The labor market is recovering to pre-pandemic levels after the covid shock experienced two years earlier. Unemployment fell to 4.3% and is nearing its lowest level since 2019. Employment is also the best in two decades. The figures explain why employers are finding it increasingly difficult to find workers and wages are rising at a record pace.
Beneath the surface, however, structural problems with human capital are visible. The overall labor force is shrinking due to continued population decline. The general trend is that older people have an increasing weight in the labor force over the years. Over the past two decades, the share of workers under the age of 35 has fallen from nearly a third at the turn of the century to just over 23% last year. Meanwhile, the share of workers over the age of 55 increased by about 10 percentage points over the same period.
These developments pose challenges for both employers and policy makers. How to attract and retain young and qualified workers? How to ensure adequate social protection and health care for older workers? How to balance productivity and sustainability in a changing labor market?
These are some of the issues that need to be addressed to ensure that the labor market recovery is not only quantitative but also qualitative.
This post is based on an article by Capital newspaper authors: https://www.capital.bg/politika_i_ikonomika/pazar-na-truda/2023/03/20/4462232_pazarut_na_truda_se_vuzstanoviava_do_nivata_ot_predi/