Georgian companies say they employ a growing number of foreign workers and want to attract more as the local workforce emigrates.
The trend follows longstanding concerns over labor shortages voiced by the representatives of various industries, with the construction and hospitality sectors particularly affected. The growing cost of living has pushed more Georgians to emigrate, leading local businesses to fill the resulting gap with workers from neighboring countries and Central Asia.
“The labor supply in the market is not keeping pace with the growing volume of construction, so [the problem] is getting worse over time,” Beso Ortoidze, general director of Arsi, a Georgian construction company, told Business Media Georgia in March.
Ortoidze said labor emigration and the construction boom have led companies to consider bringing in workers from Turkey, Uzbekistan, and Tajikistan, describing the trend as “normal.”
“If Georgians are going to Eastern Europe, and [those from Eastern Europe] are going to Western Europe, it’s logical that [workers] are coming here from Asia,” he argued.
Local employers started sounding the alarm about labor shortages as Georgia began to recover from the economic crisis caused by the pandemic. As restaurants reopened and tourism picked up, businesses increasingly complained that they were having trouble finding people to hire, including in the service sector. At the time, these complaints led to controversy as they contrasted with the perceptions of Georgian workers, who, in turn, complained of unemployment and poor working conditions. Currently, the official unemployment stands at 16.4 percent.
The shortage forced employers to raise salaries, but they say it was not enough to attract workers. They now think emigration is chiefly to blame.
While it used to be mainly Georgian women who migrated to Western European countries for care work, more and more young men are seeking and finding better-paying jobs in Eastern Europe, with Poland standing out as a particularly popular destination. Concerns have also grown over the fate of those who risk their safety by crossing illegally into the United States via Mexico.
Prior to the pandemic, Georgia was characterized by a negative net migration, a trend apparently boosted by visa-free travel to the EU from 2017. The pandemic and the influx of tens of thousands of Russians, Belarusians, and Ukrainians after Russia’s full-scale invasion of Ukraine partially distorted that picture. The official data show a decade-high of 125,269 people leaving the country in 2022 (the peak may be partly related to the opening of borders after the pandemic, however). Still, the net migration is positive, reflecting the war-related influx.
“Aging population, workforce outflow, and low birth rate make labor shortage a long-term challenge,” warned TBC Capital, a Georgian think tank, in a report published in February. According to the report, labor inflows were “still expected from relatively lower-income neighboring countries” to work in areas such as construction, agriculture, and accommodation/food service.
Eventually, Georgian businesses confirmed that they were offering more jobs to foreigners. According to one account, foreigners made up 20-40 percent of the construction workforce in January. Construction industry representatives say they particularly struggle to plug the gap among skilled workers.
In Georgia, labor shortage appears to persist even though the average wage has been growing over the past years.
The latest official data show that the average nominal salary in construction climbed from GEL 2,536 (USD 935) in the last quarter of 2022 to GEL 3,063 (USD 1,130) in the same period of 2023 – higher than the overall average (USD 753). Median salaries, however, are lower, at GEL 1,500 (USD 553) in construction in 2022, as per the latest official data. And while the construction sector is one of the better-paid industries in Georgia, the median wage still falls short of what Fair Labor Platform, a Georgian watchdog, calculated to be a “living wage” in Georgia – currently at GEL 1,706 (USD 630).
Shortages and workforce emigration have also been attributed to poor working conditions. A recent study highlighted a worrying deficit of nurses, known to be one of the most overworked and underpaid groups of workers in the country.
A parallel rise in the cost of living has further undercut the effects of nominal wage growth. Inflation in Georgia peaked in 2021-2022, and despite moderating trends over the past year, life hasn’t gotten cheaper for many Georgians. Skyrocketing prices for food and housing have left many struggling to make ends meet.
As the general elections are looming in October, high prices and emigration are becoming hot topics in political discussions. The ruling Georgian Dream party has downplayed the emigration concerns, attributing the exodus to relaxed travel rules with more developed countries. In recent years, the Georgian government has even tried to promote legal employment opportunities for Georgians abroad, including in Germany.
But behind the scenes, the authorities may be growing increasingly worried over the effects of the workforce outflow. Germany’s Tagesschau news service reported last December that Georgia had rejected an offer to expand Georgian access to the German labor market.
“From the German perspective, a sensible move – but for Georgia, this idea was completely uninteresting,” Tagesschau wrote.
Nini Gabritchidze
