Unemployment in the fourth quarter of 2016 fell to 3.6 percent, the lowest ever in Czech history, the Czech Statistics Office reported on Thursday. There has also been a significant drop in the number of people who have been out of work for longer than a year. Labour offices registered 192, 500 unemployed at the end of 2016, with a slight prevalence of women (101, 900). Economic experts say the drop in unemployment and the lack of skilled workers on the labour market will bring about further wage growth.
Home is, as the saying goes, where the heart is and for most Czechs the heart does appear to be reluctant to move too far. Labour mobility is a weak point of the Czech economy and government incentive for people to uproot and move to where jobs are appear for the moment to have been cold shouldered.
Employers have criticized Interior Minister Milan Chovanec for advocating a tough line with foreign workers who violate the law. In an interview for the daily Pravo, the minister said a foreign worker who violated the law should be sacked on the spot and should be banned from working in the country thereafter. Marketa Schormova, a legal expert for the Czech Business Chamber says this practice would be in violation of the Labor Code, since employers can only fire an employee who has been found guilty of intentionally breaking the law. Minister Chovanec based his proposal on statistics that suggest a growing number of foreign workers, predominantly from Poland and Ukraine, had in recent months committed petty crime or broken the law in some way. The Czech Business Chamber has stressed the country badly needs foreign workers and their lack could be a brake for future economic growth.
The Czech labour authorities caught more foreigners than Czechs working illegally for the first time ever last year, iDnes.cz reported on Wednesday. While 1,338 non-nationals were uncovered working off the books in 2016, the number of Czechs was 758. The previous year the figures were the other way around, iDnes said. The highest number of undocumented foreign employees came from Ukraine, Vietnam, Slovakia and Moldova. Fines totalling CZK 71 million were imposed on employers using illegal workers last year.
Representatives of leading Czech firms have put economic growth in 2017 at between 2.5 and 3.1 percent, according to the ctk news agency which conducted a poll among employers. According to employers, growth should be fueled by the drawing of EU structural funds, but could be undermined by a lack of qualified workers. The Czech National Bank predicts a growth of 2.9 this year and 2.8 in 2018.
Revolutions promise change, the only problem being that the promised changes don’t always go to plan and rapid transformation often throws up its own batch of winners and losers. It’s not surprising then that the so-called fourth industrial revolution – which basically amounts to the introduction of more automation and digital technology to the manufacturing process has sown its own batch of fears and concerns.
In times of boom and for selected fields of employment the Czech Republic has frequently looked East to supplement its labour force. A decade or two ago, the target was Slovak nurses and doctors. Now, there’s a system in place offering a supposedly fast track recruitment system for Ukrainians seeking skilled and not so skilled job for large parts of Czech industry. But the system has been beset by problems and there have been disagreements about how to go forward.
The unemployment rate in the Czech Republic grew slightly in December, rising to 5.2 percent from 4.9 percent the previous month. Officials from the Office of Labour said on Monday that the development was typical of the end of the year, when seasonal work ends, and that the figure was still the best recorded for December since 2008. The number of people out of work last month was just over 381,000.
The coming 12 months look fairly positive for the Czech economy with growth still expected to be strong and some room seen for unemployment to slide even further. But the big headline event for 2017 is likely to be the exit from the low crown regime that’s been in place for just over three years now. The move itself and the way it is handled will have a major impact on trade, investment, growth and jobs.