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Labor Market in Russia: Monitoring Report

Labor Market in Russia: Monitoring Report

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Labor Market Monitoring

Related Content

Report

• Labor Market Monitoring #1 in English (PDF 9 Mb)
• Labor Market Monitoring #1 in Russian (PDF 5.6 Mb)

Photos

• Photos from the Press Conference

<!-- --------------------- Highlight --------------------- <ul class="highlight"> <li>Global output is expected to decline full 2.9 percent in 2009, with high-income countries hardest hit.</li> <li>Russia’s real GDP is likely to contract about 7.9 percent in 2009. </li> <li>Unemployment could rise to 13 and poverty to 17.4 percent by year end. Russian middle class measured by household consumption is likely to shrink by about 10 percent.</li> <li>External environment for Russia will continue to be difficult over the next 18 months.</li></ul><hr color="#f0eded" noshade="noshade" size="1" /> --------------------- Main Text --------------------- -->

The Russian Labor Market: Recent Trends, launched on July 1, 2009 in Moscow, is a periodic update seeks to improve the awareness of theauthorities, experts and business leaders of the situation and trends in the labor market to contribute toinformed and effective decision-making.

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Yuriy Gerciy
Federal Service for
Labor and Employment <!-- --------------------- Main Text --------------------- -->

The update has been jointly prepared by the World Bank and theFederal Service for Labor and Employment. The update presents indicators produced using variousstatistical sources, including the Federal Service for Labor and Employment, the Federal Service forStatistics, and the Ministry for Education and Science. It presents main findings on current labor marketconditions, including trends in employment and unemployment, use of working hours, wages and regionallabor market disparities.

A special focus of the June update is employment prospects of 2009 educationsystem graduates.

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Klaus Rohland
World Bank Country Director
for Russia

The labor market situation in Russia remains difficult, but it has been stabilizingrecently. By April 2009, the unemployment rate (ILO definition) went up to 10.2 percent,which is 4.2 percentage points higher than a year ago. January-March 2009 was themost difficult period. The first signs of decreasing labor market tension emerged in April,as the number of newly registered unemployed decreased against a backdrop ofstronger growth of vacancies.

The labor market is adjusting to weaker business activity via three major mechanisms:reduced employment, lower real wages, and shorter working hours. Over the last year,employment dropped by 5 percent and real wages by 4 percent, on the average. Inaddition, shorter working hours are now used by businesses on a much larger scale.

Regions vary a lot in their responses to the crisis. In 31 regions, the number ofunemployed registered over the last year since May 2008 has more than doubled whilefor the whole country it increased by the factor of 1.6. In relative terms, regions with amore favorable pre-crisis labor market conditions have been affected more severely.

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Andrei Markov
World Bank Social Programs
Coordinator in Russia

• The labor market situation remains difficult. ILO unemployment continues to grow. Thefall in registered unemployment in April-May 2009 are to some extent related to seasonalfactors.
• The labor market is adjusting to weaker business activity via three majormechanisms: shorter working hours, reduced employment and lower real wages.Wage arrears have not become a common response to the crisis despite a significantincrease by the end of 2008.
• Economy-wide employment contraction accelerated in early 2009. Since April 2008, theeconomy lost 3.4 million jobs or 5 percent of the total number. While lay-offs peaked inDecember 2008, in QI2009 they subsided and have remained stable since then, though at ahigher level than in previous years.
• Real wages have been decreasing since February 2009. A 4 percent decrease in realwages compared to the preceding year is relatively moderate; however the fall is morepronounced in the production sectors.
• Shorter working hours are still used on a large scale following a drastic jump at theend of 2008. A large number of workers were forced to take unpaid leaves. Manufacturingindustries were hit especially hard: up to 25% of all workers were affected by various formsof shortened working time.
• The labor market crisis has most severely hit workers in the industry, constructionand trade sectors. The situation in the power, gas and water production/distributionsectors that used to be relatively safe during the first months after the onset of the crisis hasbeen deteriorating rapidly over the last few months.
• The weaker labor demand is reflected in a dramatic reduction in the number of jobvacancies The total number of vacancies reported to employment services in QI2009 was20-25 percent lower than 12 months earlier.. Unemployment growth and the drop in thenumber of vacancies was associated with a sharp increase in the unemployment/vacancyratio, which indicates the growing labor market tension.
• A positive recent development is a recovery in the number of newly registeredvacancies. in April-May 2009. A larger supply of new vacancies led to some reduction inthe unemployment/vacancy ratio during these months.
• A rise in registered unemployment is primarily driven by increase in urbanunemployment and among men. Indeed, the crisis has affected, first of all, industry andconstruction sectors, which are dominated by male employment. As male prime- -ageunemployment grows, the competition for jobs will intensify, with potentially negativeconsequences for youth employment.
• The crisis has had the strongest impact on economically advanced regions, becauseindustry, construction, finance and trade sectors were hit the most severely. Less developedregions with a high share of agriculture and budget sector employment have been lessaffected.
• The entry of vocational and professional school graduates may cause a significantpressure on the labor market. The graduates of (day-time) primary, secondary and highervocational and professional schools on average will represent almost 2 percent of the workforce, but in some regions they will represent over 3 percent.
• The Government’s Crisis Response Program provides for regional programs toalleviate labor market tensions. Available data suggest that these programs are welltargeted, as more funds are allocated to regions with worse labor market conditions.Regional programs include 4 types of activities: public and temporary works, training,relocation and self-employment support. Priority is given to public and temporary works, with80 percent of all regional spending to be allocated to finance these activities.

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• Klaus Rohland
  The World Bank Director for Russia Opening Remarks
• Yuriy Gerciy
  Head of Federal Service for Labor and Employment of RF
• Andrei Markov
  World Bank Social Programs Coordinator in Russia

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The Russian Labor Market: Recent Trends periodic update is prepared by a World Bank team led by Andrei Markov, Social Programs Coordinator, and by Federal Service for Labor and Employment, led by Yuriy Gerciy, Head of the Service. The team members were: A.Vovchenko (FSLE), G.Betcherman (World Bank), Ivan Shulga (World Bank), Yan Rutkovsky (World Bank), A. Lukyanova (World Bank), L. Valitova (World Bank).

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22233119~pagePK:34370~piPK:34424~theSitePK:4607,00.html

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