Labor shortage in the labor market: The NBU examines the causes and consequences

Demand for labor in Ukraine continues to grow, while supply remains limited due to migration, causing a shortage of staff and wage increases. According to the National Bank of Ukraine (NBU), this situation is due to the support of household incomes through budget transfers, pension indexation, and minimum wage increases.

According to the NBU's April Macroeconomic and Monetary Review, labor demand is expected to continue to grow in Ukraine in 2024. An increase in the number of new job postings on job sites indicates a stable demand for labor. At the same time, a survey of companies indicates difficulties in finding quality staff, both skilled and unskilled workers.

The NBU notes that the number of job seekers is declining, which may be a result of the recovery in employment and the limited supply of labor due to migration. According to the UN, since the beginning of 2024, the number of migrants has increased by almost 150 thousand people, reaching 6.5 million.

Labor market conditions are putting pressure on both employees and employers to raise wages. Increased household incomes are also contributing to consumer demand, thanks to significant budget expenditures on military pay, pension indexation, and other minimum wage-related payments.