State Duma Deputy Predicts Unemployment and Wages Decline Because of Non-Working Days

State Duma Deputy Predicts Unemployment and Wages Decline Because of Non-Working Days

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In the near future, one in two Russian companies will put their employees on unpaid leave. Moreover, one in three of them will be forced to reduce staff. This statement was made earlier by experts from the Center for Strategic Research.

The COVID-19 pandemic has picked up steam. So, as of the morning the morning of April 13, more than 1.85 mln cases of the new coronavirus infection were registered worldwide. Meanwhile, Russia still manages to stand apart from most large countries, maintaining stability and preventing uncontrolled and rapid spread of the virus inside the country.

In any case, the authorities had to impose certain restrictions. However, chances are it was the “pre-emptive” measures that led to these impressive results, as President Vladimir Putin stated earlier. They helped avoid the fate of the United States, Spain, and some other countries and regions, where there are already hundreds of thousands of infected people.

However, the Russian authorities managed to achieve these results not only by monumental efforts but also by putting the integrity and stability of the national economy at stake. The latter has been already cornered by the recent price war in the oil market and currency fluctuations. Moreover, at present, the Russian economy is experiencing a real shock from the “non-working” days until April 30 in the country.

Certainly, this decision has been criticized. Its opponents say that it is not a good idea to force residents to stay at home and make employers pay them their salaries without doing their work and without state subsidies. There are a lot of arguments in favor of these accusations. For example, some people maker a reminder that millions of Russians simply do not have savings to safely and comfortably spend non-working days. Moreover, chances are the lockdown will be extended. Others recall that without any government support, businesses may not be able to cope with the obligations to pay salaries to workers who stay at home. Still others stress that the Russian economy prior to the pandemic was already quite unstable and they emphasize the risk of additional stain.

Many to be Fired, Rest of Them to Face Wage Reduction

There is an opinion that in fact, the current regime of non-working days may create more severe problems and deprive many Russians of jobs. According to Oleg Shein, a member of the Duma Committee for Labor and Social Policy and a member of A Just Russia party faction, the non-working days are likely to lead to a sharp increase in unemployment and lower salaries in the country.

In the near future, one in two Russian companies will put their employees on furloughs. Moreover, one in three of them will be forced to reduce staff. This statement was made earlier by experts from the Center for Strategic Research who are monitoring the business environment in Russia under the current conditions. Shein fully agrees with this opinion. He says the non-working days may turn into even greater problems for the most vulnerable categories of Russians.

“Changing salaries means changing essential working conditions,” explained Shein. “According to the norms of the Labor Code, employees must be notified in written form one month in advance. However, we are well aware that people often have a high share of bonuses in their salaries’ structures, or are paid piecework wages. That is why a cut in salary is not a big problem for employers. In addition, in accordance with the Article 121 of the Labour Code, some companies may transfer their employees for two-thirds of an ordinary salary through the fault of an employer. In this case, the Labor code and presidential decree oppose each other. There are a lot of moments of this kind because there are a lot of unofficially employed people in the country: construction workers, drivers, agricultural workers, salespeople and many others. Certainly, this situation is dangerous because it is fraught with an increase of unemployment. In turn, as competition in the labor market spikes, it will lead to a fall in salaries even for those who work officially.”

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