Unemployment rate remains low thanks to labor market measures

Unemployment rate remains low thanks to labor market measures

Vakıf Katılım

In April, the unemployment rate in Turkey was realized as 12.8% compared to same month last year’s 13%. Compared to the previous month, it is seen that the unadjusted unemployment rate decreased by 0.4 points. The seasonally adjusted unemployment rate decreased, by 0.1 points compared to the same month of the previous year and increased by 0.7 points compared to the previous month, was announced as 13.8%. According to the adjusted data, the unemployment rate in the young population was 26.6%; Non-agricultural unemployment was 16.1%.

 

When we look at the comparable periods of April 2019 - April 2020, it is seen that the participation rate in the labor force decreased by 5.7 points with the adjusted data. The labor force, which was 32 million 612 thousand people in the similar period of 2019, became 29 million 620 thousand people in April 2020. The labor force participation rate fell from 53.2% to 47.5%. When we look at the seasonally adjusted data; while the employment rate decreased by 4.8 points compared to the same period of the previous year and became 41%, there is a decrease of 968 thousand people in seasonally adjusted employment compared to the previous month. In this period, seasonally adjusted employment by economic activity decreased by 34 thousand people in the agricultural sector, 164 thousand people in the industrial sector, 123 thousand people in the construction sector, 647 thousand people in the service sector.

 

The difference between those who are officially unemployed and those who do not work is evident, as many people are currently on unpaid leave and practically not working. Since the end of March, with the help of measures such as short-time working allowance support, dismissal ban, unpaid leave support; unemployment will not show a dramatic increase during the period when incentives are in effect. On the other hand, since the number of employees benefiting from these employment supports is more than 4.5 million, there is a risk of employment loss in terms of the labor market especially in relation to the post-incentives period. While leading indicators such as industry data and credit demand point to recovery after the April period, when the pandemic has the worst shock effects, the sustainability of normalization is important for the economy to move from the contraction position to at least the slowing position.

 

As of the end of June, we see that the supports such as short-time work allowance and prohibition of layoff have been extended for another month. Additional extension of the duration of the incentives, if needed, will leave the real impact on the labor market to be seen later. Even after the pandemic period, companies will remain slower than before in terms of creating new investments and jobs. This may limit labor force participation and opening new job positions. This will mean that the unemployment rate will remain high throughout 2020.

Source: Tera Menkul
Hibya News Agency