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. Last Updated: 07/27/2016

ILO Scorns Official Jobless Statistic

GENEVA -- Russia's low official unemployment figures, widely accepted in the West at face value, are masking a growing crisis in the Russian labor market, the International Labor Organization said Monday.


The United Nations agency said an official figure of around 1.6 percent jobless was five times too low and more than a third of Russian workers were now in "suppressed unemployment."


"It really is an absurdity that the situation is not receiving the attention it deserves," labor organization specialist Guy Standing told a news conference.


According to figures in the latest ILO study of the Russian labor market, some of which come from the agency's own surveys and some from the State Statistics Committee, total industrial employment fell 8 percent in the past five years.


But the drop in employment and the rise in open unemployment had been masked by factors that left hundreds of thousands of Russians in work but without actual jobs or real pay.


According to the ILO study, more than 15 percent of those in work were on extended "administrative leave," either unpaid or only partly paid.


Averaged out, another 6.8 percent of labor was unused because of production stoppages and 12.3 percent of the workforce worked short-time.


Another phenomenon was that women were being put on extended and unpaid maternity leave -- even though fertility rates in Russia had tumbled since the collapse of the Soviet Union.


Standing said factory bosses apparently encouraged the suppressed unemployment to get out of paying severance pay of two to three months' salary to workers they had laid off.


The workers were prevented from registering for minimal jobless benefits because they were still officially in work, but they were unable to quit because they would then lose any hope of either benefit or severance pay.


About 15 percent of workers were caught in another trap. Factories kept a small minority at a rock-bottom wage of around $20 per month to keep down the average company wage bill and avoid new taxes. The average wage is about $80 to $100.


But Standing said there had been a desire on the part of international institutions -- and especially on the part of self-declared "advisers" to the Russian government -- to take the official unemployment figures at face value.


Another myth was that real Russian wages were rising. Standing said that although contracted wages had shown an increase, too many Russians were simply not being paid on time. Factories were paying their staff four or five months in arrear, by which time inflation had taken its toll on their wages.


Standing advocated a wide range of piecemeal measures to deal with the problem, including forcing Russian employers to honor their contracts with workers.


Among the raft of statistics presented, Standing said one told the whole story -- life expectancy for Russian men had fallen to around 58 years from 65 in seven years.


"A lot of people are very complacent and smug about the reform process in Russia ... the biggest, most revealing statistic is that life expectancy figure," he said.