IS RUSSIA REALLY BECOMING A THIRD WORLD COUNTRY? UNEMPLOYMENT RISKS IN THE TIME OF POST-SOVIET RESTRUCTURING
Vladimir Rukavishnikov, Moscow

• 1. Introduction
• 2. Unemployment in Russia: The General Outlook
• 3. Public Perception of the Threat of Unemployment
• 4. A Case Study of Long-term Unemployment in the City of Tver2
• 5. How to Cope with Unemployment?
• 6. The Dispute on Governmental Guarantees for Job for Everybody Who Needs One
• 7. Concluding Remarks
• NOTES
• REFERENCES

[page-number of print edition: 118]

IS RUSSIA REALLY BECOMING A THIRD WORLD COUNTRY? UNEMPLOYMENT RISKS IN THE TIME OF POST-SOVIET RESTRUCTURING
Vladimir Rukavishnikov, Moscow

1. Introduction

Since the collapse of the communist political regime in August 1991, a large range of governmental reforms have affected the national economy of Russia. They are usually introduced by the term 'restructuring'. It includes changes such as privatisation of the former state-owned enterprises, liberalisation and deregulation of the labour market. Macro-economic and financial stabilisation is part of the plan too. Many of these changes are elements of well-known structural adjustment packages used by the International Monetary Fund in Third World countries.

One may argue that measuring the success of restructuring depends on where somebody’s social and economic position is situated. The creation of market-type economy was announced as the goal of reforms, because economic restructuring was closely linked with other components of the reconstruction of the entire political, economic and social systems of Russian society. Experts associate progress in the transition to free market economy in Russia with the rapid privatisation of property out of state control, and with the growing connection of Russian economy to the global financial networks. The fast and large-scale privatisation was an action that over-killed the former socialist economic order and the old way of state management of the national economy. But it did not bring about the expected rise of Russia's GDP. Restructuring in post-Soviet Russia, like in many Third World countries, brought economic decline in its wake.

The official statistics reveals that the transition to market economy results in a great decline of the living standard of the

[page-number of print edition: 119]

bulk of the population. After correcting for inflation, the average real disposable income of Russian households declined over 62 percent between 1990 and the beginning of 1999. The emerging of few percents of really rich people notwithstanding, the predominant part of the nation consists of poor people, and the living standard for the majority is still far below what they had before the fall of state socialism.

However, it is fair enough to say that restructuring in post-Soviet Russia was initiated as a response to an economic crisis, which symptoms had become tangible by the end of the so-called perestroika period. Russia's industrial and agricultural production and the purchasing power of the Ruble began stagnating in the early 1980s. Despite all structural reforms, in the 1990s they have drifted downward ever since.

One difficulty in tackling this theme should be touched upon right at the beginning. The hardships of unemployment, the rising cost of living, and similar difficulties seem inevitable in capitalist economies. Many economists devote their lives to the study and to the search for solutions to these problems. However, sociologists feel that the economists' approach has its limits, and cannot yield genuine and comprehensive understanding of the above-mentioned problems. They can be understood only in their broad social and political context. It makes no sense to study unemployment and other economic problems of transitional societies apart from their social and political backgrounds.

Together with the official statistical information and the results of nation-wide surveys, the empirical basis of this paper is formed by the data of the survey of the long-term unemployed in the city of Tver, carried out under the auspice of the author in December 1998-January 1999. The sample size was 300 respondents who were registered by the Tver city Department of the Federal State Employment Service as long-term unemployed.

The city of Tver is the administrative centre of the Tver region and might be considered as a typical big Russian industrial

[page-number of print edition: 120]

city. Therefore, we can tentatively generalise some conclusions drawn from the analysis of data collected in this city to the situation in other big Russian cities and, at least to some extent, to the country as a whole.

