01.03.2024
THE LABOR MARKET IN BULGARIA HAS THE WORST FORECAST IN THE EU
The working age population between 20 and 64 in our country will decrease by one third by 2050. According to this indicator, our country has the worst forecast in the entire European Union. This is shown in the latest report of the Allianz Trade company (Allianz Trade, formerly Euler Hermes).
The main reasons are the demographic crisis and migration, as Bulgaria is one of the main "donors" of labor to other countries in the EU.
According to the data in the report, about 50 percent of the migrants to the labor market in the EU since the beginning of the 21st century came precisely from Bulgaria, Romania and Poland. Therefore, the forecast for the contraction of the working-age population in Poland is 26 percent by 2050, and for Romania - by 22 percent. It is also expected to decrease dramatically in countries such as Lithuania and Latvia. Among the main possibilities for improving the prospects in Bulgaria and the rest of the countries of the group, the analysts predictably point to an improvement in working conditions and an increase in wages, which would reduce the flow of migrants abroad.
Due to the serious demographic problems of the Old Continent, the experts of "Allianz Trade" expect a deepening of the shortage of qualified labor in almost all EU countries, and by 2050, the average population between the ages of 20 and 64 will decrease by 20 percent. They consider several possible scenarios for countering the negatives in the four largest economies – Germany, France, Italy and Spain – using different combinations of instruments – changes to labor market policies, productivity gains and attracting migrants.
The analysis shows that none of the four countries can find a sustainable solution if they rely only on the inflow of labor from outside. In such a scenario, they would need between 100,000 and 500,000 migrants per year. Specifically, Germany would need about 482,000 people, Italy – 414,000, Spain – 338,000, and France – 115,000.
The situation appears most complex in Germany, where even with an increase in the retirement age to 68 and targeted efforts to increase the participation of women and pensioners in the labor market, estimates show that 200,000 migrants will be sought annually. Spain and Italy have a larger reserve of population that is not currently employed in the labor market. If it is successfully attracted and activated, an additional 89,000 and 131,000 migrants per year would be needed respectively. The prospects are most favorable in France, where such measures would be sufficient to solve the problem even without the need for additional labor from outside.
However, Allianz Trade experts emphasize that attracting migrants will be an increasingly difficult process due to the deepening demographic crisis in more and more countries in Europe, as well as the emergence of the same problems in large economies in Asia and Latin America. Given the fact that only in Africa is the population between the ages of 20 and 39 not declining, the fight for skilled labor will become increasingly competitive everywhere in the world, they warn.
In this unfavorable context, among the possible measures and solutions indicated in the report are an increase in real working hours in some European countries and an improvement in the integration and qualification of migrants, including achieving a higher degree of engagement of women among them. A good example of this is Sweden, where the prospects for preserving the workforce and, accordingly, the stability of the economy at the moment seem most optimistic.
