Unemployment Rate in Russia

The unemployment rate is a value that can be expressed in terms of a fraction, where the number of the unemployed will be in the numerator and the sum of the number of people employed at the time of calculation and the unemployed in the denominator. So, natural unemployment is defined as a percentage. It is often calculated as the average for the last ten years over the country with forecasts for the next decade. For our country, it is difficult to find reliable statistical calculations for such a distant future, since the Russian economy is closely linked to world oil prices. And history has shown (2008–2009) that there is a very high correlation between unemployment in Russia and energy prices. In order to understand more precisely how this indicator is defined, it is worth considering what the concepts “unemployed” and “employed” (in labor processes) mean.

unemployment rate

Who is not in the labor force?

When the unemployment rate of the population is calculated, the number of people who do not belong to the labor force is subtracted from its total number.First of all, these are schoolchildren, prisoners, disabled people and persons in psychiatric institutions, housewives and pensioners, full-time students, tramps, as well as those who despaired of finding work and stopped her search. In addition, the working-age population often does not include military personnel who serve, but do not work, but in accordance with Russian legislation, this group of the population is also among the employed (Federal Law number 1032-1, adopted in 1991, April 19). As of the end of 2014, about 1 million people serve in the Russian army, and about half a million in the American, for example. Therefore, the inclusion or exclusion of the number of military can in some way affect the calculation of the level of lack of employment for the population.

Different standards for calculation

An employed person in global practice is recognized to be the person who is already directly involved in the work process, or those who do not have work, but are looking for it and are ready to start it immediately. In Russia, in order to calculate the unemployment rate, take into account persons from 15 to 72 years old, in the global practice, a person from 10 to 75 years can be recognized as unemployed (according to the definition of the International Labor Organization).

unemployment rate in Russia

All workers are counted

When counting employees, all people who have a job are counted, even if they are on vacation, are ill, are on strike, work part-time or part-time. This, according to the above-mentioned regulatory act of the Russian Federation, includes both individual entrepreneurs, and notaries, and those who have been approved for some position with payment, as well as members of farms and founders of organizations who have the right to receive income from their activities, etc. Included in the number of workers and persons working in branches and representative offices of foreign companies in Russia, which in connection with the crisis of 2014-2015. reduce the scope of their activities, dismissing well-paid lawyers, financiers, accountants, information workers, etc. A possible wave of reductions that will only increase current unemployment rates, is also waiting for the banking sector due to an increase in household debt, a fall in banking sector profits.

Types of unemployment

The unemployment rate can be calculated both as a whole for a particular country, and for regions, administrative units.For example, in the Caucasus today unemployment is about two times higher than the average for Russia (about 10 percent versus 5.2%, respectively). It is of several types, among which are the following:

  • Open and hidden. The latter is characterized by the presence of formal labor relations with the employer in the absence of work as such. The hidden nature of this phenomenon manifested itself massively after 1991, when the population was listed in factories, but it did not work and did not receive a salary of several months. Today, the hidden unemployment rate in Russia is high in the Far East, where, due to the remoteness of the region, many enterprises keep workers “just in case” in the lower reaches of the Don and the Volga, in the North Caucasus. It is minimal in the capital, in St. Petersburg, in the urbanized areas of the Urals and Siberia.
  • General, regional, sectoral (by degree of coverage).
  • Real and registered officially (by depth of accounting).
  • Cyclic, seasonal, frictional or structural (due to the cause of occurrence).
  • Ethnic, sex-age (more often female, youth), professional or among people who are not socially equipped (by the composition of people left without work).

unemployment rate is

Progress causes job cuts

Specialists who study how the unemployment rate changes often pay attention to non-working conditions that have arisen for one reason or another. Here we consider the seasonal factor, which most often occurs in agricultural enterprises in the period after harvest. The structural model of the lack of employment in the workplace is mainly associated with technological breakthroughs that change the demand for labor in general or its structure.

actual unemployment rate

Structural unemployment is almost always present in a market economy, because often a product ceases to be in demand because of, for example, a more functional counterpart or a new fashion trend. Such unemployment is of a forced nature, as under the influence of scientific and technological progress, people who have lost their jobs need time to retrain, to acquire new skills. Structural unemployment is characterized by a long period of liquidation.

The relationship of unemployment and GDP

Frictional unemployment is a phenomenon of a more voluntary nature, when people become unemployed in order to find more favorable working conditions.The most difficult (in terms of causes) is a cyclical variant that affects all areas and is associated with a decline in production. In this case, many enterprises go bankrupt, millions of people are left without jobs and the prospect of finding a job when retraining or moving, even sometimes to another country, in the event of a global crisis. In Russia, for example, in 1992-2004. the duration of unemployment doubled on average and amounted to about 9 months, during which people were looking for a decent job. A cyclical pattern of employment problems affects real GDP. It is calculated (by H. Ouken) that if a country loses from 2 to 3 percent of GDP in relation to the assumed one, then the actual level of unemployment increases by one percent in relation to the natural one.

unemployment rate 2014

Less unemployed among those who have not graduated from high school

The unemployment rate in Russia after the collapse of the USSR fluctuated, according to official data, from about 5 percent in 1992 to 13.2% in the post-default period in 1998. Unemployed people are most often those with complete secondary education or secondary vocational education, while fewer unemployed are observed among people with primary vocational education and higher education.The least unemployed, according to research, was found among those who enrolled in a university, but did not graduate. When considering age categories, it can be noted that most of all those unemployed are among young people aged 20 to 29 years old, especially in rural areas.

In Russia, things are not so bad compared to even Europe

In Russia, the unemployment rate (2014) as of the last months of the year was about 5.2 percent, which is less than in 2011 and 2013, but more than in 2012 (5.1%). This is a good result, since in our country this figure is lower than in England, the United States, Sweden, Saudi Arabia, and others, not to mention such countries as Greece, Spain, and South Africa, where almost every fourth was left without work as a result of the crisis a citizen. We give in to countries like Japan (3.5%), where it’s economically unprofitable to employ foreigners (they have to pay more under the law than their compatriots), so the Japanese employment rate is very high, as well as to Singapore (1.9%) Denmark, Norway, Hong Kong and several other countries.

unemployment rate

As of spring 2015, the unemployment rate is about the same 5 percent.However, the Ministry of Economic Development predicts an increase of this indicator to 6% by the end of the year due to the increased vulnerability of small businesses due to the limitation of credit resources and the rising cost of imported production components due to an increase in foreign exchange rates. In general, mass layoffs, as it should be, will not be, since support is planned for the main industries through various kinds of investments.

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