Multiple impacts on Russia’s labour market from current recession

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/36

Despite a strong pick-up in inflation, the rise of private sector wages in nominal ruble terms has stayed at a record-slow rate this year. Private sector wages in the first half were up only 6‒7 % y-o-y. Public sector wages, which are feeling pressure to restrain government spending, were up a mere 3‒4 % y-o-y. Wage arrears are up only slightly, however, unlike in the 2009 recession.

Although production in Russia has contracted significantly, the number of people in the workforce shrank only about 0.5 % y-o-y in the first half. The number of unemployed persons increased 10 % y-o-y in the second quarter. Russia’s standard ILO unemployment rate has risen slightly, to around 5.5 %. Under a wider definition of unemployment that includes workers outside the labour force but willing to work, the number of these outsiders has also climbed notably and the wider unemployment rate has approached 10 %. The number of part-time and laid-off workers has clearly increased. In the second quarter, these conditions affected over 3 % of the personnel at large and mid-sized firms. Hours worked per employee were down about 1 % y-o-y in the first half of 2015.

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