Even amid the economic crisis, Russia's unemployment rate is not yet as high as once predicted. However, the labor market is facing a number of structural weaknesses, such as rising youth unemployment.
Statistics
The unemployment rate in Russia is frightening, although these figures have not yet exceeded the critical norm. The statistical data were received by Rosstat in August 2017. According to official figures, the number of working people was 78 million, and unemployed people - at least 3.8 million. Compared to previous years, the overall rate fell below 5%. But let's find out how critical these are and when it's time to start sounding the alarm.
Unemployment in a country is measured as follows: an index is used that is calculated by dividing the number of unemployed by the total labor force in the country, and then multiplying this figure by 100. As a rule, the labor force consists of people who are young enough and suitable for any job, including the physical one.
The unemployment rate in Russia is an important economic factor. However, disputes aboutthat leads to this problem, are underway until they are. But economists are sure of one thing - unemployment, as a rule, appears in bad times for the country, that is, during a recession (a decrease or slowdown in economic growth) and a crisis.
Problem in the country
In terms of other important economic factors, inflation in Russia has been declining for several years now, while real (inflation-adjusted) gross domestic product is still rising after a sharp decline in 2009.
Like most other countries, Russia's economy is mainly oriented towards services and various industries, while the agricultural sector plays almost no role, especially when it comes to the next generation gross domestic product. Consequently, the vast majority of the labor force is concentrated in the two sectors indicated above. But Russia is still among the top wheat exporters worldwide, ranking third behind the US and Canada.
Compared to previous years: rising and falling
Unemployment in Russia is a problem that drags on from year to year. If we take statistics for the last 10 years, then the country has not yet been selected from the 5% limit. At the same time, the crisis moment came in 2009, when the index was equal to 8.3%. For more accurate clarity, we suggest that you study the table, which shows brief statistics on unemployment in Russia by year:
| 2008 | 2009 | 20010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| 6, 2% | 8, 3% | 7, 3% | 6, 5% | 5, 5% | 5, 5% | 5, 5% | 5, 6% | 5, 5% | 5, 3% |
Terminology
An unemployed person is one who does not work and is usually actively looking for a job. When calculating the index, people who are retired, those who have a disability, are on maternity leave or study in any institutions, have not reached a certain age.
Reason
Unemployment in Russia should not surprise anyone, because almost all countries in the world face this problem. For example, in Turkmenistan the index reaches 70%, in Nepal - 46%, in Kenya - 42%, even in Greece and Spain this figure varies from 27% to 28%. Let's find out the main causes of unemployment in Russia:
- People leave their previous job to find a higher paying, more convenient one.
- People were fired and now can't get back.
- The company has cut its workforce. This may be due to the fact that the country's economic growth is slowing down, most goods or services are not in demand.
- Went on maternity leave, entered an educational institution, did not reach working age.
- The position of a persondistributed to other employees.
- Too many people. This factor plays a big role, especially in small towns, where there is much more demand than supply.
- Low wages, harsh working conditions.
- Scientific and technological progress, where human power is replaced by robots, machines.
- There are not enough jobs, both in certain regions and throughout the country as a whole.
Facts
From the end of summer to the beginning of autumn 2014, when the economic crisis in Russia was just beginning to develop, oil prices began to fall rapidly, followed by the ruble, and inflation began to rise. Not surprisingly, many experts predicted that the Russian population would inevitably face the severe scourge of mass unemployment.
The logic of such forecasts was clear - the country was suffering from a severe economic downturn that affected almost all sectors of the economy. The state obviously did not have enough resources, as in 2008-2009 during the previous financial crisis, to provide large-scale investments in all areas affected by the crisis.
Today, almost four years after the crisis began, the forecasts of skeptics have not come true. It seemed that under these conditions, the natural reaction of troubled industries would be to lay off en masse to cut costs and save money. But neither in 2015, nor in 2016, nor in 2017 did this happen. According to statistics, unemployment in Russia has never been so globalproblem as in 2009. For all the years, the index has almost never exceeded a very modest figure of 6%. And (compared to global statistics) this figure is commendable.
