The Ukrainian labor market has undergone significant changes in recent years, and the war only deepened the existing problems. The loss of jobs due to the closure of enterprises, the destruction of infrastructure and mass migration created difficult conditions for the employment of millions of citizens. Part of the population is forced to work in the shadow sector or accept non-competitive conditions. Industries that used to be leaders are cutting staff today, while some areas are experiencing a shortage of specialists. At the same time, official statistics show a reduction in the unemployment rate, but the reality of the labor market turns out to be completely different.
Invented numbers and a sad picture of reality
The war, mobilization and the constant threat to life made adjustments to the labor market. Many people who have lost their jobs do not register officially. Someone was forced to go into the shadows, and someone completely lost the opportunity to work due to hostilities or evacuation. The government reports on the improvement of the situation. But it is hardly possible to count all those who went to the front, left the country or work illegally.
The labor market in Ukraine has long resembled a minefield. Even before the war, unemployment remained high, which clearly reflected problems in the economy, from shadow employment to weak support for small businesses. This is indicated by the dry figures of statistics, where level unemployment in 2021 was 10.3% with the number of registered unemployed persons of 295,000.
But the war radically changed the situation. Now the state reports on the decrease in the unemployment rate. Thus, at the end of 2023, 96.1 thousand were registered. unemployed In 2024, it reached a historic low of 94,200 people. While at the beginning of the war in 2022, the unemployment rate reached 186,500 people. With such indicators, it can really seem that life is getting better. But these figures look more like cosmetic repairs to a dilapidated building than reflect the real situation.
As the Chairman of the Committee on Finance, Tax and Customs Policy of the Verkhovna Rada, Danylo Hetmantsev, reported, according to the NBU and the government, the actual unemployment rate is 14-18% of the economically active population, and the real number of unemployed people ranges from 1.8 to 2.2 million people , which is 20 times higher than officially registered unemployment.
Do officials really not know how many unemployed people there are today? But it is worth understanding that official statistics take into account only those who register at employment centers. Mobilization, evacuation, shadow economy and destroyed businesses left many people outside this system. Those who have lost their jobs, but do not see the point in official registration, effectively disappear from the government’s view. People move into the shadows, work abroad illegally, or remain without any income at all.
At the same time, the war also changed the structure of the labor market. Certain industries, such as IT, volunteering or logistics, have received a new boost, while industry and agriculture, especially in the frontline areas, are suffering from destruction. The demographic factor cannot be ignored either, because a large number of men are mobilized, and women are often forced to change their specialization or work in conditions that are far from normal.
Today, Dnipropetrovsk (7.9 thousand people) and Kharkiv (7.3 thousand people) regions are the leaders in terms of unemployment.
Mobilization processes in the country simply could not help but affect the quantitative composition of the registered unemployed by gender. So, before the full-scale invasion, 55% of the unemployed were women, and 45% were men. Today, 77%, and in some regions 80%, are registered only by women. Men try to avoid registration.
For data research conducted by the Institute of Demography and Social Research named after M.V. Birds, 12.5 million Ukrainians remain economically inactive, due to the inability to find a job in their specialty or due to insufficient skills or education. This group also includes students, homemakers, retired people who are still able to work, women on maternity leave, and people with disabilities.
Labor market crisis
The Ukrainian labor market is not very promising today. The war has radically changed its face, and now we are dealing not only with economic difficulties, but also with a personnel crisis. The labor shortage has reached such a level that certain industries are literally paralyzed due to a lack of specialists. Data from the “OLX Job” survey showed that 67% of respondents have already felt the consequences of the personnel crisis.
Mobilization is unanimously recognized as the main cause of the crisis. Men, who make up the main workforce in many fields, were drafted to the front. As a result, business, especially in the manufacturing and construction sectors, was left without personnel. Employment of men is also complicated by legal restrictions: employers are often unwilling to hire those who could potentially be mobilized at any time. According to statistics, 79% of men looking for a job face obstacles that seemed impossible even a year ago.
Add to this the mass migration of the population abroad. According to estimates, 53% of Ukrainians left in search of safety and stability. Many people continue to work in other countries, even if it is unskilled work, because the prospect of returning to Ukraine does not look attractive yet. For the domestic market, this means the loss of qualified personnel, which could become the driving force of the economy.
