Central bank predicts real wages to exceed pre-war levels by end of 2024 amid labor shortage
Real wages in Ukraine increased by 17.6% in the second quarter of 2024 compared to the previous year, according to the National Bank of Ukraine's latest inflation report. The NBU predicts that by the end of the year, real wages will exceed pre-war levels due to high competition among employers for workers.
The labor market remains tight, as evidenced by the increase in the number of job vacancies, which is at its highest level since the start of the full-scale war. The highest demand is for workers in the service sector, trade, and hospitality. The main centers of demand remain large cities such as Kyiv, Lviv, and Dnipro.
At the same time, the central bank notes that for the first time in the last two years, the third quarter saw an increase in the number of resumes in absolute terms. This may indicate that people are returning to the labor market and possibly transitioning from the shadow economy to official employment.
Despite the increase in job supply, Ukraine continues to face a significant labor shortage in most sectors. There are significant disparities between demand and supply for various professions. Companies' staffing levels are generally incomplete, and they do not anticipate an increase in the number of employees.
The labor shortage in the third quarter was exacerbated by increased migration abroad, partly due to prolonged power outages during the summer.
The severe labor shortage is driving wage growth.
"It is expected that by the end of this year, real wages will exceed pre-war levels and continue to rise due to significant competition among employers for the available workforce," the report states.
The NBU predicts that the unemployment rate will gradually decrease but will remain higher than pre-war levels.
Low wages and a shortage of vacancies by profession are reportedly the main problems faced by job seekers in Ukraine.