According to some economists, the year 2024 will be the year when the Czech Republic will lose one of the biggest advantages that it could be proud of in recent years. And that with record low unemployment, which ranked it at the top of the entire European Union. Even economists wondered how much this value could actually fall, when it was assumed that the natural rate of unemployment was somewhere around 5%. These were supposed to be people who would simply never work.
It starts to fly
However, unemployment in the Czech Republic has fallen below three percent, although now it is slowly but surely rising. It’s still nothing major, but there are fears that the trend has already reversed and it will only get worse. Well, at least for some medium-term period, let’s give it another ten years.
After all, examples are already appearing by themselves. For example, the largest employer in the Czech Republic, the Škoda Auto company, has already announced a reduction in the workforce, which should be solved mainly through natural sales and a reduction in recruitment, but the car company is no longer ruling out certain layoffs.
An even bigger blow then hit the employees of the traditional company Laufen, which announced large layoffs in one of its plants. It is located in Znojmo and there is even a possibility of its complete cancellation. So far, it has only been significantly reduced, with 250 employees losing their jobs. This is not a strategic move elsewhere. They fall straight to the pavement and have to look for other employment.
It might help
The reasons given by the manufacturer of sanitary ceramics and bathrooms are interesting. This is mainly a drop in demand, which is related to the slowdown in the construction industry as a result of high interest rates. High energy prices are also mentioned, which is already a strange argument when they are now falling relatively quickly. However, the company also gave another reason, which the Czech Republic will definitely not take for granted. It is said to be domestic legislation that does not favor business at all. In contrast to the neighboring states, which try to attract companies to their countries.
Read also: It is not worth working in the Czech Republic. The unemployed take 40,000 per month and don’t have to lift a finger, even for years
Economists fear that similar cases will increase. Similarly medium-sized companies are at risk, as these days they can quickly lose sales. On the other hand, however, this should not be a problem to a certain extent, and a smaller cooling of the labor market could, paradoxically, help the Czech Republic. There won’t be so much pressure on wages, and those companies that are competitive and still have orders will get workers. It’s just that it must not cross a certain threshold, when everyone would start firing.
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