It is especially painful to observe the level of unemployment among internally displaced persons in Ukraine. This is not just a problem, but a sentence for a system that should support its citizens in the most difficult times. Instead of help, real retraining programs or employment assistance, tens of thousands of people are left virtually alone with their problems.
The employment centers, which should have been a point of support, have turned into bureaucratic structures that help only formally, to tick a box. At best, IDPs receive a list of random job vacancies for low-paying, physically demanding jobs that often do not match their skills or experience. Specialists who before the war had prestigious professions – engineers, teachers, doctors or lawyers – now find themselves in construction or agricultural work, because they simply have no other choice.
As for retraining programs, they are either non-existent or so narrow that they do not take into account the real needs of people or the market in any way. No attempt to build a bridge between immigrants and employers, no systematic approach. As a result, instead of employing thousands of specialists who could strengthen the economy, they are thrown into the shadow sector or forced to look for work abroad.
It looks especially painful against the background of how IDPs receive minimal assistance from the state. Promises of help with employment are often just words, while most people don’t even know who to turn to for advice or support. Information does not reach, the connection between the authorities and the displaced people is lost.
This is not only a human tragedy, but also a huge loss for the country. Hundreds of thousands of qualified specialists remain idle when their potential could work for the reconstruction of Ukraine. The lack of support and competent integration of immigrants into the labor market is a chasm that the state will have to overcome for a long time, unless it starts acting now.
Meanwhile, the structure of demand in the country is changing. Labor shortages are most felt in areas that require physical labor, while demand for telecommuting positions remains stable. However, not everyone can or wants to retrain. As a result, the business is forced to either raise wages to keep employees, or close vacancies due to the inability to find the right people.
Today, the Ukrainian labor market looks like a boat with holes that have to be patched on the go. Without comprehensive solutions — from supporting small businesses to reforms in the employment system — coping with the crisis will be extremely difficult. But the main lesson is clear: the war has changed the rules of the game, and everyone must adapt to these new conditions.
It is clear that under such circumstances the labor market remains in limbo. If the war drags on, the situation will only get more complicated. Inflation, shrinking investment and crumbling infrastructure will continue to put pressure on the economy. But there is also a chance for change: support for small businesses, retraining programs and the development of restorative industries can be the key to stabilization.
Foreign experience in solving unemployment problems
In many countries of the world, the unemployment rate is an indicator that appears once a quarter in reports, but a real indicator of the state of the economy. That is why there are developed systems of its monitoring and regulation, which sometimes seem like a fantasy against the background of our realities.
Many countries are engaged in real monitoring of the situation using modern methods and approaches. In the USA, for example, labor market data is collected and analyzed by the Bureau of Labor Statistics. Every month, large surveys of employers and households are conducted to understand how many people are working, how many are looking for work, and how many have become so discouraged that they have stopped looking altogether. There is a single monitoring system in EU countries that allows you to see the situation in each region. This is especially important for the regulation of labor migration between the countries of the union.
Some countries go even further. In the Netherlands, for example, there is a forecasting system. There they analyze which professions will be most in demand in 5-10 years, and already today they are retraining people in these areas. And in Germany they actively cooperate with business. The state compensates employers for part of their salaries if they hire people from risk groups – young people without experience, older workers or immigrants.
In the Scandinavian countries, artificial intelligence is used to analyze the labor market. AI-powered services match job vacancies to unemployed people based on their skills, where they live, and even their temperament. This saves a lot of time and helps people find a job that really suits them.
In many countries, unemployment is not only regulated, but its nature is also studied. For example, in France, the state finances psychological support for those who cannot find a job for a long time, because it affects their motivation. And in Japan, the unemployed are actively involved in temporary socially useful work, so that people do not fall out of the rhythm of life and do not lose their skills.
The main difference of the foreign approach is that there they do not wait until the problem is solved by itself. Unemployment regulation is a complex, multi-component system in which government, business, and even technology work together. And although there are no perfect solutions, their experience is definitely worth paying attention to.
Ukrainians are known for their ability to adapt to the most difficult conditions. But will this force be enough to bring the labor market out of the crisis? The answer depends on both economic reforms and the end of the war. And until then, unemployment remains a painful indicator of the state of our country, which is difficult to hide even behind the beautiful figures of official statistics. Ukrainians will have to learn to live and work in the new reality, but for this to become possible, the state should give them a clear plan of action, and not cover up problems with inaccurate numbers.
