Unemployment in Russia

ChrisD(RJ) chrisd at russiajournal.com
Mon May 6 07:48:53 PDT 2002


Profil No. 17 April 29, 2002 WHERE ARE WAGES RISING? Why is unemployment in Russia different from unemployment in the West? Author: Maria Mikeli [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE ECONOMIC GROWTH WHICH HAS BEEN DISCUSSED IN THE MEDIA OVER THE PAST TWO YEARS BECAME REAL AT THE END OF LAST YEAR AND EARLY THIS YEAR. WAGES IN RUSSIA HAVE STARTED RISING: NOT ONLY IN THE STATE SECTOR, BUT ALSO IN THE PRIVATE SECTOR.

Unemployment in Russia is different from unemployment in the West. First, the official statistic data hardly likely reflect the real situation. It is very easy to count the number of the unemployed in the West: it is enough to count the number of people, registered in the labor registry office - by the way, it fully coincides with the number of unemployment allowances. In Russia, only 1.3 million people are registered in labor registry offices, though according to official data, there are about 7 million unemployed in the country, which is 10% of economically active population of the country. Such disrespect to the labor registry office has a number of reasons. First, unlike in the West, an unemployed has the right to receive the unemployment allowance for no longer than a year. Second, this allowance is 75%, further 60% to 45% of the official average annual salary at the last job. Apparently, the overwhelming majority of people have such large an official salary, that a trip to pick up the money may cost half of it. Eventually, the Russian people simply do not believe that the state is really willing and able to aid them. That is why people prefer not to register at the labor registry office.

However, 10% of the population is just the very top of the iceberg. According to expert appraisals, another 13 million of the population, which is slightly less than 20% of economically active people, are "hidden unemployed" - they either have to work part-time, or are on permanent non-paid leaves.

Besides, the unemployment rate in Russia greatly varies from region to region. Understandably, it is the highest in depressive regions. For instance, in North Caucasus republics: 34.9% in Ingushetia, 28.8% in Dagestan. There are lots of unemployed in the places with town-forming enterprises, which are closed now, for instance, 30% unemployment rate in Ivanovo. However, the unemployed from the North Caucasus live rather decent lives: people are simply unwilling to work for a thousand rubles a month and make so-called small businesses: work as taxi-drivers, or sell something.

At the same time, in large cities and economically developed regions the unemployment rate is considerably lower. For instance, in Moscow it totals 0.6% of the population - against 3.5% in large Western cities. Such a considerable disparity in the unemployment rate in large cities and on the periphery is another difference between Russia and the West. In Russia there is no legal labor migration - gasterbaiters and seasonal workers is another thing - which is mostly due to complicated system of purchasing accommodation, registering and unregistering, absence of a developed informational database, and so on.

The employment structure is also very interesting. There is only one coincidence with the West: it is the percentage of white-collar unemployed (people with a university education) is half the number of unemployed with a secondary or trade education. However, in the West all white collar workers work in their chosen professions, while in Russia it's 50% at best. The rest are pushing less educated people from the unqualified labor market.

Overall, it is senseless to speak of any connection between education and profession in Russia. This leads to another paradox: against the background of a very high unemployment rate, the country starves for qualified personnel. We are not speaking of about a million of vacancies - according to the Labor Ministry data - these are mostly vacancies in the state sector, where wages are so low it is unable to provide for the subsistence minimum. We mean commercial enterprises and restored enterprises, which are ready to pay rather high wages, by Russian standards, but are unable to find the necessary qualified personnel. The number of vacancies in these spheres runs into hundreds of thousands.

The metals and machine-building sectors have the largest personnel shortages, as they have recorded growth since 1998. These fields need both qualified workers, engineers and technicians, and - as everywhere - top-level executives. The situation in the processing, refining, and food industries is similar, as well as in the sphere of services, retailing, and telecommunications. Demand for investment and finance specialists is also very high. At the same time, unlike the pre-crisis times, there are enough bank clerks in Russia.

The economic growth which has been discussed in the media over the past two years became real at the end of last year and early this year. Wages in Russia have started rising: not only in the state sector, but also in the private sector. (Translated by Arina Yevtikhova)



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