2. Unemployment in Russia: The General Outlook

What often surprises the outside observers of the Russian transition to market economy is how few people are officially registered as unemployed. When matched against the contemporary standards of Europe and North America, the Russian data are low figures indeed. The number of people officially registered as unemployed by the Federal State Employment Service by December 1998 was 1.9 million people, or 2.6 percent of the economically active population. By the end of 1992 the share of Russians aged over 16 who were officially registered as unemployed by the Federal State Employment Service was less than 1 percent of the economically active population. This share was growing with a low pace: 1.1 percent in 1993, 2.2 - in 1994, 3.2 - in 1995, 3.6 - in 1996, 3.5 - in 1997, to 2.6 percent in 1998.

According to the State Statistical Committee of the Russian Federation (Goskomstat), the number of economically active people in Russia during the time of restructuring decreased from 75.3 million in 1990 to 72.6 million in 1998. The number of employed population in 1998 was 64.0 million (ibid.). It is equal to nearly 43.5 percent of the general population. Since 1990 the number of employed declined by over 11 million! Such tremendous figure is a direct effect of policy of restructuring.

The State Statistical Committee of the Russian Federation uses the definition of unemployment recommended by the International Labour Organisation (ILO). Goskomstat's estimates of the actual unemployment rate are based on data of surveys. The number of unemployed by December 1998 was 8.6 million people (Socialno-economicheskoe polozhenie Rossii,. 1998: 280). According to calculations based on the Goskomstat data, the

[page-number of print edition: 121]

share of unemployed among the economically active population increased from 4.8 percent in 1992, 5.6 - in 1993, 7.5 - in 1994, 8.8 - in 1995, to 9.3 - in 1996, 9.7 - in 1997 (Rossiiskii statisticheskii ezsegodnik, 1997: 689), to 11.8 percent in 1998. The Russian proportions of people who were actually without work are comparable with those in other transitional economies (Mitev et al., 1998: 115; Socialno-economicheskoe polozhenie Rossii, 1998: 280):

Table 1.

Unemployment rates in post-communist transitional economies, 1995-1998

Country	1995	1996	1997	1998
Czech Republic	2.9	3.5	5.0	6.0
Hungary	10.4	10.5	10.0	9.0
Bulgaria	11.0	12.5	16.5	19.0
Poland	14.9	13.6	11.9	11.5
Romania	8.9	6.1	9.2	9.0
Russia	8.8	9.3	9.7	11.8

Source: Data on the unemployment rates in Central and Easter European Nations cited from Business Center Europe, The annual 1997/98 (Mitiev et al , 1998:115). The 1997 data were preliminary estimates and the 1998 data - prognosis. The .Russian data were drawn from the Goskomstat reports (Rossiiskii statisticheskii ezsegodnik M., Goskomstat RF, 1997, p.689 Socialno-economicheskoe polozhenie Rossii. M., 1998, #12 p. 280).

While official unemployment rates are lower than those in some advanced capitalist countries and in many Third World nations, bad as these official figures are, the reality may be even worse. Because of the way the rates are calculated, many of the actually unemployed are not counted. Many of those who lost their job but have not received the official status „unemployed" for personal reasons and who have given up looking for a job are

[page-number of print edition: 122]

not considered unemployed. One could add many economic migrants, refugees and forced settlers to this category. Those workers who were compelled to take unpaid long-term vacations staying in ranks and files of the employed population are not registered too. Being formally employed, they do not have jobs in reality. Likewise, those who want full-time permanent jobs but are able to find only temporary part-time work are not included in unemployment figures.

Some experts insist that the real rate of unemployment is near to 14-15 percent of the economically active population, including in this number graduates of high schools and higher education institutions, together with officers and soldiers, discharged from the Armed Forces, who are not registered as unemployed. The pessimistic estimate for the future is 16-17 million actually unemployed people. It is too much for Russia's 147 million population.

