24.05.09

Russia is increasingly becoming a land of socio-economic paradoxes. Although GDP and industrial output are falling, unemployment and wage arrears are shrinking.

The Health and Social Development Ministry reported on May 19 that the number of officially registered unemployed has fallen for the second consecutive week. On May 18, the Federal State Statistics Service (RosStat) reported that wage and salary backlogs decreased by 9.5% in April. At the same time, RosStat released information indicating that the state of the economy is getting worse: GDP down by 9.5% in the first quarter, and industrial production down by 16.9% in April.

If statistics are to be believed, it looks like Russia's industrial indicators are rapidly deteriorating - while enterprises and organizations are simultaneously reducing their wage arrears and even managing to find jobs for some of Russia's unemployed. There are only two ways such things are possible: either the official statistics aren't reflecting the real state of affairs (that is, they're simply lying), or the state has put pressure on enterprises and organizations to avoid job cuts at all costs and improve wage payment discipline. The experts we approached for comments say that both situations apply.

It should be noted that in April, RosStat abandoned making monthly reports of jobless numbers according to ILO methodology - which indicates that Russia's actual unemployment rate is three times higher than the number of officially registered unemployed. This happened after RosStat's figures diverged from statements made by Health and Social Development Ministry officials, who declared that unemployment had started to fall. RosStat Director Vladimir Sokolin said that the monthly reports weren't an accurate reflection of reality - but since real monthly measurements would cost a billion rubles a year, RosStat will only release quarterly unemployment figures using ILO methodology from now on.

Robert Smirnov, an analyst with the Yakovlev and Partners law firm, points out that it's been apparent ever since the crisis started that the authorities are attempting to conceal the real state of affairs, to prevent panic among citizens.

Yevgeny Gontmakher, head of the Social Policy Center (Economics Institute, Russian Academy of Sciences), maintains that hardly anyone uses the official statistics for serious analysis. Neither should state pressure on employers be disregarded. Gontmakher says: "Wage and salary backlogs are the worst thing an employer can permit, since he then risks penalties imposed by the state - including criminal penalties. Obviously, this is sure to result in the real picture being distorted."

Maxim Perov, a partner at 2K Audit Business Consulting, points out that by no means all of Russia's jobless actually register at labor exchanges: "The formal slowdown in the rise of registered unemployment could also be due to state pressure on employers, especially in the regions - with reality being tailored to fit required figures. Workers are laid off or switched to part- time employment, so they don't show up as unemployed in official statistics."

AvtoVAZ may be an example of jobs being preserved in this way. It announced a new work schedule on May 19: introducing a five-day working week with one eight-hour shift for assembly of Priora, Samara, Lada 2105/2107, and Lada 4x4 vehicles. There will be a three-day working week for Lada Kalina assembly. This decision is attributed to "the need for strict economizing on production costs while also retaining jobs." Only a year ago, the AvtoVAZ plant was operating with three shifts. The "superfluous" workers will be paid two-thirds of their previous wages for this enforced idling.

Translated by InterContact

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Source: Nezavisimaya Gazeta