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. Last Updated: 07/27/2016

Factories Put Stimulus Cash to Work

Of the 300 workers employed at a gear-cutting machine plant in the Saratov region, only 17 are working exclusively in the jobs they were hired to do.

The other 273 are picking up debris and garbage that have piled up around the plant over the years, rearranging furniture in the administrative building and providing long-neglected maintenance services on the plant's grounds.

And it's not the plant that is paying those 273 workers to tidy up — it's the government, as part of a 44 billion ruble ($1.4 billion) employment stimulus program launched in January.

The anti-crisis package is aimed at tempering the country's mushrooming job-loss rate. But even as federal funding trickles down the pipeline to 82 regional employment services, unemployment remains at its highest level in almost a decade.

The State Statistics Service said last week that the country shed 200,000 jobs in April, bringing unemployment up to 7.7 million, or 10.2 percent of the work force. Nevertheless, Prime Minister Vladimir Putin has said new data for May show that the job stimulus program may be beginning to bear fruit.

Beneficiaries of the program don't hesitate to agree.

Sergei Mainov, head of human resources department at the Saratov plant, Heavy Gear-Cutting Machines, said the plant would have had to undertake a second round of mass layoffs without the federal funds for public works.

"The regional employment program's money isn't much, but we are grateful we applied for it. It enables us to keep our workers employed and gives us a chance to do maintenance and clean-up work around the plant that we never had time or energy to do before," Mainov said in a telephone interview.

Mainov said employees receive the maximum stipend per month — 2,160 rubles ($67) after taxes — to work four hours a day cleaning up around the plant.

"It is a paltry sum, but at least it partly compensates them for the money that they are no longer receiving from the factory," he said.

The workers also get to collect unemployment payments.

4-Part Stimulus Program

The creation of more than 1 million temporary jobs in public works across the country is one of the goals of the government's four-pronged job stimulus program. Its three other components include putting 173,000 workers through re-training and education programs; helping 56,000 unemployed workers open small businesses; and offering relocation services to 15,000 unemployed workers who have secured work in other parts of their region or in another region.

The Saratov employment service, which has access to up to 325 million rubles to fight unemployment this year, said public-works jobs are the most popular of the four components of the program.

"The most expressed interest from individuals and companies has been to participate in public-works projects because it gives unemployed citizens supplemental income on top of their unemployment checks as they search for new work," the service said in an e-mailed statement.

As of mid-May, the Saratov service had created nearly 8,000 new public-works jobs in 413 public and private organizations. Slightly more than 1,000 jobs were in municipal service projects like road repairs and cleaning up and painting public buildings. Fifty-nine percent of all participants were facing imminent layoffs at their companies, the service said.

The crisis has hit big and small companies alike, and even industrial giants such as Metalloinvest, the iron ore and steel producer owned by billionaire Alisher Usmanov, have pointed their subsidiaries toward regional employment services for help.

This month, funding from the Kursk employment service enabled Mikhailovsky GOK, a Metalloinvest mining company in the Kursk region, to create 179 temporary jobs — 35 white collar, 144 blue collar — for unemployed workers and recent student graduates, the company said.

"Temporary employees are to carry out auxiliary works on maintenance equipment, clear railroad tracks and assist with documentation control," the company said in a statement.

It said the partnership with the regional authorities would create 212 new jobs this year.

New Entrepreneurs

The project to help unemployed workers open small businesses is also picking up steam.

In Tatarstan, 4,000 of the region's 61,000 workers who have registered as unemployed have expressed interest in starting their own businesses, and 713 have gone on to actually register new businesses, the region's top employment official, Airat Shafigullin, told The Moscow Times.

In March, Erik Saifutdinov was one of those 4,000 unemployed. But three weeks ago, he was back in the work force when he opened the doors of Busenka, his new bead and jewelry shop.

Saifutdinov, 25, said he lost his job in the marketing department of a pharmaceutical company in January. He spent two months scanning lists of available positions on the walls of the unemployment service, but nothing panned out.

"Everyone overstated on job advertisements the amount that they actually were willing to pay, so I didn't end up working anywhere," Saifutdinov said.

Then in March, an employment service employee in Kazan, the region's capital, asked him if he would like to apply to a program that gives unemployed workers the opportunity to receive a one-year advance on their unemployment checks — worth 58,800 rubles ($1,840) — under the condition that they use the money to open a business.

"I went home and talked to my wife about opening a shop to sell the beads and jewelry she makes by hand at home. It's just a hobby of hers, but we thought we could make a successful business out of it," Saifutdinov said.

Saifutdinov returned to the employment service within a week to submit his business plan and fill out paperwork, but he didn't receive the advance until two months later, after his shop had already opened.

"I ended up having to front the start-up money myself, because I needed to pay to reserve the store space with the building's landlord in April. I also had to pay for advertising materials," Saifutdinov said.

Luckily, Saifutdinov had some savings, and the two-month wait for the money didn't dampen his optimism.

"We're not breaking even yet, but we hope to soon," he said. "I'm just glad that this opportunity came along. Before the crisis, I never would have thought I could be a business owner."

But Saifutdinov's bead store does not reflect the type of enterprise that most unemployed Russians are choosing to set up with their unemployment-check advances. In Tatarstan, 77 percent of those who have already opened a business are working in animal husbandry — buying, raising, breeding and selling animals. Others are buying tools and starting up their own car repair shops or taxi services.

In the region of Belgorod, where the black soil is known for being extremely fertile, most of the 20 people who have received funding have turned to agriculture.

"Many people bought carts or farm stands, equipment that they need to sell the produce they grow," said a representative of the Belgorod employment service.

State Keeps Watch

The lion's share of the regional anti-crisis employment programs are funded federally, with regional coffers chipping in about 5 percent of the total cost. And the Health and Social Development Ministry, which oversees the regional programs, is keeping a careful eye on how the money is being spent and the effectiveness of the programs, said a ministry spokeswoman, Yevgenia Kokoreva.

"The regional employment services have so far only received 40 percent of the total federal funds. Before they get the rest of the money, they must produce detailed reports on their activities and show their progress and how the labor market is developing," she said.

"If they need the rest of the funds, they will receive them. But we hope they can turn the situation around with just 40 percent and the regional contributions," Kokoreva said.

Tatarstan filled about half of the 55,000 temporary public-works jobs that it hopes to create for the unemployed and those under risk of layoffs, said Shafigullin, the republic's employment official.

"Most of them are working to clean up and do repairs on their companies' territories," Shafigullin said. "About 23 percent are working to repair and construct municipal infrastructure."

The Altmetevsky Pipe Factory is one of the nearly 1,000 companies in the region that has jumped on the public-works bandwagon, a move that allowed it to retain 49 workers who would have otherwise been let go in March.

The factory's territory includes a sanatorium and a resort, where workers could relax and get health treatments free of charge during Soviet times. Now, the factory's sanatorium accepts private clients, but most stopped coming once the crisis hit.

"Visits to our sanatorium became less and less frequent after the new year. Fifty people worked there, but we could no longer pay them," said the factory's head of personnel, Amir Egamov.

"So when heard about the state funding that would pay workers to do public works, we applied," Egamov said. "Now, our workers make 4,000 to 7,000 rubles a month to take care of veterans and orphans whom we have invited to come get treatments and relax at the sanatorium."

Egamov hopes that the funding will continue until at least September, by which time he hopes that the economy will recover and old clients will start returning.