It should be noted that there are rather different views among experts concerning latent unemployment. Officers affiliated with the Federal State Employment Service on local levels often evaluate the rate of latent unemployment in their region as a pretty small one. Some economists use the discrepancy between the figures presented by the Federal State Employment Service and the figures published by the State Statistical Committee of the Russian Federation as estimates of latent unemployment (Mesentseva, 1998 :170). However, such a difference might be considered only as the lowest estimate of latent unemployment. Some arguments in a support of this view have been just presented.

The Russian Federation is a very vast country. During the recent years the regional rates of unemployment in most of the agrarian republics have been much higher than the nation's average - in Dagestan, Chechnya, Tuva, Kalmikia, Altai, etc. Due to the weakening of economic links with the cotton-producing republics of Central Asia, the rate of unemployment in the tradi-

[page-number of print edition: 123]

tional centres of the textile and light industries in the middle of the European part of the Russian Federation was high. The closure of mines and the slow-running process of conversion of the military-industrial complex resulted in the continuing increase of unemployment in various regions. In some industrial regions of Siberia and the Far East, the Urals and the Volga areas, as well as of central and north-western parts of Russia the regional rates were also higher than the mean proportion for the country.

3. Public Perception of the Threat of Unemployment

The dynamics of the Russian public opinion towards the growth of unemployment is presented in Table 2. The majority of nation, 65 percent of respondents, distinguished it as the most serious national problem in 1998. It should be noted that the share of Russians regarding the rise of unemployment as one of the most important national issues reached the level of half of the population in 1994 and slowly rise up to its peak in 1998.

The unemployment rise, recently emerging in post-communist Russia as an urgent issue, has stunned the Russians. This issue occupied the second position among the 15 most urgent problems on the top of the list of most urgent problems since 1997. In 1998 it was also on the second place - right after the problem of delayed wage payments that concerned people most of all (67 percent). Some 43 percent of employees interviewed by the Russian Centre for Public Opinion Research (VCIOM) in September 1998 reported about a risk of a significant reduction of the personnel because of their enterprises' tough economic situation (Kupryanova,1998:22). 15 percent of the respondents evaluated the probability of their dismissal using the words 'it is very possible', and 29 percent - 'there is such a prospect'.

Some people prefer to leave enterprises before their dismissal on grounds of reduction of personnel. This means that the army of the unemployed will continue to grow. Despite the fact that a

[page-number of print edition: 124]

large number (40 percent) of interviewed workers do not see the jeopardy of dismissal, the feeling of uncertainty concerning job stability is widely spread.

Table 2

The Russian public opinion on unemployment as a social problem,
1992-1998¹ (in %)

	Febr. 1992	Jul. 1993	Jul. 1994	May 1995	May 1996	Jul. 1997	Jul. 1998
The rising of unemployment is the most urgent national problem (% of those interviewed)	22	31	56	50	55	54	65
The rank of unemployment in the list of most urgent national problems (according to the number of respondents who have mentioned this problem).	3 - 5	5 - 6	3	3	3	2	2

Source: Ekonomicheskie I sozialnie peremeni. Monitoring obschestvennogo mneniya. Informazionnyi bulleten.( Interzentr). Rossiiskii zentr izucheniya obschestvennogo mneniya (VZIOM)(Economic and Social Change. The Monitoring of Public Opinion. Bulletin of Information. (InterCentre). The Russian Centre for Public Opinion Research (VCIOM) (Bi- Monthly, in Russian), 1993, #4, p. 60-61; 1994, #5, p. 58; 1995, #4, p.57; 1996, #4, p.58-59; 1997, #5, p. 47-48; 1998, #5, p.57.

Sergei Kalashnikov, Minister of Labour and Social Development of the Russian Federation, in one of his interviews (30 September, 1998) said that he did not consider the rise of unemployment as the Number One problem for today's Russia. Thus the popular perception of the risk of unemployment is not compatible with the view of top bureaucrats. Yet, he agreed that nobody knows the real scale of this phenomenon.

