Long term unemployment is one of the most important issues in Slovak Republic. Latest surveys show that in January 2011 unemployment reached its six year maximum of 12.98 percent. The last time country had worse results was in February 2005 according to Slovak Ministry of Social Affairs, Work and Family. As usual the highest rate of unemployment was in the east of the country and lowest was in capital city, Bratislava.
Rising level of unemployment is one of the highest in European Union and it is the most significant problem caused by economic downturn in 2008. In 2008 unemployment was at 8 percent, but later in that year jumped to 12 percent. In addition to lay-offs in private companies, government had also let go many workers because of economy measures. In next few month government is planning to let go even more people from three public companies.
The main reason way long-term unemployment is still high is that many people prefer to receive social benefits instead of working. The difference between minimal wage and social benefits is minimal. The country is counting on Europe 2020 strategy to help overcome this problem. One year old Slovak government has two main concerns: increase a motivation to work and fight long-term unemployment. Currently, more than 400,000 Slovak citizens are out of work. As in other Eastern European countries, the employment rate in Slovakia depends more on job creation in the services sector than in industry.
From all the people who are unemployed, more than 50 percent is unemployed for more than a year. According to experts from Institute of Employment, those people require individual approach. New government plans to solve this issue by introducing so called ‘labor intermarket’, which is a combination of social benefits and part-time employment. It may encourage employers to hire long-term unemployed people by reducing the social contributions they have to pay for them, compared with other employees. Whether these measures will work depends on many things and only time will show us if the government made the right decision.