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Levan Davitashvili: “According to the data of the third quarter, the unemployment rate dropped to a historic low of 15.6%. This is a better figure as compared to what we had prior to the pandemic.”

Verdict: FactCheck concludes that Levan Davitashvili’s statement is TRUE.

Resume:

According to the National Statistics Office of Georgia, the number of employed people in the third quarter of 2022 exceeds the employment figures in the previous periods. As reported by the National Statistics Office of Georgia, some 1,358,600 people were employed in the third quarter of 2022 which is 6% and 3.6% higher as compared to the third quarter of 2021 and 2019, respectively. The number of the workforce is also its highest except for the third quarter 2018. As compared to the third quarter of 2021, the unemployment rate dropped by 3.9 percentage points whilst it decreased by 1.2 percentage points as compared to the pre-pandemic third quarter of 2019.

Taking the available statistics into consideration, the unemployment rate indeed stands at its lowest. The reduction of the unemployment rate in light of the growth of the workforce and the number of employees is a positive fact and, therefore, the Minister’s statement is TRUE.

Analysis:

The Minister of Economy and Sustainable Development of Georgia, Levan Davitashvili, speaking about employment statistics, made the following statement: ““According to the data of the third quarter, the unemployment rate dropped to a historic low of 15.6%. This is a better figure as compared to what we had prior to the pandemic.”

According to the methodology of the National Statistics Office of Georgia, the unemployment rate is measured by the unemployed people to the economically active population (workforce) ratio. The workforce is the total sum of employed and unemployed (who are looking for a job) people. Of additional note is that an individual who does not work and at the same time is not looking for a job (was not seeking employment in the four weeks prior to the survey) drops out of the workforce and is no longer considered unemployed. Therefore, a technical reduction of the unemployment rate is possible in certain cases at the expense of the shrinking workforce and no actual increase in employment. Therefore, an analysis of the workforce and the employment parameters is vital for an accurate assessment of unemployment in a country.

According to the data of the third quarter of 2022, the unemployment rate was 15.6% which is indeed the lowest figure according to the available data. The National Statistics Office of Georgia has been publishing quarterly employment statistics since 2018. Generally, a comparison of employment figures is relevant in the case of one and the same quarters because the seasonal factor plays a big role in the total statistics. As compared to the third quarter of 2021, the unemployment rate decreased by 3.9 percentage points whilst it shrank by 1.2 percentage points as compared to the pre-pandemic third quarter of 2019 which is a positive fact.

In the past, FactCheck verified statements which had included claims about the reduction of the unemployment rate. However, this was not caused by the growth in the number of employed people but by a shrinking workforce. In other words, some working-age people being outside of the workforce could be explained by the growth of the ranks of the so-called “discouraged workers.” This term denotes a state when a working-age person was looking for a job for a long time but was unsuccessful and eventually stops job-hunting.

In this case and as a part of the available statistics, the employment figure is indeed at a historic high. In particular, 1,358,600 people were employed in the third quarter of 2022 which is 6% and 3.6% higher as compared to the third quarter of 2021 and 2019, respectively. With the exception of the third quarter of 2018, the workforce figure was also at its highest. Therefore, under these circumstances the decrease of the unemployment rate is a positive fact.

Graph 1: Workforce Figures (Quarterly) in 2018-2022

Source: National Statistics Office of Georgia