Russian Businesses Refuse Putin’s Demand They Pay Employees who are in In-Home Isolation

Paul Goble

            Staunton, April 7 – The assumption that when Vladimir Putin gives an order, Russians do what he says is breaking down, Finanz.ru reports, with “Russian companies in large numbers refusing to fulfill his directive” to continue to pay employees who are not working this months because of isolation measures to combat the pandemic.

            “More than half of entrepreneurs do not intend to pay” such people, according to a survey conducted by the Center for Strategic Planning, with 29 percent saying they’ve already sent workers on unpaid leave and another 22 percent saying they plan to do so shortly (finanz.ru/novosti/aktsii/biznes-otkazalsya-vypolnyat-trebovanie-putina-ob-oplate-nerabochikh-dney-1029072311).

                Having lost much of their incomes and not having been given the right to ignore taxes or not pay rent, “business is cutting expenses on personnel,” the portal says. “Every fifth company (21 percent) has reduced pay, and an additional 31 percent intend to do this in the immediate future.”

            They have no other choice, Finanz.ru says. “28 percent of the respondents said that they are at the brink of bankruptcy.”  More than 15 million Russians and their families are thus at risk of losing their incomes, four million of them in trade, and a million or more each in construction, logistics and the service sector.

            One bar owner told Reuters, the Russian portal reports, that the powers that be “tell us to pay wages and salaries but with what we are supposed to pay these, no one says anything.” Businesses are losing money rapidly, and one businesswoman warns that “in the past, the proletariat made a revolution” because of that.

            Putin has promised to reduce the insurance payments by small businesses from 30 to 15 percent of the wage bill, but “this won’t help it survive,” the bar owner adds. A moratorium on rent would but no one in the government is proposing that, despite the fact that 250 small business owners have petitioned the powers that be.

            What is most infuriating in the current situation, Aleksandr Razuvayev of the Alpari Analytic Center, is that the business owners now suffering most of all are “those who all the previous years used their profits and loans for development and consequently for the creation of new work places and the growth of the tax base.”

            Those who played by the rules, paid their taxes and didn’t hide things from the government, are now paying the highest price and yet the government is quite prepared to try to order them about, he continues. At the same time, those who pulled money out of their companies for their own well-being and operated in the shadow economy are doing fine.

            Moscow Carnegie Center analyst Andrey Kolesnikov says that this resistance and opposition is coming at a difficult time for Putin. “He has just lost this class which at least partially had supported him” in the past.  “And most likely, they will not support him in the future.”