Employment and Social Protection
For the majority of the population, living standards are determined by income. Regardless of the sources of this income - hired work or self-employment - the labour market directly affects the incomes of citizens, their stability and conditions of work of household members. The labour market plays a decisive role even in the life of those people who receive the main part of their income as pensions or money remittance from relatives.
The prevailing economic recession and the employment crisis in Ukraine is a complex combination of political, economic, social and psychological processes.
The recession of the 1990s did not adequately affect the quantity and structure of employment in Ukraine. According to the data of the Ministry of Statistics, in 1991-1996 registered employment in the formal sector of the economy (without those working personal land plots in agriculture) decreased only by 3.3 million people, i.e., by 13.4%, - from 24.7 million in 1990 to 21.4 million in 1996 - while the real GDP during this period dropped by 57.1%. Employment declined predominantly on account of the employable population which practically did not change during the said period (see Table 3.2). Employment of the working age population is constantly decreasing and in 1996 it was only 77.6%, i.e., 8% less than in 1990.
Such a situation developed because a considerable part of the employable population in the 1990s
was inefficiently used in production;
is employed in the informal sector;
is unemployed (have no or are seeking jobs);
are despondent (after lengthy and fruitless searches lost hope of finding a job and therefore gave up actively seeking it);
left the workforce (have no jobs and, owing to various reasons, don't want to work).
According to administrative statistical records of
enterprises, no fundamental positive changes in the sectoral structure
of employment have been achieved since the early 1990s (Table
3.1).
Table3.1.Employment by sectors in Ukraine, 1990-1996
| All sectors | |||
| Industry | |||
| Agriculture | |||
| Construction | |||
| Transport and communication | |||
| Trade and public catering | |||
| Public health, physical culture social insurance | |||
| Education, science, culture and arts | |||
| Housing and public utilities services, consumer services | |||
| Financing and crediting | |||
| General administration |
The surplus of labour continues to grow. First, the share of permanently employed goes down, and at the same time the share of people who have some income from time to time goes up. Second, the aggregate reserve of worked hours decreases owing to losses within shifts and working days. Third, there is a considerable increase in the number of those forced to be occupied part of the working day (week) or workers on unpaid administrative leave.
Part-Time Employment. Part-time Employment continued to grow throughout 1996 (see Table 3.2 )
In erly 1997 an incomplete working day (week) was
rouite for 1.2 million people, I.e., 4.6% of the economically
active population (a year earlier this indicator was 0.8 million
and 3.1% respectively, and in construction - 0.1 million or 11.6%
respectively.
Table 3.2. Forced part-time employment ( as % of the total employment)
| Total | 17.7 | 23.8 | 5.6 | 8.6 |
| Industry | 31.3 | 38.1 | 12.5 | 15.8 |
| Power engineering | 0.6 | 3.9 | 0.0 | 0.1 |
| Fuel industry | 2.7 | 6.3 | 0.1 | 0.4 |
| Ferrous metallurgy | 15.9 | 16.6 | 1.7 | 5.2 |
| Chemical and petrochemical | 30.8 | 36.9 | 11.8 | 16.5 |
| Mechanical engineering | 39.9 | 51.8 | 21.7 | 26.3 |
| Timber and woodworking | 41.1 | 49.3 | 14.3 | 20.9 |
| Industry of building materials | 47.6 | 59.8 | 9.3 | 16.2 |
| Light industry | 63.1 | 67.5 | 23.7 | 28.9 |
| Food industry | 36.0 | 41.0 | 9.3 | 10.9 |
| Agriculture | 12.0 | 13.7 | 1.3 | 2.1 |
| Transport | 21.9 | 40.3 | 2.8 | 16.1 |
| Construction | 30.0 | 41.9 | 5.3 | 11.6 |
| Trade | 9.6 | 10.5 | 3.0 | 3.7 |
| Consumer services | 8.0 | 10.0 | 2.5 | 2.3 |
The main characteristic of employment is the ability to produce income. Throughout 1996 real wages decreased by 14% and during the past fivi years the drop was fourfold. In spite of the fact thal there is a rise in the share of wages in GDP fron 28.7% in 1995 to 30.1% in 1996, its level is still far below that of the industrialized countries (50-60%) as well as that of Ukraine in 1990 - 46.7% (Figure 3.1.).
