Unemployment Specifics in Georgia
Georgia’s unemployment rate is artificially low and may be disguising considerable levels of hidden unemployment for several reasons. First, as has been argued throughout, in line with international standards, the LABOR Force Survey classifies as employed all persons working for one hour or more during the reference week. In rural areas, this means that anyone owning a plot of land, however small, and spending at least one hour cultivating it during the reference week will be considered self-employed. This is regardless of the fact that the income may be below the minimum subsistence level and that he or she may be looking for another job. Moreover, the Law on Employment stipulates that all rural dwellers and their families, who own 1 hectare or more of land are automatically considered self-employed, essentially depriving the rural population of the right to be considered unemployed.
Secondly, as previously discussed, these figures disguise hidden unemployment, in the form of workers on leave without pay, shortened working hours and wage arrears. Read more
Labor Markets, Social Security and Poverty
With the collapse of the centrally planned system in the beginning of the 1990s, came the collapse of the enterprise-based system of social benefits. Over the past few years, the Government has been attempting to introduce a universal benefit system, financed by tax revenue, but has been facing extreme financial difficulties as a result of low tax compliance, institutional weakness and corruption. In the absence of social security, the LABOR market has become the only provider of livelihoods for the majority of the population, and particularly for the most vulnerable. The current social security system has three main components: the state social allowance, the unemployment benefit and the pay-as-you-go pension system.
The State Social Allowance was introduced in the beginning of 1998 to replace the family allowance. Whereas the family allowance had a wider coverage of vulnerable groups, the State Social Allowance only targets households comprised of non-working pensioners without a legal breadwinner. Read more
