09.03.09

According to the Russian Federal State Statistic Service (Rosstat), in January 2009 salaries in real terms (adjusted for inflation), if compared to salaries for January 2008, dropped by 9% on average, to 15.2 thousand rubles. Compared to December 2008, Russians received 27% less in salaries. The director of the Institute of Social Policies believes references to over 25% decrease in salary levels to be unrepresentative: “In December (2008) people received end-of-the-year bonuses. Also, there are fewer work days in January, and many salaries are calculated based on work time." Production halts by large companies also affected the statistics.

The wage reduction was accompanied by a rapid growth in utility prices (14.4% compared to 11.8% in January 2008), ticket prices for commuter trains (10% compared to 8.5% in January 2008), and other services.

As a result, real disposable income (after taxes and deductions) in January 2009 was 6.7% lower than in January 2008. These statistics could be even worse: they are boosted by growing federal pensions and rising salaries to state employees that were taken into account by Rosstat, as is explained by Igor Polyakov, leading expert of the Center for Macroeconomic Analysis and Sort-Term Forecasting. In real terms, compared to January 2008, pensions grew by 9%.

Specialists expect the private sector to start adjusting salaries according to inflation. Pensions and salaries of state employees will continue to grow. Therefore, the poverty rate on country average will not grow. The current crisis is different that of the 90-s, when state employees often lived below poverty level. According to experts, we are currently experiencing an employment crisis, not an increase of poverty.

During October-January, the number of officially registered unemployed grew by 50%. Due to the current crisis, the Ministry of Health and Social Development is intending to significantly adjust quotas foreign workers. Vice-prime minister Alexander Zhukov announced that migrant workers who lost their jobs will be immediately sent back to their home countries. Ministry of Health and Social Development explains, “Regional authorities claim that the non-prestigious jobs earlier occupied by migrants from former Soviet republics, now are looked on more favorably by Russians. Decreasing the migrant work force in Russia's regions hopes, in part, to open vacancies to be filled by Russians.”

However, according to Elena Turukanova, head of the Center of Migrant Research, the number of vacancies opened will still be limited. The bulk of migrants were occupied in the construction sector, and there are no vacancies there. The decision to deport migrant workers is a political one (migrants are often associated with criminal activities), and will not have a direct effect on the labor market. Foreign workers employed by the reduced quotas will continue to work in housing and public utilities and sales sectors not favored by Russians.

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Source: Rbc