Figure 3.1
Growing unemployment means that the use of resources is unsatisfactory and incomes of the population decline. However, the social consequences from forced unemployment can be much more serious. According to a selective survey of households, the 0 number of unemployed in October 1996
had reached the 2.0 million figure, i.e., 7.6% of the economically active population aged from 15 to 70, which is considerably more than the year before -1.4 million and 5.6% respectively. The years 1996 and 1997 saw rapid growth of registered unemployed. In early 1996 only 127,000 unemployed (0.5% of the workforce) registered with employment agencies, but in June 1997 their number was already 521,000 (2.0%), i.e., a fourfold increase.
The number of applicants for vacancies is rapidly
growing: the ratio between registered unemployed and vacancies
increased from 0,5:1 in late 1992 to 10:1 in late 1996, and to
13:1 in June 1997.
Employment of the Population and Social Protection in 1996-1997
(data provided by the Kyiv City Department of Statistics)
The development of the labor force potential of Kyiv in 1996 was determined by the general socio-economic situation. In terms of further restructuring of the city's economic complex, formation of various ownership forms and wider involvement of market-related mechanisms, including formation of the market for labor force, the decrease in the number of people employed in the city's social production was unavoidable. In 1996, the number of people employed in the sectors of economic activity was 958,300 (96.7% of the level of 1995).
In 1996, the most significant decrease in the number of citizens employed was observed in the sector of material production, though it should be noted that the rate of increment of unemployment lowered to some extent relative to the previous years. The largest decrease in the number of labor force employed occurred in industrial production, this sector employed 238,200 in 1996, which is down 17,500 compared to 1995. The number of industrial-production personnel decreased in the majority of sectors of industry in 1996. The most significant decrease (16%) occurred in machine building and metal works. The only one sector where the number of industrial-production personnel did not change during 1996 was the food industry.
In general, there was a trend in the intra-structural development of sectors towards a decrease in the share of labor force employed in material production and an increase in the share of labor force employed in non-material production.
Among the labor indices, such indices as fluctuation movement of personnel engaged in the sectors of economic activity and losses of working hours were high in 1996. Specifically, losses in working hours were as high as 20,494,000 man-days in 1996. Despite some decrease in the rate of fluctuation movement of personnel in 1996 (14.8% in industry; 17.2% in construction) compared to 1995, it was significantly higher as against previous years. The rate of personnel working in adverse labor conditions was also high. In 1996, 391,600 employees worked in adverse labor conditions, mainly in industry and transport.
Further liberalization of the economy directly effects the development and functioning of the labor market. In 1996, Kyiv's labor market developed in terms of a decreased level of employment of economically active population and increased unemployment. These factors caused an increase in the number of people applied to the employment bureau. Specifically, in 1995 this number was 14,800; in 1996, it increased to 22,800.
The number of the unemployed placed in jobs by employment bureau was 6,000, this is 23.9% of the overall number of those applied for job-finding. In 1997, the number of citizens not employed in labor activity who applied to employment bureau was 26,100. Out of this number, 17,400 were granted the status of an unemployed. The level of unemployment in Kyiv was 0.5% (in Ukraine as a whole this index was 2.3%) in December 1997.
The issue of hidden unemployment is very pressing. In connection with this, the Kyiv State Administration undertakes a set of actions to inform the population and employers on the state of the labor market, demand and supply of labor force. The Kyiv State Administration established the Employment Promotion Committee.
In 1997, nominal wages per full-day employee were 214.2 UAH, which is 20.8% up compared to the level of 1996.
The highest were the levels of wages (1.6-2.7 as high as the average level) earned by citizens engaged in air transport (360.7 UAH), communications (416.5 UAH), and banking establishments (583.3 UAH).
The lowest wages were received by employees engaged in public catering (117.1 UAH), production-associated kinds of consumer services (138.3 UAH), health care (139.4 UAH), social security (142.9 UAH), culture (154.3 UAH), and education (159.0 UAH).
In 1997, 528,400 families applied to bodies granting
subsidies for rent and utilities bills; out of this number, 519,700
families (98.3%) were granted subsidies. The overall amount of
subsidies was 109.8 million UAH.