partners for Georgia. Consequently, the replacement of goods imported from Ukraine will be associated with additional costs and will further increase prices.
Inflation stood at 13.7% in 2021, while the average wage in the country increased by only 12.2%. This is the first time in recent years that inflation has exceeded average wage growth. Which means that employees, as well as the entire population of the country, have even less disposable income today than last year. The 10.4% real growth of the economy could not be reflected not only in the disposition of the entire population, but even in the disposable income of its employed part. That is why one of the main tasks of the government is to distribute economic goods equally through the use of labour market policy, until the need arises for the provision of social assistance to the population found below the poverty line.
In such a crisis situation, the feeling of solidarity and justice in the society is of special importance. For this, the government needs to take the following steps:
- Ensuring a decent minimum wage for employees;
- Determining unemployment benefits;
- Reducing and eliminating the gap between women’s and men’s wages;
- Providing employees with decent working conditions and creating a safe working environment;
- Effective pension reform;
- Transition to progressive income tax;
- Reducing the level of unemployment through active labour market policies;
- Encourage collective bargaining and social dialogue and promote the establishment of a part of social culture;
Based on all the above, the Georgian Trade Unions Confederation addresses the Government of Georgia and the Government:
- Develop employment policies tailored to the existing challenges and promote its effective implementation in the country;
- Make vocational and dual education a priority;
- Develop an employee-centered social policy that encourages social dialogue and collective bargaining;
- Introduce unemployment benefits and promote harmonization of minimum wage regulation with international standards;
- Recognize labour safety as a fundamental right of labour;
- Determine decent remuneration for maternity leave;
- Develop a methodology for measuring the value of labour in order to reduce the gender pay gap;
- Ensure a safe and equitable environment in labour relations;
- The labour rights of informally employed persons should be protected in the same way as those of formally employed persons.
- Establish an 8-hour working day and a minimum wage of 125%.