The unemployment rate in Cyprus has dropped to 6% in the first quarter of 2024, with 490,232 individuals employed, showcasing a strong economic recovery. The workforce participation rate is approximately 64.5%, reflecting a resilient labor market in Cyprus.
Cyprus’s Labour Minister Yiannis Panayiotou proposes opening the job market to foreign students by extending work hours, allowing postgraduation employment, and broadening job roles. The plan aims to integrate international students into the local workforce, enriching the labour market with diverse talent and fostering economic growth.
The labour market disconnect in Cyprus postCOVID19 highlights the gap between business needs and government policies. Due to EU workers leaving during the pandemic and not returning, Cyprus faces labour shortages. Government efforts to allow hiring from third countries have been slow, creating challenges, especially in tourism and hospitality industries, which have seen increased demand. A more responsive policy is needed to align with business requirements and economic growth.
The government is nearing a decision on revising the minimum wage law, which is expected to benefit around 25,000 lowpaid workers. Labour Minister Yiannis Panayiotou has indicated that discussions are coming to a close, with an announcement expected next week, as the government seeks to balance economic fairness with the demands of the economy.
The Cyprus Labour Study in 2023 reveals that despite nominal wage increases, workers’ incomes have actually decreased since the pandemic. The study highlights income distribution favoring businesses over workers, slow investment in productive capital, high unemployment rates, trade imbalance, and stagnating labor productivity as additional economic challenges.
