If Pension Age is Raised, Russian Unemployment will Jump and Older Workers will Suffer, Experts Say

Paul Goble

            Staunton, May 1 – Actual unemployment in Russia is already close to 10 percent, twice what officials concede (kasparov.ru/material.php?id=5AE0D8975BBD8); but if as seems increasingly likely, Moscow raises the retirement age, unemployment will skyrocket and become truly horrific, according to experts.

            But the overall unemployment figure will pale compared to that of older workers who already find it difficult to compete for jobs requiring more technological savvy and now will not be able to get a pension until much later.  They will suffer more than other groups, and the government needs to take measures to help them, specialists say.

            Moscow economist Andrey Gudkov tells Irina Khmara of Svobodnaya pressa that if the pension age is increased as now seems likely, “the unemployment problem will become more serious: there will be more people seeking jobs, pay will drop, and the basis for social protests and labor conflicts increase (svpressa.ru/society/article/199218/).

                Moreover, he says, raising the pension age in Russia is “in sharp conflict with the idea of accelerating technological progress and the construction of a digital economy.”  The experience of France in the 1990s is instructive, Gudkov says. There young people often couldn’t find jobs until their late 20s, and the economy didn’t benefit from their advanced technological skills.

            “The very same thing can happen in Russia as well,” the economist suggests.

            Already now, he points out, “half of the graduates of higher educational institutions can’t find work in the professions for which they were trained.” They don’t get jobs that they could if older workers were able to retire sooner and thus can’t contribute to the technological development of the Russian economy.

            Russia must boost its unemployment compensation, Gudkov say, or face a social explosion if the retirement age goes up.  In Europe, unemployed people receive 40 percent or so of their employed incomes. But in Russia, that figure is ten percent, something no one can live on for long.

            Official claims that unemployment now is five percent can’t be believed, he continues. Not only is the rate higher but it ignores the fact that without social supports, many Russians are forced to take jobs outside of the fields they are prepared for in order to have some income. That imposes an enormous social cost on the society.

            If one measures unemployment in terms of the jobs people are prepared for but can’t get, it is already “colossal,” Gudkov says.  And he points out that there is a reason for significant underreporting of the real rates here: “Many agree to work without entries in their work books because they consider work below their qualifications as something shameful.”