The registered unemployment rate in September was 6% of the country's economically active population. These are more than 50 thousand people. The lowest September indicator was in 2019, when the unemployment rate fell below 6%. For the time being, it is difficult to predict how the vaccination obligation will affect future unemployment rates.
“We don't see any indications that would show that the new rules could somehow increase the ranks of the unemployed. What will be the situation in the future – I suppose we will see in the middle of November,” said Signe Bierande, spokeswoman for the State Employment Agency.
However, there will be some impact, according to economists. According to the head of “CV Online Latvia” Aivis Brodiņš, the requirement to vaccinate workers in the public and municipal sectors could stimulate the transition of these people to the private sector.
“Employers from the private sector – they can expect a higher number of applicants. At the same time, certainly there will be employers in the private sector who are probably already very high on this vaccination coverage. Then they will certainly only consider candidates who have been vaccinated,” Brodiņš said.
Some job advertisements on the Internet already include requirements for an interoperable Covid-19 certificate. Experts point out that finding enough employees with Covid-19 certificates could be difficult. The only way out of the current situation is to get the majority of Latvian residents to complete the vaccination course. Otherwise, the burden on the national social budget will increase.
“Part of these people will go to the unemployed, receive this benefit, which will once again be a burden on our tax system and which will again be a big expense on unemployment benefits,” Eva Selga, representative of the Latvian Personnel Management Association, said.
Apart from the likely increase in the unemployment rate, the obligation to vaccinate could lead to a situation in which the income of one part of the population will grow, while for others, mostly unvaccinated, incomes will fall.
“This can create a dual situation in the labor market where, on the one hand, we have a pronounced lack of workforce and, more likely, therefore, an increase in wages in one group of society and, on the other hand, higher unemployment and wage stagnation or even a decline in income for employees in another segment of the labour market,” Uldis Rutkaste, economist at the Bank of Latvia, said.