Let's take an example. The unemployment rate reached almost 10% in the US (during the peak of the 2008-2009 crisis). The average unemployment rate in the EU is currently below 10%, which is considered a success as almost 8 years ago the index topped 12%. At the height of the economic crisis in countries such as Spain, Greece, Italy, this figure reached 40%. But there is still cause for concern. Already today, in these countries, approximately one in five people finds themselves without work. How did Russia manage to avoid such a fate?
What makes Russia different
According to Tatiana Maleva, Director of the Institute for Social Analysis and Forecasting at the Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA), since the 1990s, Russia has been developing its own model of the labor market, which differs from the Western one.
While in most countries of the world companies reduce production and headcount during times of economic turmoil, in Russia, fearing an aggravation of social tensions, all market participants behave completely differently. Instead of laying off inefficient workers, employers prefer to cut wages. In addition, the Russian labor market resorts to a system of hidden unemployment, in which workers are transferred to a shorter week, sent on unpaid leaveor reduce their hours and production rates.
Workers are happy to accept this system, and all because of the small number of viable alternatives - the risk of not finding a new job scares people even in large metropolitan areas. The state is also quite satisfied with this behavior of employers and employees, as it ensures that there will never be a large influx of people seeking unemployment benefits in Russia. This could undermine an already weakened budget.
Unemployment benefits in Russia
Currently, the minimum monthly unemployment payment is 850 rubles (approximately $15 at current exchange rates) for people looking for a job for the first time, in the first year after being fired for violation of labor discipline, and the maximum is 4900 rubles (approximately $85). Obviously, such small amounts are not enough to survive, so they do not provoke people to register as officially unemployed. There are just over three million such people in Russia today.
One big advantage of this kind of labor market model that suits everyone is that it makes it possible for society to avoid tensions and political outbursts. However, the main drawback is that, as a result, our country has an economy suffering from sluggish processes. That is, in an environment in which everyone has job security, no one has an incentive to fight for jobs.
Lower salary
Today the unemployment rate in Russia is 5,3%, which corresponds to about 4 million people. At the same time, real wages fell by almost 10% last year. This is the reason why the country did not experience a sharp increase in unemployment - the decline in real wages testified to this process.
Employers continue to respond to the crisis in this way. Over the past year, more than 24% of the families surveyed confirmed that they had their wages cut, 19% of citizens had delayed payments, and 9% had their working hours reduced, they were forced to take unpaid leave or were fired.
Temporary employment
Since the amount of unemployment benefits in Russia remained virtually unchanged in 2018, people began to look for part-time or temporary employment, which would bring a little more income than government assistance. At the end of May 2016, according to the Ministry of Labor, this sector of the labor market grew by 18 percent compared to the same period last year. Overall, the number of part-time workers has risen to 41,500 over the past year and is now over 300,000. This is not much for a large country like Russia, but it is equivalent to the population of a large city.
The most important thing is that the number of temporary workers is growing, there is a certain trend. Yes, employers are trying to avoid mass layoffs, obviously realizing that if this happens at their enterprise, then the state will obviously not be happy about this. Especially when it comes to elections, because then no oneinterested in the appearance of hotbeds of social tension on the map of Russia.
At the same time, the economic crisis is not over yet, GDP continues to decline, although not as sharply as in the period from 2014 to 2016. Most businessmen are still faced with the need to optimize their costs, including wages. Otherwise, their business simply cannot survive. Therefore, decisions are currently being made that provide for the transfer of workers to various forms of part-time employment. Thus, Russian businesses reduce their costs by resorting to this method.
In conclusion
Russia's main problem is that our market creates very few new jobs. Its peculiarity is only that it provides a high level of employment and a low level of unemployment due to highly differentiated wages, as well as a significant share of low-paid employment. At the same time, the demand for temporary employment is growing in the labor market, where movers, handymen, repairmen, drivers, packers, sellers, cleaners and cooks are needed.
Summarizing, we can say that the Russian labor market was able to respond to the challenges of the economic crisis, using its own model, in which natural disadvantages were turned into temporary advantages. Reducing wages, transferring people to temporary work, reducing working hours, intensifying internal labor migration, transferring people to remote work - these processes are nothing but temporary measures. But theyallow many people to stay afloat with at least some source of income during difficult economic times.
