Ukraine’s economy has taken a battering from Russia’s invasion, with unemployment high and consumer debt soaring
A perfect storm of job losses, high prices and soaring utility bills caused largely by Russia’s invasion has left millions of ordinary Ukrainians struggling to get by.
Many have found themselves in financial difficulties due to reduced income or loss of work altogether.
According to the National Bank of Ukraine, the annual unemployment rate in Ukraine in 2023 is expected to be 26% – more than double its 2021 average of 10.3%. Economic losses from the war reached $700bn in 2022, while 14.5 million Ukrainians fled the country altogether, 40% of them now working abroad. Others who have left include employers.
Financial journalist Ivan Verstiuk blames economic uncertainty for the drainage of Ukraine’s labour force. “Very few people understand what will happen in Ukraine six months or a year from now,” he told openDemocracy.
Ukraine’s combined consumer debt for utility bills already amounts to more than 81 billion hryvnias (about £1.76bn), while water rates and electricity prices are due to go up again on 1 June.
That adds to year-on-year inflation of 16.9% as of April (and an even higher level of consumer inflation of 17.9%), lay-offs, loss of workplaces, downtime, forced unpaid leave, lack of work with decent conditions, forced displacement, and persistently low wages and pensions.
Downtime
Violetta Kalashnikova, 22, lost her income because of the war. “I am an ecologist,” she told openDemocracy. “It is quite difficult for me to find a job in my specialty.” Two years ago, she said, “luck smiled on me” and she found a good job at an institute carrying out research on hygiene, toxicology, food and chemical safety.
Kalashnikova stayed in Kyiv when Russia invaded – but her employer forced her to take unpaid leave as there was nothing to pay her salary with. After seven months, she resigned.
“Every day I had less money,” she said. “Time dragged on and my savings had run out, so I had to ask family and friends for money.”
Kalashnikova went to work as a sales consultant in a clothing store, but quit again due to terrible working conditions.
"I wasn’t comfortable working 12 hours a day,” she said, “and receiving a rather small salary of 11,000 hryvnias [about £240] for 16 shifts.”
Kalashnikova cannot leave Ukraine because her boyfriend is of military age, and the future looks bleak. “If we don’t find jobs this year [that pay] 50,000 hryvnias [£1,089] a month, then I think it won’t be really possible for us to survive.”
Unemployment in Ukraine is at its highest level since 1991 - Financial journalist Ivan Verstiuk
One of the common practices that Ukrainian employers resort to during wartime is employee downtime.
For instance, after the end of the heating season this April, Zaporizhzhia’s public heating company sent part of its employees on downtime for half a year, where they are paid two-thirds of their basic salary.
Two employees at the company, which is called City Heat Networks, independently confirmed this to openDemocracy. The company did not respond to a request for comment.
An employee at City Heat Networks, who wished to remain anonymous, told openDemocracy that the downtime at the company is likely linked to Ukraine’s ongoing moratorium on heating prices for consumers – while the company’s expenditures have increased. “That is why [the company] saves on everything, except paying for gas” which is used to generate heating for the city, the employee said.