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Levan Ioseliani: “What did the employment law actually change? The unemployment rate has beenrising in the last three years.”

Verdict: FactCheck concludes that Levan Ioseliani’s statement is a MANIPULATION.

Resume: The unemployment rate in Georgia increased amid the pandemic (in 2020 and in the first quarter of 2021). As compared to 2019, the unemployment rate increased by 0.9 of a percentage point in 2020 and reached 18.5%. In the first quarter of 2021, the unemployment rate increased by 3.7 percentage points as compared to the first quarter of 2020 and stands at 21.9%. Levan Ioseliani refers to the figures for 2020 and the first quarter of 2021 in his statement which obviously does not comprise a three-year period.

The Parliament of Georgia adopted the Law on the Promotion of Employment in July 2020. To evaluate the efficacy of the law based on the unemployment figures of 2020 and the first quarter of 2021 is a manipulation since the growth of the unemployment rate is directly linked with the pandemic and pandemic-related stringent economic restrictions. The law’s efficacy can be assessed in the long-run and not amid the pandemic when job losses constitute a global challenge.

Analysis

On 25 June 2021, at the plenary session of the Parliament of Georgia, Levan Ioseliani, MP, stated: “What did the employment law, adopted in 2020, actually change? If we take a look at the statistics, the unemployment rate has been rising for the last three years. It was 17.6% in 2019 and 18.5% in 2020 whilst this year it is 21.9%. Why do we adopt laws if they have no effect on employment?”

Of initial mention is that Levan Ioseliani is in fact referring to the growth of the unemployment rate amid the pandemic (in 2020 and the first quarter of 2021) which contradicts his own claim that the “unemployment rate has been rising for the last three years.”

The Parliament of Georgia adopted the Law on the Promotion of Employment in July 2020. At this stage, it is early to assess the impact of the law vis-à-vis changes in unemployment, especially given the ongoing pandemic. Job loss was side effect of the pandemic both in Georgia and worldwide.

According to the data of the National Statistics Office of Georgia, the unemployment rate increased by 0.9 of a percentage point in 2020 as compared to 2019 and reached 18.5%. The unemployment rate increased most sharply in the last quarter of 2020 and the first quarter of 2021. In the fourth quarter of 2020, the unemployment rate reached 20.4% which is 3.8 percentage points more as compared to the unemployment figure from the same period of the past year. In the first quarter of 2021, the unemployment rate increased by 3.7 percentage points as compared to the first quarter of 2020 and stands at 21.9%. The aforementioned growth in the unemployment rate was stipulated by the pandemic and stringent economic restrictions.

Graph 1: Unemployment Rate in 2019-2021 (Quarterly Figures)

Source: National Statistics Office of Georgia

Of note is that the unemployment rate (percentage figure) has been shrinking annually in the past years. However, it was largely stipulated by the drop in the numbers of the economically active population. In other words, some unemployed individuals ended up outside of the workforce and as a result, the unemployment rate decreased without actually increasing employment. In 2016-2019, the unemployment rate decreased from 21.9% to 17.6% at the expense of the shrinking economically active population. In that period, the workforce decreased by 102,800 whilst the number of employed people contracted by 12,600.


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