There is a correlation between the public perception of unemployment risks and the existence of the so-called 'disguised unemployment' in many former state-owned enterprises. Thinking about disguised unemployment, one should bear in mind that

[page-number of print edition: 125]

many enterprises were characterised by a redundancy of personnel and underemployment in the recent Soviet times. In this respect no great changes occurred during the time of restructuring. Using the terms "redundancy" and "underemployment" we just want to point out that there were plenty of cases where two or three people were doing the work that could be done by one employee. Economic restructuring inevitably should end such practices.

Analysing data of the above-mentioned national survey, carried out in September 1998, sociologists wanted to find out the present-day workers' preferences: either to stay at the same place despite the irregularly and incompletely paid wages, or, to be discharged with subsequent registration at the employment service and unemployment benefits, as well as the expectations for finding a new work place in the case of dismissal. It has been found out that over 40 percent of the interviewed workers anticipated mass dismissals at their enterprises, which may affect them personally (Kupriyanova, 1998). Taking the anticipation of dismissal in the near future of those who were working part-time and with wages unpaid into account, the scholars have evaluated the size of disguised unemployment. The calculations showed that it varied in the range from 13 to 38 percent of the employed (Perova, 1998). These figures might be interpreted as indirect indicators of the number of those Russian workers who are under the risk of unemployment on grounds of reduction of personnel.

According to the mentioned survey, despite low and irregular payments, about half of the workers (49 percent) preferred to keep the job which they had. Nearly one fifth (18 percent) said they would prefer to quit if the wage arrears, part-time working or unpaid leaves would be not halted in the visible future. Only 36 percent of the interviewed were sure that, if dismissed, they would easily find another job in their profession. (Kupriyanova, 1998).

[page-number of print edition: 126]

The value of a stable job has significantly grown for the workers during a time of economic restructuring. This is a positive psychological effect of the restructuring. At the same time, too many Russians dread the future due to risks of unemployment. Yet, people have to anticipate unemployment and even learn to accept it.

What kind of people have lost their jobs as a result of the rise in unemployment?

4. A Case Study of Long-term Unemployment in the City of Tver²

Unemployment and related phenomena can be regarded from different perspectives, i.e. those of the idle worker, the bureaucrats running the restructuring, the employment agencies, etc. In this paper, the author tried to adopt such a multiple- perspective view. In order to achieve a better understanding of the problem area, we turn to a study of long-term unemployment carried out in the city of Tver in December 1998 -January 1999³.

General parameters of unemployment in Tver. In 1998 the official average rate of registered unemployed in the entire region was about 1.3 - 1.4 percent of the economically active population, which was lower than Russia's average rate. In the regional capital - the city of Tver - the rate was 1.4 percent of the labour force. According to the available labour statistics, by the beginning of November 1998 in Tver's region more than 97 percent of the registered unemployed received benefits. The rate of unemployment varied from 4 to near 1 percent among districts of the region due to peculiarities of district's economic profiles (it was lower in the agricultural areas). The average ratio of the number of unemployed workers to the number of job vacancies was 5 to 1.

The situation on the labour market in the Tver region basically resembles what is happening in many industrial areas of the Russian Federation. The average duration of unemployment

[page-number of print edition: 127]

in Russia in 1998 varied around 5-6 months. Table 3 displays the proportions of unemployed workers with different duration of unemployment in the city of Tver and the Tver region in 1995-1998⁴.

