Coronavirus epidemic provokes rising unemployment and poverty

Hunger, poverty and unemployment: How coronavirus reveals inequalities | COVID-19 Special

According to experts, the number of unemployed in Russia may range from 2.5 to 9 million

Unemployment in Russia during the coronavirus epidemic increased by 29 percent and covers 1 million 660 thousand people, said Deputy Prime Minister of the Russian Federation Tatyana Golikova in her speech to the Federation Council, media reported.

According to the forecasts of the Russian Ministry of Labor, the number of unemployed will rise to 2.5 million. According to the head of the department Anton Kotyakov, the situation «difficult but not disastrous».

However, earlier, the head of the Accounts Chamber, ex-Minister of Finance Alexei Kudrin admitted that the number of unemployed could reach nine million people, and the period of forced inactivity due to the epidemic and its consequences for many will last until the end of this year..

In April, President Vladimir Putin announced a temporary increase in unemployment benefits. Everyone who applied to the labor exchange after March 1, in May-July, will be paid an amount corresponding to one minimum wage (12 thousand 130 rubles). Before that, the unemployed could receive even mere pennies..

In the United States, federal unemployment benefits raised during the pandemic are $ 600 per week. Currently, Congress is considering a draft submitted by the Democrats, according to which the payment of the increased benefit could be extended until January 2021..

Economic Observer Semyon Novoprudsky in the commentary for the Russian service «Voices of America» noticed that the count of the unemployed in Russia – about the same crafty statistics as in the case of deaths from the coronavirus. In his opinion, the real state of affairs in this area is much sadder..

«Because with official unemployment, which has fluctuated in recent years in the range from 4 to 5% of the working-age population, all surveys – even in «peaceful» time before the coronavirus crisis – detected at least 10%, – he added. – Thus, our unemployment rate has always been at least twice as high as according to official data. Among other things, most Russians do not have the habit of registering at the labor exchange, including due to the scanty benefits and inconveniences associated with the need to constantly check in there.».

The authorities take into account only official unemployment, which does not reflect the real picture at all, the observer states. According to him, there are still moments that do not allow trusting the official statistics: «There are a huge number of people in Russia – according to various estimates, from 12 to 30 million people – they are self-employed. Whether any of them are unemployed or not, the state does not know. In addition, in Russia, in principle, it is customary not so much to dismiss personnel as to transfer them to a part-time mode (of course, with a reduction in the size of salaries), which was also practiced during the pandemic».

Of course, unemployment will now increase significantly, believes Semyon Novoprudsky. It seems to him that, with a high degree of probability, at least one third of small and medium-sized businesses will not be able to recover immediately after the end of the epidemic, and all their staff will be left without work..

Coronavirus epidemic provokes rising unemployment and poverty

Senior Research Fellow, Gaidar Institute Sergey Zhavoronkov I agree that Russian statistics on unemployment are greatly underestimated.

«Only those who have officially turned to the authorities for help are considered unemployed in Russia, – he emphasized in a commentary to the Russian service «Voice of America». – So, in accordance with the criteria of the International Labor Organization (ILO), about 20 million people who did not seek help, but at the same time, being able to work, do not formally work anywhere do not fall into this category. In fact, they also need to be taken into account.».

At the same time, Sergei Zhavoronkov noted that simultaneously with the growth of unemployment, the burden on the country‘s budget will increase, and the poverty curve will creep up.

«The problem is not even so much the lack of proper social support. The minimum wage in Russia in terms of US currency is less than $ 200 and is at the level of Ukraine. Given that the per capita GDP in the Russian Federation is three times higher than in the same Ukraine. And this is a deliberate policy of the Russian authorities, which do not want to pay citizens more or less acceptable amounts. People were officially banned from working in connection with the coronavirus, but how can they feed themselves and their families? It is clear that it is impossible to survive on 12 thousand».

Therefore, the number of those who find themselves below the poverty line in Russia will only grow, summed up a senior researcher at the Gaidar Institute..

Coronavirus epidemic drives unemployment and poverty to rise