#16 - JRL 7067
pravda.ru
February 18, 2003
Russia on the Edge of Unemployment Disaster
The government presents joyful reports, although the situation gets critical

The Russian Federation State Statistics Committee informs about the reduction of the unemployment level in Russia. As it turns out, the unemployment situation in the country improves. Official documents say so, at least. Nevertheless, the major social department of the government – the Ministry for Labor – projects a considerable growth of unemployment in the nearest future. Power industry reforms, public utilities reforms, railway and metallurgy reforms will deprive hundreds of thousands (if not millions) of Russian people of their jobs. The state has nothing to offer to all those people, who suffer from the stabilization and from the moderate economic growth. There are a lot of doubts about the fact, if there is someone, who is interested in the fates of those people at all. Yet, the State Statistics Committee of Russia keeps providing its joyful calculations.

According to the report from the State Statistics Committee, only 21.6% of Russian people had their income lower than the official living wage during the last quarter of the last year. The official living wage is 1.893 rubles a month, which is a bit more than $50. There were 31.5% of such people in the beginning of 2002. That is why, the Ministry for Labor can report that the number of poor people in Russia reduced by 14.2 million people. The ministry hopes that this index will be an advantage of its work.

By the way, according to the official statistics, the level of hidden unemployment dropped almost 2.7 times over the recent two years. The officials of the Ministry for Labor believe that 92.6-92.8% of the economically active population of the country will have jobs by the year 2005. Although, this assertion contradicts to the forecasts of the same ministry. Various departments of the ministry have probably failed to coordinate their data.

Alexander Pochinok, the incumbent Minister for Labor, promised two years ago that the official number of the poor would be reduced to the level of 17-18 million people by the middle of 2003. However, as the dynamics of the statistic information shows, Pochinok’s words remained only words. The minister failed to work a miracle. The number of the Russian people, whose level of income is lower than the living wage, does not have a tendency for reduction: 31 million people in the first quarter of 2001 and 30.9 million in the beginning of the year 2003. Their number is supposed to grow in the percentage ratio: the State Statistics Committee registered that the Russian population considerably reduced in its number over the last two years.

Ministerial departments often forget to coordinate their data. Last year the State Statistics Committee informed that up to 40 million Russian people suffer from undernourishment on a regular basis. It is obvious at present that the number of hungry people is going to increase in the nearest future.

The Ministry for Labor forecasts nowadays that the registered unemployment level in Russia is likely to grow to 1.5 million people in the coming three years. Metallurgy, railway transport and power industries will provide the basic growth of the unemployment. Ministerial officials forget to mention the coal industry for some reason: oligarchs are about to complete its unification. Officials do not take account of the coming reform in the field of public utilities either.

In connection with the reform of the metallurgical industry, about 150 thousand people will become unemployed, as the specialists of the Ministry for Labor think. Two hundred and thirty-eight thousand people are expected to be fired as a result of the railway transport reform. The power industry reform is to result in the unemployment of 61 thousand people at least. Furthermore, the ministry acknowledges that the number of illegal labor migrators (about three million people) doubles the official number of the unemployed people in the country.

It goes without saying that no population employment departments (not to mention small business or shadow economy) will be able to cope with such a huge mass of people. All those things will eventually result in the fact that the human labor price will drop considerably in Russia as a whole. The employment demand will exceed the unbalanced supply several times. Hundreds of thousands of people will remain unemployed, homeless and hungry.

Does anyone in the Russian government calculated such a development of the social situation? Does anyone at the presidential administration think about who those people are going to vote for at the election? Do Kremlin politicians hope that the worst is going to happen after the parliamentary and the presidential elections? It is hard to answer these questions. The government does not say anything on the subject, while oligarchs keep brushing such questions aside.

On the other hand, Russian large companies come to the realization of the fact that the bitter situation needs to be improved at least a little bit. The Siberian Coal Energetic Company, which got hold of Siberian coal fields, gets rid of the excessive personnel at the moment. This is a logical way for market relations development in Russia: no charity at all. A company will keep only those people, whose labor brings the maximum profit to the company (at the minimum spending, of course). So, the company decided to set up the special stabilization foundation. As the official press release of the company mentioned, the funds of the foundation would help the dismissed people to survive the hard consequences of their dismissal. So-called excessive people will be able to obtain new professions at regional schools. In addition to that, the company launches a program to assist the economic employment of the Krasnoyarsk region. The company is going to offer certain loans to those people, who will wish to start their own businesses after they are fired. Most likely, those loans will go not to the fired people, but to the children and relatives of the company’s managers. On the other hand, an oligarchic company is doing something for its workers, trying to observe some decencies, at least verbally.

Dmitry Slobodanuk
PRAVDA.Ru
Translated by Dmitry Sudakov