Almost Half of North Caucasians Work in the Informal Sector, More than Twice the All-Russian Share, Rosstat Says

Paul Goble

            Staunton, May 3 – Rosstat, the Russian state statistical committee, says that 44 percent of those employed in the North Caucasus Federal District work in the informal sector where no taxes are collected or paid, compared to 21 percent of such workers in the Russian Federation as a whole.

            In addition, the statistics agency says, 37 percent of the incomes of people in the North Caucasus come from such employment, compared to 12.3 percent for Russia as a whole, an indication that such informal employment pays less in both places (doshdu.com/pochti-polovina-trudosposobnogo-naselenija-skfo-rabotaet-neoficialno/).

            And Rosstat estimates that as much as 1.1 trillion rubles (10 billion US dollars) in household income in the North Caucasus comes from such informal employment, money that makes up for some but hardly all of the lower salaries and wages in the region and that must be taken into account for any accurate assessment of real incomes there.

            What is worrisome about the release of this data, something relatively rare in recent years, is that it may lead to a new crackdown on the informal sector of the North Caucasus and lead to a further decline in personal incomes there. Such a campaign would be justified in terms of better collection of taxes for public needs.

            But it almost certainly would have the effect of leading to the closure of many firms in the informal sector and thus to a loss of income among an already impoverished population.