Government of Georgia: “The number of unemployed people in Georgia is at a historic low.”

Verdict: FactCheck concludes that the Government of Georgia’s statement is HALF TRUE.

Resume: Unemployment and employment figures in Georgia sharply improved in 2022 as compared to the pandemic years (2020-2021).

Both the workforce and the number of employed people increased in 2022 as compared to the pandemic years (2020-2021), although they worsened when compared to 201Although the number of employed people and the employment level in the country is not at a historic high, the number of registered unemployed people and the unemployment level are at a historic low as of the data for 2022. This is attributable to the fact that many unemployed individuals withdrew from the workforce – they either ceased looking for a job or left the country.

It is true that employment and workforce parameters sharply improved in 2022. However, the claim that the unemployment rate is at a historic low does not reflect an objective reality.

The unemployment and employment figures in the statement released by the Government of Georgia are accurate, although the statement exaggerates the reality and disregards the fact that there is a workforce drainage. Therefore, FactCheck concludes that the Government of Georgia’s statement is HALF TRUE.

Analysis

The Government of Georgia made a publication in social networks: “In 2022, the unemployment rate decreased to a historic low of 17.3%. The unemployment rate increased sharply and equals 42.9%.” The publication also indicates that the workforce in Georgia has been growing.

In line with a request from a reader, FactCheck verified the statement released by the Government of Georgia.

Workforce statistics in Georgia are compiled by the National Statistics Office of Georgia which is based on the International Labour Organisation’s (ILO) methodology. The unemployment rate is measured by the unemployed people to the economically active population (workforce) ratio. The workforce is the total sum of employed and unemployed (who are looking for a job) people. According to the National Statistics Office of Georgia’s methodology, an individual who does not work but at the same time is not looking for a job (was not seeking employment in the four weeks prior to the survey) drops out of the workforce and is no longer considered unemployed. Therefore, in certain cases a technical reduction of the unemployment rate is possible at the expense of the shrinking workforce and without actually increased employment. Therefore, an analysis of the workforce and the employment parameters is vital for an accurate assessment of unemployment in a country.

According to the National Statistics Office of Georgia, the unemployment rate in Georgia decreased by 3.4 percentage points in 2022 as compared to 2021 and amounted to 17.3%. In a one-year period, the economically active population increased by nearly 1.1% (18,000) and reached 1,551,600. In 2022, the employment rate increased by 2.5 percentage points and reached 42.9%. As compared to 2021, the number of employed people in the total increased by nearly 66,300 (5.5%) and reached 1,283,700. Of note is that the share of hired employees in the total employment is 67.9%. In 2022, the share of hired employees decreased slightly by 0.3 of a percentage point whilst the share of self-employed people increased proportionally (by 0.3 of a percentage point).

The reduction of the unemployment rate last year was precipitated by a growth in the number of employed people which is definitely a positive occurrence. However, the impressive improvement of the employment/unemployment parameters was precipitated by the fact that data are compared with 2021 when the number of employed people in the country sharply dropped and the unemployment rate swelled because of the pandemic-related economic conditions.

According to 2022’s data, the unemployment rate dropped even as compared to the pre-pandemic period. However, employment and workforce figures are better as compared to the pandemic years (2020-2021) whilst they are in fact worse when compared to 2015-2019.

Graph 1: Employment and Unemployment, 2015-2022

Source: National Statistics Office of Georgia

There was indeed a lower unemployment rate registered in the country in 2022. This is precipitated by the fact that Georgia’s economically active population decreased in the long-term period or, in other words, many people ceased to look for a job or left the country.

Since 2015, the workforce (the total sum of employed and unemployed people) has been declining annually. In 2022, the workforce increased only as compared to 2020-2021 whilst it is still low as compared to 2015-2019. In 2015-2022, the economically active population decreased by 124,000 people (7.4%) in total.

In regard to the number of those employed, there were more people employed in Georgia in 2015-2019 as compared to 2022. In 2022, the employment rate (the share of employed people in the respective age group [15+] of the population) increased as compared to 2020-2021. It is also slightly above (by 0.2 of a percentage point) the pre-pandemic figure which is attributable to the reduction of 15+ age people in Georgia which certainly cannot be considered as something positive. The highest employment rate in Georgia was registered in 2015-2016.


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