Immigrant Workers Make More than Russians Ones but Cost Employers Less, New Study Says

Paul Goble

            Staunton, January 15 – Many believe that migrant workers fill niches Russian workers don’t want and are willing to work for less money than Russians demand, but this is “a myth,” according to a new study prepared by scholars at the Russian Academy of Economics and State Service.

            In fact, the study found, immigrant workers are paid “significantly more than local residents” not only in the capital cities but across the country. Nonetheless, businesses prefer to hire them because with everything taken into consideration, they cost less and make fewer demands on their employers (http://mer-center.ru/_ld/1/169_06-07-2020-vars.pdf).

            The survey was done online, in three languages (Russian, Kyrgyz and Uzbek), and resulted in 977 responses from Kyrgyz and Uzbek migrant workers who reported their incomes over the last several years as well as other details about their work experiences in the Russian Federation.

            The 81-page publication is attracting a great deal of media attention because its conclusions are so at odds with what Russians believe (mk.ru/economics/2021/01/07/zarplaty-migrantov-okazalis-vyshe-chem-u-moskvichey.html and ritmeurasia.org/news--2021-01-15--pochemu-migrantam-v-rossii-platjat-na-tret-bolshe-chem-mestnomu-naseleniju-52784).

            The study explains the difference in incomes between migrants and Russian residents by suggesting that the migrants work more hours and are concentrated in the major cities where incomes are higher. But Aleksandr Shustov, a Rhythm of Eurasia commentator, says that those explanations are insufficient.

            He points to the fact that even in Moscow and other major cities, migrant workers earn more and that they work more should surprise no one because that is why they have come. Instead, he says the higher pay of migrant workers reflects the fact that many never register and so firms don’t have to pay pension and medical contributions or other taxes.

            That means that while the migrants’ take-home pay is greater, they cost the firms less. But that is not the only reason employers are prepared to pay immigrant workers a premium. Such workers have less ability to protest and so cause fewer problems, and for the same reason, the firms bear less responsibility for anything that happens to them.

            It is certainly true, of course, Shustov continues, that migrant workers are prepared to work more hours than Russians are. After all, they are in country only for the money. And that allows employers to have them work without getting overtime compensation and without regard to laws about the number of hours employees are allowed to work.

            “The readiness of business to pay labor migrants higher pay is leading to the driving out of the labor market of the indigenous population,” the taxes and social contributions of which businesses have no choice but to pay and makes the latter uncompetitive as far as the business community is concerned.

            “In certain branches,” Shustov argues, “such as construction … and agriculture, this is leading to the formation of a ‘migrant-dependent’ economy, one that is capable of functioning without migrants only with difficulty. As a result, the government doesn’t receive taxes and the money migrants earn flows out of Russia into the CIS countries.”

            That could be changed by eliminated the visa-free regime among the countries involved or by tightening digital control over employers. Because the first would have a negative impact on inter-state relations, the Rhythm of Eurasia writer says, the Russian government is more likely to choose the second if it does anything at all.