Unemployment outlook dims as market players look for response
10 million jobless, that's the most pessimistic forecast for Russia by the World Bank.
But most experts say things won’t get that bad – although the rapid increase in the unemployment rate in Russia has been an unpleasant surprise for President Medvedev.
“The unemployment rate that we had expected by the end of the year is already here. Nearly 2.2 million jobless have been registered and real unemployment is growing at a rapid pace."
The state is planning to spend over $2 billion to help the jobless. Some unemployed workers will be moved to other regions to find work, whilst others will take part in public work programs.
Russia's vehicle makers are already working short weeks. GAZ is retraining its workers whilst still paying 60% of their salaries. Tatiana Maleva, Director of the Independent Institute for Social Policy the policy will help minimize unemployment, but leads to inefficiencies over the longer term.
“Russian employers tend to keep staff at any cost by cutting working days, by reducing salaries. Of course, that’s restraining an increase in poverty. But at the same time it preserves inefficient working places and low productivity, which is actually the Achilles heel of our economy.”
Market watchers say many employees will have to change their profession to stay in work. Secretaries, managers and PR specialists are all suffering a big drop in demand, and a Elena Balakhontseva, HR Director at Moscow cheese maker, Karat, says its $1000 average monthly salary may now attract professionals from other sectors.
“During the last crisis we had some PhD holders working here at conveyor belts.”
Industrialists say that so far not many white collar workers turn labouring work. But that could drastically change depending on how much worse the crisis gets.