Georgia’s official unemployment rate may not reflect the true situation in the labour market, according to financial expert Giga Bedineishvili, who argues that the country has developed an “unhealthy incentive system.” This system, he says, encourages especially socially vulnerable individuals to avoid formal low-paying jobs in favour of informal employment while simultaneously receiving state benefits.
Bedineishvili explains that many people fear losing social assistance if they officially register their employment. As a result, the real unemployment rate may be lower than the official 13.9%, possibly around 10%, but this does not indicate an improvement — rather, it highlights the presence of a shadow economy and a distorted labour market.
“We have had a high unemployment rate for years. Under almost any economic model, unemployment remains high. Motivation is shaped in such a way that the desire for formal employment is reduced. For some, it seems more beneficial to receive social assistance instead of working for a relatively low salary. This creates a very unhealthy incentive,” Bedineishvili said.
He notes that some individuals manage to combine informal work with state benefits, although he refrains from speculating on how widespread the practice is. Social assistance alone is not high enough to fully replace employment, he says, but when combined with undeclared income, it becomes financially attractive - and this distorts national statistics.
“What I’m saying is that real unemployment may be lower than the official figure, but still high - likely around 10%. This indicates a mismatch between people’s skills and the demands of the labour market,” the expert explained.
Bedineishvili adds that this situation also creates a political vulnerability, as people dependent on social assistance become more susceptible to political influence.
