In the Thick of It

A blog on the U.S.-Russia relationship

Many Russians Expect to Lose Jobs, Take Pay Cuts in Wake of Pandemic

May 21, 2020
Thomas Schaffner

Almost half of Russians expect layoffs within their household in the coming months and almost one-third have already had someone in their household recently fired, according to poll conducted April 26-28 by Russia’s most respected independent polling organization, the Levada Center. Moreover, more than a third of the poll’s respondents said they or their family members have already experienced pay cuts (see table 1). In contrast, when surveyed by Levada in October 2019, only 14 percent of Russians reported recent layoffs in their household, and 27 percent were expecting to lose their jobs in the near future (see table 1). Since October, the shares of respondents suffering from pay cuts and wage arrears have all increased dramatically. Respondents experiencing wage delays increased from 13 percent in October to 25 percent in April, while the share of those who saw their wages cut went from 14 percent to 32 percent in the same period of time.

Respondents living in large cities reported higher levels of layoffs compared to those living in rural locations or small cities. Some 30 percent of respondents in Moscow and 31 percent in other cities of over 500,000 people reported layoffs within their household, compared to 22 percent in cities with a population under 500,000, 25 percent in those under 100,000 and 23 percent in rural areas (see table 2). Likewise, 62 percent of respondents in Moscow had already experienced or expected wage reduction in the coming weeks and months, compared to 52 percent in cities with under 100,000 people and 46 percent in rural areas.

While the pandemic did not feature explicitly in Levada’s April 2020 questions, it is well known that the confluence of the virus and the sharp decline in oil price have hit Russia’s energy-dependent economy and the workers it employs hard. In the first quarter of 2020, which saw only the beginning of the COVID-19 outbreak in Russia, Russia’s GDP grew by 1.6 percent, according to state statistics agency Rosstat. However, according to data from Russia’s Finance Ministry’s monthly budget update, Russia’s GDP in April 2020 shrank by over a quarter, 28 percent, compared to April 2019. According to an IMF report, Russia is expected to experience a GDP contraction of 5.5 percent in 2020. Meanwhile, as of April 25, International Labor Organization figures had Russia’s unemployment rate at 4.5 percent, according to Audit Chamber head Alexei Kudrin. However, since the start of the pandemic and the implementation of Russia’s non-working period on March 25, Russia’s unemployment rate has increased by 30 percent to nearly 1.7 million individuals, according to Tatyana Golikova, Deputy Prime Minister for Social Policy, Labor, Health and Pension Provision. Some estimates suggest that the unemployment rate may double, leaving as many as 9 million Russians unemployed due to the crisis.

The impact of the pandemic and falling oil prices has not been equal across all sectors of the economy, with the private sector reporting twice as many layoffs, two and a half times as many wage reductions and three times as many wage delays as the public sector (see table 3). Respondents in the public sector were also much more confident about their future, with 66 percent reporting that they “do not think [layoffs] will happen in the near future,” compared to 44 percent in the public sector, according to Levada’s analysis of the April poll results.

Thomas Schaffner is a student web assistant with Russia Matters and a graduate of American University.

Photo shared under a Pixabay license.