The change of the situation on regional labour markets is a reaction to the financial crisis which occurred in the autumn of 1998 and the continuing stagnation of the entire national economy. By the end of 1998 the total number of vacant jobs in Tver region declined at least by one-third compared to the same figure at the beginning of the year, because many enterprises reduced their personnel due to the persisting economic crisis (Labour and Employment, 1998: 4):

Table 3

Duration of unemployment in Tver City and Tver Region, 1995-98 (In %)⁵

Duration of unemployment	1995		1996		1997		1998
	Tver region	Tver city	Tver region	Tver city	Tver region	Tver city	Tver region	Tver city
Less than 1 month	12.4	8,1	12.9	18,3	12.7	12,0	15.4	15,6
1 - 4 months	41.5	57,9	36.4	42,1	35.2	36,5	35.6	45,4
4 - 8 months	24.8	23,0	23.8	19,8	23.3	23,3	25.9	22,5
8 -12 months	14.6	10,2	19.8	15,4	20.4	19,0	17.5	11,8
Over1year	6.7	0,8	7.1	4,4	8.4	9,2	5.6	4,4
Average, months	5.2	4,0	5.6	4,7	5.6	5,6	5.1	4,4

Source: The Tver Regional Department of the Federal Employment service. Bulletin "Labor and Employment". ¹ 11(73) , 1998, p.4; The Tver City Department of the Federal Employment service, official information.

Demographic structure of long-term unemployment. Table 4 presents the age pyramid of the sample of long-term unemployed interviewed in the study carried out in the city of Tver in winter 1998/1999. Middle-aged people form the majority of

[page-number of print edition: 128]

the long-term unemployed. The share of young people among the long-term unemployed is rather small as well as the portion of senior citizens.

Table 4

Age structure of the long-term unemployed in the city of Tver

Age (years)	< 20	20-24	25-29	30-39	40-49	50-54	55-60	60 +
Proportion in the sample, % (N= 300)	0.3	3.3	9.7	22.0	37.7	21.7	5.0	0.3

The majority (about 70 percent) of all officially registered unemployed persons and nearly one-half of all unemployed workers in the Russian Federation are women. Thus one may say unemployment in Russia has a "women face" (see also Mesentseva, 1998). It is also true for the Tver region where in 1998 about 70 percent of the unemployed workers were women. In our sample of long-term unemployed in the city of Tver, 79 percent are women. The age of many (about one-third) of long-term unemployed women in the Tver region is close to women's pension threshold (55 years).

Job preferences. Generally speaking, the workforce in Russia is well educated and vocationally trained, especially in industrial urban areas. In the Tver region about 14 percent of the unemployed have higher education (university level) and nearly 30 percent - a semi-high education (vocational college level). In the sample of long-term unemployed in Tver, nearly 40 percent have higher education and 36 percent - semi-high education. Half of the men in the sample have higher education. There are engineers (18 percent of the sample), teachers, physicians and lawyers among the unemployed. About 40 percent are managers on various levels - heads of large collectives and smaller teams with 5 members at least.

Most unemployed women and men performed non-manual work before they lost their jobs. They all prefer to get white-

[page-number of print edition: 129]

collar jobs again. However, according to studies, it is a rule that twice more unemployed men, compared to women, express the eagerness to perform "any kind of job for good money" (Kartashev & Danovsky, 1998:46).

According to the statistics of the regional Department of the Federal State Employment Service, about 85 percent of the vacancies in 1998 were blue-collar jobs. Employers are looking basically for workers who are able to do manual work. In such circumstances the chance for well-educated aged unemployed women to get a new office work is pretty small.

There has been a severe shake-out in the manufacturing sector in the Tver region due to the crisis and the policy of restructuring. However, about one-half of long-term unemployed left their job 'according to their own will', and only one-third was dismissed on grounds of reduction of personnel or other administrative reasons.

Looking at figures, one can easily arrive at the conclusion that the majority of the long-term unemployed have achieved their present status voluntarily. It seems that the greater part of the present clients of the employment service wish to get guarantied social benefits on a regular basis. Such a conclusion might be paradoxical, but it should be argued that the analogous proportions were disclosed in other surveys (See Khasaev, 1998). According to results of regular surveys in Moscow, since 1992 the number of long-term unemployed, who prefer to quit due to personal reasons is rapidly increasing. In 1996 it was much higher than the number of unemployed dismissed on the grounds of reduction of personnel: 43 percent against 31 percent of the total number of the unemployed (Kartashev & Danovsky, 1998:45). In 1996 this share was more than twofold higher compared to the figures of 1992, when over 70 percent of the registered unemployed were dismissed on grounds of reduction of personnel.

