The position of the Czech labour market in the EU - 2nd quarter 2009

a) Employment

In the EU the Czech Republic belongs to the countries with employment intensity which is above the average. The latest data released by Eurostat for Q2 2009 say that the employment rate for the 15-64 age group is higher in the Czech Republic than the total for the EU27. However, female employment rate is in the Czech Republic notably below the EU27 average while the male employment is markedly higher. Employment rate for the 15-64 age group was in the Czech Republic 65.4% (males 73.9%, females 56.7%), for the whole EU the rate was 64.8% (males 70.9% and females 58.8%).
Concrete aims for employment rate in the EU countries until 2010 were determined in the meetings of the European Council in Lisbon in 2000 and Stockholm in 2001. The total employment rate should reach at least 70%, female employment rate at least 60% and elderly employment rate (age group 55-64) at least 50%.

There are considerable differences in employment rates between EU countries, not only in terms of the wide age group 15-64, but also the male and female employment components. On the one hand, there is a high employment rate in the northern countries, the Netherlands and the United Kingdom (e.g. 77% in the Netherlands in Q2 2009); on the other hand, employment rate in some of the countries was deeply below 60% (e.g. 55.6% in Hungary in Q2 2009). Comparing neighbouring countries to the Czech Republic, higher employment rates in the long term are in Austria and Germany and significantly lower in Poland and Slovakia.
Even bigger differences are in the employment rates of persons aged 55-64. In Poland, Hungary, Italy, Belgium and Malta it was slightly above 30%. These and some other states will thus have difficulty fulfilling the Lisbon strategy. In contrast, eleven member states have already exceeded the required 50% rate; all the northern and Baltic countries are among them. Although according to results of international comparison results the total employment is falling, the age group 15-64 does not contribute to such trend. In the long-term perspective it can be assumed that the number of countries exceeding the required 50% rate will grow. In the Czech Republic, the employment rate among people aged 55-64 shows no changes now and so far it is below the required level reaching 47.4%. Owing to the increasing retirement age limit employment rate of women in this age group is expected to grow.

Data on employment rate show significant changes in the European labour market. In prevailing majority of countries the contribution of employed persons to the total volume of the population in the productive age dropped markedly. In EU27 the employment rate of persons aged 55-64 dropped, y-o-y, by 1.2 percentage point. An exceptional big decrease of employment recorded all three Baltic countries, i.e. Latvia, Lithuania and Estonia, also Spain and Ireland. Among these countries an exceptionally big drop of employment (-10.6 p.p.) of the age group 15-64 was reported for Latvia which is struggling with the crisis. Drop of employment was more significant for men than for women population when e.g. in Lithuania, Latvia and Hungary almost 40% of men of the age group 15-64 was unemployed and in many countries the share of unemployed men of the productive age was around 30%.

A dramatic y-o-y decrease of total employment did not show, however, in all groups of productive age. Employment rate of elderly workers in EU27 even increased on average, and especially among women, so that in the whole group of persons aged 55-64 employment increased by 0.6 p.p. to reach 46.4%. The drop of total employment rate showed in the youngest groups of people owing, among other things, to the increasing of share of people preparing for their future job and also due to the growing number of younger persons who failed to find a permanent job after finishing their studies or who lost their jobs. Job loss was often reported for persons of mid-productive age.


b) Unemployment

The general unemployment rate in the Czech Republic is still lower in comparison to all EU member states on average; in the Czech Republic the male and female unemployment rates are relatively low and below the average, respectively. The unemployment rate of the age group 15-64 was 8.9% in the whole EU in Q2 2009, however, in the Czech Republic only 6.4%. Compared to the neighbouring countries, the unemployment rate is lower only in Austria but in Slovakia it is markedly higher even though Slovakia does not belong any more to the countries with the highest unemployment rates across the EU. A considerably higher rate is recorded in Poland, too. Unemployment rate in the Czech Republic is noticeably lower than in Germany mainly due to the long-term unfavourable situation in the new Länder.

Like in Q1 2009 in Q2 the unemployment rate increased, y-o-y, in all EU member states. Very serious situation is reported mainly for Baltic countries, Spain and Ireland, i.e. countries where a slump of total employment rate (share of the number of workers in the total population in productive age in separate countries) was recorded.

Male unemployment grew faster to reach in Q2 2009 8.9% among age group 15-64 compared to female employment of age group 15-64 (8.8%). The unemployment rates are affected by the number of economically inactive persons, which is usually bigger among women. However, despite of the above, the economic downturn showed more markedly in industries and professions performed mostly by men. The male unemployment rate as the ratio of unemployed persons to the labour force (i.e. the sum of unemployed and all employed men) exceeded in more than half of EU member states the unemployment rate of women.
Given the growing unemployment it seems to be a paradox when another structural indicator of Eurostat, i.e. the share of long-term unemployed (for 1 year and more) in the total unemployment improved markedly. For the total of member states the indicator dropped by 6.6 p.p., y-o-y to 32.3% in Q2 2009. Unless important changes in the labour market occur, it can be expected that the long-term unemployment will resume the level reached in 2008. Moreover, the biggest drop of the indicator was recorded in two countries, so far showing the highest values – in the Czech Republic and in Slovakia due to obvious following reasons:

• increasing number of young people who after finishing of their studies have not succeeded to find their first job
• especially due to dismissals by the end of 2008 and in 2009 – as a response of many companies and organisations to their troublesome economic situation
• some long-term unemployed have moved to the group of economically inactive persons or found their jobs

Published: 04.11.2009
The data are valid as of the release date of the publication.