Page 18 - RusRPTApr24

Russia’s demographic structure was altered substantially in the post-Soviet 1990s due to a sharp drop in births. With that small cohort now in the workforce and the shift to a wartime economy, significant labour shortages have emerged. Workers in Russia have traditionally preferred flexibility in wages and hours to layoffs or job uncertainty, which has kept labour participation rates fairly stable. In bad times, workers are willing accept lower pay, as well as forego bonuses and wage benefits. When times improve and labour demand rises, wages and other forms of compensation shoot up. The current tightness of labour markets is well reflected in the increased average wage (up 15% in November 2023), while the unemployment rate has plunged to all-time low for the post-Soviet era (3% in December 2023). Unemployment is lowest in industrialised regions in the half of the country closer to Europe. In regions more remote from Europe, particularly North Caucasus Federal District, as well as certain regions in the Siberia and the Far East Federal Districts, unemployment remains well above the national average. About 500,000 of Russia’s 2.2mn unemployed live in the North Caucasus Federal District. According to figures from Russia’s unemployment offices, the number of officially registered unemployed nationally was only about 400,000 last December.
The tightness of the Russian labour market is reflected in last year’s increase in labour force participation to 61.3% (much higher than pre-pandemic levels). The share of part-time workers in the labour force also declined to record low levels in 2023. The drop in part-time work was down by 80% y/y in branches involved in metal refining, metal fabrication and machine-building. Russia’s current economy is running flat-out; it has no extra labour buffer or additional worker pools to draw upon. As a result, the pace of output growth may have peaked. Soaring wage growth, especially in war-related manufacturing branches, has increased inflationary pressures.
18 RUSSIA Country Report April 2024 www.intellinews.com