“Instead of new jobs being created, 42,000 jobs have been lost in just three months.”
On 11 September 2013 Davit Bakradze, the presidential candidate of the United National Movement, met with members of the local population in Zugdidi. In the course of the meeting Bakradze spoke with regard to the unfulfilled promises of the government: “We’ve been observing the actions of the current government with patience for a year, now, and we see that instead of new jobs being created, 42,000 jobs have been lost in just three months.”
FactCheckdecided to check the accuracy of the presidential candidate’s statement.
Apparently, in his statement, Davit Bakradze was referring to the first three months of 2013 and to the data for that period published by the National Statistics Office of Georgia according to which in the first three months of 2013 (first quarter) the number of people employed in the business sector decreased by 42,100 as compared to the fourth quarter of 2012.
Following the publication of the abovementioned statistics (statistical data was made public on 4 June 2013), the United National Movement has been strongly criticising the economic policy of the current government and, along with other arguments, based its criticism upon the abovementioned statistical data (see link Rustavi2). The issue of job cuts has been voiced on multiple occasions at the Parliamentary sessions and one of those statements has even been checked by FactCheck (see link). As noted above, on 4 June 2013 the National Statistics Office of Georgia published statistical datafor the first quarter of the current year depicting the situation in the business sector.
According to GeoStat, in the fourth quarter of 2012 the number of employees in the business sector amounted to 527,800 while in the first quarter of 2013 the number was at 485,700. As can be seen, the amount of jobs in the business sector has indeed decreased by 42,100. Zaza Chelidze, Executive Director of GeoStat, asserts, however, that a comparison between first and fourth quarters gives way to inaccurate interpretations and is thus not recommended. Chelidze further explains that the numbers of the first quarter tend to be lower than those from the fourth. This tendency is caused by seasonal specifications as in the fourth quarter the business sector reaches its peak in the agricultural, service and construction sectors. Similar levels of business activity are not present at the beginning of the year during the first quarter.
FactCheckexamined the matter thoroughly by studying European and American sources and found that a comparison of the first and fourth quarters is possible only in the case of making seasonal adjustments to the data. It is to be noted that GeoStat has no methodology of seasonal adjustment worked out and so only parallel quarters of different years can be compared to each other which renders impossible a comparison of any other quarters.
Weighing the first quarters of 2012 and 2013 against each other, we see that the number of people employed in the business sector has not dropped but increased by 15,700.
The total number of people employed in the business sector represents the sum of the indicators from seventeen different fields. A significant drop was observed only in one of those fields – construction business. In the first quarter of 2013, 40,863 people were employed in the construction field, which is 6119 less than in the first quarter of 2012. This drop in the construction field, however, is redeemed by an increase observed in other fields (manufacturing, trade, hotels and restaurants, real estate operations, education, health care and so forth) and on the whole, in the first quarter of 2013, we witness an increase of employment by 15 700 as compared to the first quarter of 2012.
Davit Bakradze’s statement limited the time interval of our research to the first quarter of 2013 but it could be of interest to also present the data for the second quarter of 2013 which was published by GeoStat on 3 September. If we compare these numbers to the relevant figures of the second quarter of 2012, no decrease is observed here either; on the contrary, we can see a slight increase in the figures. In the second quarter of 2012 the number of persons employed in the business sector amounted to 503,100 while in the relevant period of the current year the number was at 503,500.
Conclusion
In the course of verifying Davit Bakradze’s statement we found that the number of people employed in the business sector in the first quarter of 2013 dropped by 42,100 as compared to the relevant period of 2012. Our research, however, revealed that the comparison of the first and fourth quarters gives inaccurate results if the data is not seasonally adjusted (GeoStat has no methodology of seasonal adjustment). This comparison is evermore unreliable as the comparison of the parallel quarters reveals an increase in the number of employment.
Considering the circumstances uncovered by our research, we can assert that the presidential candidate’s statement is inaccurate. Despite this fact, we do not rate Davit Bakradze’s statement with our gradation “False” as we take into account the following factors: Even though we cannot compare the first quarter to the fourth, the question still remains - Can we assume that the decrease by 42,100 (the figure is correctly indicated by the candidate) is solely related to seasonal specifications and no long-term job cuts are present? Statistical data does not provide definite answers to this question. Naturally, seasonal decrease in employment has taken place but we cannot discard the possibility of a real decrease of employment. This possibility gains in strength due to various economic conditions. Real GDP growth rate in the first quarter of 2013 was 2.4% whereas in the same period of the last year the same indicator was at 6.7%. A drastic decline in the GDP growth rate is apparent. Apart from this, a decrease was registered in the turnover growth rate of VAT paying companies. In all likelihood, the economic circumstances described above would have relevant effects upon the employment rates in the business sector. Bearing these circumstances in mind we conclude that Davit Bakradze’s statement, “Instead of new jobs being created, 42,000 jobs have been lost in just three months,” is MOSTLY FALSE.
