The unemployment rate in the Czech Republic jumped by more than half a percentage point in December to 8.6%, the highest rate since April of last year. The number of registered job-seekers also crossed the half-million mark to 508,451, according to information from the Ministry of Labour. Analysts contacted by the Czech Press Agency put the increase down to seasonal factors but estimate further rises in unemployment numbers over the coming months, as concerns over the fate of the eurozone continue on the financial markets.
More than 500,000 Czechs are currently out of work, with the rate of unemployment growing from 8 percent in November of last year to 8.6 percent in December. While a jump in unemployment figures is not unusual for this season, experts warn that the growing number of persons aged 50 and over who find themselves out of a job and with little chance of getting hired poses a serious long-term problem for the economy. Former finance minister and Raiffeisenbank’s chief economist Pavel Mertlík speaks about expected labor market developments for 2012.
Czech Prime Minister Petr Nečas, in a Sunday TV appearance, defended his government’s reform policies, stating that he opposition’s criticism of them is unjustified. The opposition Social Democrats had ample time to weigh in on the reforms; their recent challenge of the reform package in the Constitutional Court is merely an attempt to block the lower house’s work for several months, he said. He added that the changes in unemployment legislation had created a system that motivates persons without work to seek employment, citing figures that put the Czech Republic at the sixth-lowest unemployment rank within the EU. Mr. Nečas said that in the future, the country needed to further invest into research and innovation to remain competitive.
Up to 40 percent of Czech will live from pay day to pay day, creating no financial reserves from their salaries, suggests a new survey by the Ipsos Tambor agency released on Monday. Some 21 percent of people who took part in the poll said they considered their financial situation to be good, while 13 percent said they planned to save and invest. 8 percent of those polled said they would like to pay off their debts this year.
Analysts and trade organizations approached by the ČTK news agency predict that the unemployment rate in the Czech Republic next year might exceed ten percent. That is two percent more than official unemployment figures released by the Labour Ministry in November. The construction industry, employing some 400,000 people, is expected to be the worst affected. According to an optimistic scenario, suggested by most respondents, the average unemployment rate will be around nine percent, and only exceed the ten percent level in certain months. However, should the problems in the euro zone intensify, firms might effect more layoffs.
President Václav Klaus on Tuesday signed a series of bills related to the government’s tax reform. The new legislation introduces a joint collection authority where people will pay their taxes along with health and social insurance; it replaces the 15-percent income tax calculated from the so-called super-gross salary with a new 19-percent tax calculated from base salary; the bills also include an amendment to the Czech legislation on lotteries which gives local authorities more power in regulating gambling. The government’s tax reform is set to come into force in 2015; however, Finance Minister Miroslav Kalousek would like to amend it so that it comes into effect a year earlier.
For many people 2012 promises to be a tough year or at least one of big changes: a new survey by the Czech Chamber of Commerce has suggested that every fifth company in the Czech Republic is planning layoffs in reaction to the slowing economy – some letting go hundreds, while others will cuts jobs for dozens of employees.
Trade unions want to limit the opening hours of supermarkets over the Christmas and state holidays. They have also prepared a bill to prohibit or regulate the opening hours of store chains on holidays. Chairman of the store workers’ union Petr Voslař told journalists on Tuesday that the unions are looking for a legislator to bring the bill to Parliament. The bill entails that supermarkets would be able to be open until 2:00 p.m. on Christmas Eve and would have to remain closed over the Christmas holidays. They also want large shops to remain closed on Easter and November 17th.
Employment bureaus may begin issuing welfare cards between March and April, 2012, provided a contract is concluded with the bank Česká Spořitelna, which is to manage the cards. The Labour Ministry is still in negotiations with the bank. The cards are intended for the payment of most welfare benefits from the employment bureaus. The Labour Ministry expects to save a billion crowns in operational costs once they are introduced.
Companies in the Czech Republic that illegally employ foreigners will be fined up to five million crowns and will lose the right to public orders and state subsidies, under an amendment to the law approved by the Senate on Friday. The amendment aims to bring Czech law in line with EU directives. It obliges companies to report signing on foreigners from non-EU countries and to keep copies of the employees’ documents proving their legal workforce status. The bill is yet to be signed into law by the president.
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