Monday, May 25, 2020

By Refusing to Take Unemployment Seriously, Kremlin ‘Deprives People of Hope and the Economy of Prospects,’ Inozemtsev Says

Paul Goble

            Staunton, May 24 – Russian government statistics on unemployment now given the pandemic lockdowns and economic crisis are laughable, a reflection of the unwillingness of those in charge recognize how large a problem it is, and understand how much assistance to those without jobs can help the country, Vladislav Inozemtsev says.

            According to official data, the Russian economist says, the number of unemployed in Russia rose from 663,000 at the start of the year to 1.6 million now, a figure that trade union leaders say is nonsense given the shutdown of many employers. They argue that the real number is about 10.6 percent of the workforce (

            Inozemtsev says that estimate is convincing given that many trade outlets which employed 13.7 million Russians are now closed as our many construction projects where 6.3 million worked. Moreover, restaurants and hotels which employed 1.8 million are now operating if at all in a much-reduced state, and cultural and sports activities, which employed 1.1 million, are also mostly shuttered.

            While Western countries have simplified registering as unemployed so that assistance can get into the hands of those who need it, Russia continues to make it difficult to gain that status and almost impossible at a time of lockdown because those without work cannot move about to get all the signatures and certifications required.

            The problem of unemployment is “so important,” he continues, “because the Russian labor market is extremely unique.  Forty-four percent work for the government or government -financed firms, 1.5 percent work in the raw materials sector, and just over half work in the private sector.

            The current economic crisis has hit all these groups. If Russians who have lost their jobs because of the pandemic and associated economic crisis, were provided with government assistance so that they could continue to purchase goods and services, as is the case in the West, the crisis would have been shallower and shorter than it will be without such aid.

            That is a lesson about unemployment that most governments have learned. Maintaining final demand is critical. “If the government doesn’t want to give money to the poor, it could at least give it to those who have lost work,” Inozemtsev says. But it is in denial about the importance of providing such assistance.

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