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. Last Updated: 07/27/2016

Jobless Total Soars 50% Since January

Unemployment in the Russian workforce has soared by 50 percent since January and is expected reach 3 million by the end of 1994, the Federal Employment Service said Monday.


Official unemployment has risen to 1.58 million, or 1.6 percent of the country's workforce, from 1.08 million during the first seven months of 1994 and is expected to grow to between 2.5 and 3 million by the end of the year, said Igor Lukashov, spokesman for the service.


The rise, although dramatic, falls within government forecasts for 1.5-3 million jobless by the end of 1994, he said. It also suggests that much-publicized bankruptcy procedures that came into effect for the first time earlier this year have yet to bite and create the massive layoffs that some have predicted.


Lukashov cited Russia's sharp production decline for the relatively rapid increase in unemployment and cuts in military staff. Russia's industrial production fell 28 percent in the first six months of the year, according to state statistics, following an even sharper decline last year.


"The production decline has finally forced managers to launch mass layoffs," he said. "And this is why it is much more difficult for graduates to find a job today."


Lukashov said that the North Caucasus republic of Ingushetia and the textile industry regions of Ivanovo, Yaroslavl and Pskov were the hardest hit by unemployment, with their jobless rates ranging from 5 to 8 percent.


The official unemployment rate does not include workers on unpaid or partly paid leave. Experts suggest that such "hidden" unemployment would bring the actual figure closer to 5 million unemployed, or about 5 percent of the workforce. President Boris Yeltsin's representative in Ivanovo recently estimated real unemployment in the area at 20 percent.


Some officials and labor experts have predicted that up to 15 million people could be out of work by the end of 1994 if the government's bankruptcy program is fully implemented.


So far, however, the government has initiated bankruptcy proceedings against fewer than 100 companies, most of them small, which Lukashov said had not significantly affected unemployment levels. "The bankruptcy mechanism does not seem to be working so far," he said. Responding to criticism that the government has failed to prepare for the social impact of rising unemployment, Lukashov said that the government has put some 130,000 workers through retraining programs since the beginning of the year.


Earlier this month, the World Bank approved a $70 million loan to the Federal Employment Service for training programs, but the loan has yet to be disbursed, says Charles Blitzer, chief World Bank economist in Moscow.


Lukashov said that the most popular retraining program among men was a course in management, while women had shown a preference for traditional Russian handicraft. He said that about 3,000 of those who had completed a three- to six-month course on business basics had already set up private firms.


Traditional handicrafts also proved profitable for the women, he said.


"They quite often pick lace weaving, and I know at least one factory in the Ryazan region where formerly unemployed women are making lace and selling successfully to other regions."


But Lukashov added that most job openings were neither for lace-weavers nor for managers: "About 85 percent of all our job openings are for a quite unskilled workforce -- say, road construction workers."


Using its offices across Russia and widely distributed job opportunities bulletins, the employment service has found jobs for 564,000 people in the first seven months of the year, he said.


Russia's unemployment benefits differ from region to region, but must fall between the minimum and average salary in a given region, according to Lukashov.