"The labor market has become more comfortable": what is the reason for the record decline in unemployment in Russia

The situation on the Russian labor market continues to gradually improve. On Monday, March 27, said Deputy Prime Minister Tatyana Golikova.

According to her, over the past week, the number of workers in idle time decreased by 10 thousand - to 33 thousand, in turn, the number of part-time workers decreased to 41 thousand.

"The number of unemployed registered in employment centers for the week decreased by another 7 thousand The number of vacancies in employment centers is 1.6 million, which exceeds the number of unemployed by almost three times, the level of registered unemployment is 0.7%," Golikova said.

As follows from the materials of the government, today in Russia there are about 540 thousand unemployed Russians officially registered in employment centers. For comparison: a year ago, the value was about 665 thousand, and in March 2021 - 1.75 million, according to the Federal State Statistics Service.

The observed decrease in the power indicator is associated with the measures taken earlier to support the labor market. We are talking, for example, about the organization of public and temporary work, as well as measures to encourage employers to hire certain categories of citizens.

"Contracts have been concluded for participation in temporary and paid public works of 32 thousand people, more than 21 thousand have already started work. Applications for participation have already been submitted by more than 8 thousand employers for 55 thousand jobs. According to the results, 6.6 thousand people were employed, which is 1.6 thousand more than two weeks ago," the Cabinet of Ministers reported.

As calculated by Rosstat experts according to the methodology of the International Labor Organization, in January 2023 there were about 2.7 million unemployed citizens in Russia. We are talking about about 3.6% of the working-age population, which was the lowest figure for the entire post-Soviet period. And even before the coronavirus pandemic, the value was 4.7%.

To achieve a record drop in unemployment, the country's leadership managed even against the background of unprecedented external pressure, as previously stated by President Vladimir Putin. According to him, the West with its sanctions tried to "crush the economy" of Russia in order, among other things, to hit the incomes of the population and "make them suffer" of citizens. Nevertheless, in the end, this calculation was not justified, the head of state emphasized.

"The Russian economy and management system turned out to be much stronger than the West believed ... We did not allow a drawdown in the labor market, on the contrary, we have achieved a decrease in unemployment in modern conditions. Today, in the face of such great difficulties from all sides, the labor market has become more comfortable than it was before, "Putin said in a message to the Federal Assembly on February 21.

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In addition to state programs to support employment, Western sanctions themselves have partly contributed to the reduction in unemployment. This point of view in an interview with RT was expressed by a member of the State Duma Committee on Labor, Social Policy and Veterans' Affairs Svetlana Bessarab.

As the deputy explained, after the decision of a number of unfriendly countries to stop supplying Moscow with certain goods and components, domestic production intensified in Russia. As a result, businesses began to hire more employees.

"Previously, we simply did not produce some types of products, but now, due to the policy of import substitution, production is growing, the need for jobs is also increasing. I think this trend will continue as we increase our own production capacity," Bessarab added.

In pursuit of footage

According to S&P Global, in February 2023, the composite index of business activity (PMI) in the Russian manufacturing sector and the service sector rose from January 49.7 to 53.1 points. The last time such a high figure could be observed in June 2021.

Note that the indicator reflects the real state of a particular industry. A value above 50 points indicates a favorable economic situation, below 50 points - about the stagnation of the sector.

"The recovery of business activity is also reflected in the labor market. Real wages continue to rise across a wide range of industries at historically low unemployment rates. Part-time employment continues to decline, the demand for workers in a wide range of professions is increasing, "said the head of the Central Bank of Russia Elvira Nabiullina during a press conference on March 17.

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At the same time, according to the Central Bank, against the background of the consequences of partial mobilization and the continuing growth in the demand of enterprises for labor in many industries, the shortage of labor is increasing today. Under these conditions, unemployment in Russia is likely to continue to decline, said Andrei Klepach, chief economist at VEB.RF.

"In terms of labor resources, unemployment (projected in 2023. - RT) is minuscule - 3.5-3.6%. I think it will decrease even more this year, as people are involved in military operations and the construction that is underway in four new regions. The shortage of labor is and will continue to increase, "TASS quoted Klepach as saying.

According to the analytical service of the audit and consulting network FinExpertiza, if at the end of 2021 there were an average of 2.1 vacancies for each unemployed in Russia, then by the end of 2022 the value increased to 2.5. The achieved indicator was the highest in the last 17 years.

"It is worth noting that most enterprises at the moment have solved the issues of personnel shortage. Nevertheless, in labor-deficient sectors, the problem is still quite acute. This, for example, is light industry, mechanical engineering, food production and the military-industrial complex, "said Olga Lebedinskaya, associate professor of the Department of Statistics of the Plekhanov Russian University of Economics, in a conversation with RT.

In her opinion, the shortage of personnel observed in a number of industries can lead to a more confident growth in wages. A similar point of view in an interview with RT was expressed by the Director of the Center for Market Studies of the Institute for Statistical Studies and Economics of Knowledge of the Higher School of Economics Georgy Ostapkovich.

According to him, in the face of growing internal competition, a number of enterprises can really begin to offer more favorable financial conditions for working with qualified employees. At the same time, in order to combat the shortage of labor, the country's leadership needs to do more actively to train the necessary personnel.

"The fact is that we have a lot of ordinary workers, but there are not enough highly qualified personnel. This is especially true in knowledge-intensive areas, where previously we mainly relied on foreign partners. Investing in human capital is important now. The authorities need to decide what kind of economy will be in the country in the coming years, and for these requests to train new specialists, as well as retrain people from other spheres, "Ostapkovich concluded.