[page-number of print edition: 130]

Status change and expectations of the unemployed. People rank one another on the basis of their occupation, education, prestige and income. The work which people do helps them to define their place is society as well as their personal options. It also has a profound influence on their psychological state. Although some people try to separate their personal identity from their job status, this is difficult to achieve.

All over the world at the bottom of the heap both in terms of prestige and income are the unemployed and the under-employed (those who can find only part-time or temporary work). A sense of inferiority or inadequacy is common among these people. Nearly half of the long-term unemployed admitted that their present social status is lower than that of their father at the same age. In sum, about 40 percent of the respondents evaluated their status in terms 'low' (30 percent) and 'very low' (10 percent).

Almost all respondents in the Tver sample reported a negative change of their well-being during the year preceding the survey. Negative expectations concerning the plausible change of the family's well-being in the nearest future were expressed by 38 percent of the long-term unemployed. Only 14 percent believed that their financial situation would improve.

"Hope dies last" - says the Russian proverb. It should be also mentioned that half of the interviewed (53 percent) had no definite plans for the future, and one-third (35%) dreamed "just to survive". The rest wanted to fight for a better destiny. The proportion of optimists was bigger among the younger people.

Alienation from politics. The spread of political apathy and distrust in democratic institutions should be mentioned among the main cultural consequences of the poor state of democracy in this country (Ester et al, 1997). About one-third of the interviewed (35 percent) took part in the recent local elections, and one-half participated in the 1996 presidential election. Nonetheless, they did not feel the individual may influence politics in

[page-number of print edition: 131]

this country. Views of the kind: "Politics should be left to politicians", and "Plain people's actions cannot change the established order" were and are widespread among the unemployed. The bulk of the interviewed did not believe in the effectiveness of rallies and demonstrations, organised by the unemployed, and expressed no intentions to participate in such actions. According to the opinion of 70 percent of idle workers, collective protest actions would not end in an improvement of the situation of unemployed people.

Unemployment - the slip to poverty. Unemployment and poverty go hand in hand. Half of the sample (49%) has classified their family's financial conditions as "poor, hard, serious". 15 percent of the interviewed reported they could not make ends meet. One-fifth of the interviewed had to sell property in1998 and 13 percent were planning to do the same in the next year. About 5-6 percent gave their private apartments and summer houses for rent in order to get extra incomes.

It should be noted that the size of social benefits for the long-term unemployed in Tver at the time of survey varied in the range from 720 Rubles ($33) to a maximum of 814 Rubles ($37) a month, or to about one dollar a day. The average benefit overall the total array of unemployed was 414 Rubles ($19) or about 50 cents a day. By the way it was a bit bigger than the average pension (over 300 Rubles, or $14).

Feelings. A strange mixture of feelings "Hope for a better life" and simultaneously „fear of the coming days" was chosen as a characteristic of their psychological state by the relative majority of long-term unemployed (60 percent), when the respondents were asked about their perception of the future. The remaining 40 percent split into three additional groups with salient psychological features. 13 percent of respondents, thinking about the future, felt "fear", 7 percent - "indifference", and only 20 percent reported about their "self-confidence".

[page-number of print edition: 132]

The observed diversity of feelings and expectations concerning the future reflects the variety of psychological types of unemployed people, each with various attitudes towards the lost job and views on how to cope with unemployment. (See also Kartashev & Danilova, 1997).

