Labor pains in Central Europe

Pay the Czechs

Not being a direct neighbor of the war-torn country, Czechia has seen fewer Ukrainian refugees arriving than its neighbors. However, given the large Ukrainian diaspora in the country, it is assumed that more people plan to stay around than in Hungary or Slovakia.

The Minister of the Interior noted in mid-May that Prague had granted protection to more than 350,000 Ukrainian refugees. Statistics from the country’s Labor Office around the same time showed that more than 50,000 people had taken up employment.

This cohort of new arrivals joined the approximately 200,000 of their compatriots who were already employed in the Czech Republic at the end of 2021, mainly in the major sectors of manufacturing, industry, mining, construction, transport and services. But despite importing such numbers, the economy remains blighted by labor shortages.

While the refugees appear to be helping to relieve some pressure on the tight labor market, unemployment, which fell in March and April, remains the lowest in the EU at 2.3%, according to Eurostat, as it l it’s been a few years now.

Karina Koubelkova, an analyst at the Czech Chamber of Commerce, reports that following a lull due to the pandemic, the difficulty of finding enough skilled workers has quickly returned as the biggest obstacle to growth for a majority of companies. businesses.

The resulting rise in wages is helping to fuel the inflation spiral, which jumped to over 14% in April.

The Ministry of Finance has expressed hope that those fleeing the war will help plug the holes. “On the one hand, the influx of refugees from Ukraine could ease labor market imbalance and weaken pressure on wage growth,” he said in a forecast for 2022.

Indeed, data from the Labor Office suggests that some of the neediest sectors are already benefiting. Accommodation and food services have found recruitment extremely challenging following the COVID-19 pandemic lockdowns. But the arrival of hundreds of thousands of women, mostly with children, seems to be helping to fill many of these jobs,

By contrast, these newcomers’ childcare responsibilities and short-term staycation expectations mean other industries that desperately need it, such as IT, don’t see much benefit, said the Labor Office, qualified refugees choosing less. qualified jobs in order to remain more flexible.

But even if the Ukrainian refugees manage to make up for the Czech labor shortage, there is no guarantee that this effort will be universally welcomed. Polls suggest Prime Minister Petr Fiala and his government could risk a backlash if the refugees drag on too long.

Certainly, while the outrage and horror of the Russian invasion has produced strong support among the general population to offer shelter, fatigue is likely to largely emerge as the war drags on and the economy slows.

Polls already show that only 20% of Czechs would be happy for Ukrainian refugees to stay in the country long term, and the Finance Ministry is well aware of the threat. He warns that “the failure of integration [of Ukrainian refugees] could pose a significant social problem in the future.

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