Oleg Shein, State Duma deputy from A Just Russia faction and a member of the Parliamentary Committee on Labor and Social Policy, said that the COVID-19 pandemic might also affect the situation.
He stressed the difficulty of assessing the real impact of the latter factor. In addition, the Russian economy is still heavily dependent on gas prices.
Shein believes that since there has been no research on specific figures for the current unemployment rates in Russia, talking about them makes no sense. Moreover, he predicts mass unemployment for the Russians, despite the fact that the federal government is declaring a whole program to overcome the crisis. Additionally, he recalls that the problems with unemployment in the country are primarily caused by the increase in retirement age.
Thus, in the recently announced draft of the national plan for economic recovery, the authors stated the goal to reduce the unemployment rate in the country to 5% or lower by the end of 2021. Recently, this document has been mentioned in many publications, whose reporters managed to get access to its content. Among other things, reports say that as presupposed by the authors of the plan, the measures the authorities have announced to support the level of employment in the country as well as small and medium-sized businesses will lead to a steady increase in incomes. However, Shein believes that the unemployment rate in Russia will be even higher by the end of 2021.
“Raising Retirement age is Causing Problems”
“In fact, no one knows what the unemployment rate in this country is at present, since no relevant research has been conducted on the labor market,” said Shein. “All we know is that there are now about 75 mln people of working age in Russia. In addition, we know that about 45 mln residents make regular payments to the Federal Compulsory Medical Insurance Fund and the Pension Fund of the Russian Federation. In other words, about 30 mln people have under-the-counter wages or are unemployed. No one knows what percentage of these people have no job, and how many are forced to have day-to-day job or to work illegally. This means that we can't predict how many people will be unemployed by the end of next year. In the absence of real input data, it is difficult to predict anything. In terms of how the overall situation might change, in all probability, the number of the unemployed will only continue growing.”
At the same time, Shein also names the main reasons for the growth of unemployment rate in the country. “Increasing retirement age causes problems,” he says. “Because of this, excess labor force is being pushed into the market.” He also noted that the COVID-19 pandemic might affect the situation. However, according to him, it is very difficult to assess the real impact of this factor. In addition, the Russian economy is still heavily dependent on gas prices.
“In order to reinvigorate the domestic market, it is necessary to increase people’s incomes – the benefits, salaries and social payments,” said Shein. “At the background of the pandemic, some things have been done, but they are not enough. So, it is impossible to predict how many people might be unemployed in the nearest future.”