Resume:
According to the 2019 data of the National Statistics Office of Georgia, the workforce declined by 93,300 as compared to 2012. A workforce is the economically active population; that is, the total sum of employed people and those looking for a job. Since 2016, the workforce has been declining annually and dropped by 106,800 in 2016-2019. The workforce decline is a flat-out negative fact and the main reason behind it is the so-called “discouraged worker.” These are people who as a result of a long and unsuccessful job search either cease looking for a job or become economically inactive, ending up outside of the workforce.
Of note is that since 2016, the unemployment rate has been decreasing only at the expense of the declining workforce, not as a result of job growth. Since 2016, the number of employed people has been decreasing annually and the number of employees shrank by 43,600 in 2016-2019.
Analysis
The leader of the political platform, Strategy Builder, Giorgi Vashadze, on air on the talk show, Barrieri, stated: “The country’s workforce has declined by 100,000.”
A workforce comprises economically active people; that is, the total amount of employed people and those who are looking for a job. In accordance with the methodology of the National Statistics Office of Georgia, if a person stops looking for a job, he ends up outside of the workforce and is no longer considered as unemployed. These are the so-called “discouraged workers” who no longer seek employment and are withdrawn from the workforce although they are not employed.
The unemployment rate is measured by the unemployment people to workforce ratio.
According to the data of the National Statistics Office of Georgia, economically active people; that is, the total sum of employed people and those looking for a job has been declining annually since 2016. In 2016-2019, the workforce decreased by 106,800 whilst it declined by 93,300 as compared to 2012. Of note is that since 2016, the number of employed people has also been decreasing annually and the number of employees shrank by 43,600 in 2016-2019.
Graph 1: Employment/Unemployment Statistics in 2012-2019
Source: National Statistics Office of Georgia
Under the Georgian Dream’s rule, the unemployment rate has been decreasing annually. In 2016-2019, the unemployment rate decreased for a technical reason – because of the “declining” number of unemployed people and not actual job growth. However, a dropping unemployment rate would be a positive thing if only it is achieved through employment growth.