The loss of a job may have devastating psychological consequences. Feelings of boredom, uselessness, and despair are common. Some frustrated workers suffer serious mental consequences. Studies carried out in many countries show that rates of such stress-related problems as suicide, alcoholism, mental disorder, heart disease, and high blood pressure are significantly higher among the unemployed. Unemployed workers are also more likely to lash out at those around them. An increase in unemployment increases child abuse and violence between husbands and wives. There are no reasons to think that the psychological consequences of the loss of job in Russia are different from those in other countries. Generalising, one may say that all above mentioned can also be regarded as risks of transformation and consequences of restructuring.

5. How to Cope with Unemployment?

The different opinions and proposals about how to cope with unemployment can be grouped into two broad categories. The first category includes studies on the behaviour of unemployed and proposals for better adjusting of those who appeared to be unemployed to the new capitalist environment. The second category contains ideas about ways to improve the activity of the employment service and recommendations on how to improve the national economy and to reverse the negative economic tendencies.

In present-day Russia the majority of those who have lost their job are seeking for a new one through a combination of the following methods:

[page-number of print edition: 133]

(a) Using their personal network of acquaintances, relatives and friends. About 43 percent of the long-term unemployed in the city of Tver moved along this most popular way, and the fifty percent of those interviewed by VCIOM in September would like to apply with the help of their friends (Kupryanova, 1998: 23). Most respondents from our sample were sure that one's chance to get a job depends mostly on his or her network of acquaintances, then on age and education characteristics, and, on the third place, on gender, manners and nice-looking appearance of the applicant.

(b) Applying for assistance to the local bodies of the federal employment service and to private personnel agencies. In our sample about two-fifths (39 percent) came for a new job to the state employment departments. According to VCIOM data, the proportion of those workers who plan to apply to the federal employment service for a job ‘in the event of such kind of emergency’ is increasing: from 3 percent in June 1991, to 14 in November 1992, 21 in January1993 to 25 percent in September 1998 (Kupryanova, 1998: 25). Only 2 percent of VCIOM respondents reported they would apply to private agencies.

(c) Applying directly to employers and chiefs of personnel departments. In our sample only 13 percent favoured this option. The number of VCIOM respondents who would like to use this variant is declining: from 23 percent in 1991 to 14 percent in 1998.

(d) Looking through lists of vacancies announced in newspapers and broadcasting media.

(e) Creating personal advertisements. In our study 25 percent used this variant in the past and 29 percent would like to publish their personal ads in the coming future.

There are also unemployed people looking for a job abroad. The number of such people cannot be large for plenty of obvious reasons. Only 5.0 percent in our sample reported about their failed attempts to start a new working career outside Russia.

[page-number of print edition: 134]

Reducing unemployment is a continuing concern of governments around the world. Russia is not an exception to the rule. Due to a short period of our dealing with this problem, we cannot say that most federal and local governmental programmes met with long-term success. But there are visible positive results of the retraining program. In October 1998, 443 idled workers from the Tver region attended short-term job retraining courses in order to learn a second profession. About 90 percent of the retrained got a new job.

The job retraining programmes are becoming more and more widely used by the Russian Federal Employment Service. The idea is a simple one: teach the unemployed persons skills which are demanded in the new economic environment, so that they can find new jobs or start their own small private business. In the latter case they are provided with a small non-reversible credit by the governmental agency. Examples of such practice can be found in St. Petersburg and Moscow.

Although this approach seems to be rational and bearing in mind the ultimate aims of the present-day policy, it has its limitations. Self-employment in the informal sector cannot be seen as a general solution to the problem of mass unemployment. A small number of the present-day unemployed are courageous enough to go to small private businesses. Around 8.0-10 percent of our sample tried unsuccessfully to become entrepreneurs in the past and the same number wants to start a self-employed business in the future.

Yet, many governmental efforts to deal with such pressing problems are under-funded and ineffective. The principal ideological point determining the labour policy is whether the government is responsible for providing jobs for anyone who needs them, or not. A variety of answers to this question will be discussed in the next section.

[page-number of print edition: 135]

6. The Dispute on Governmental Guarantees for Job for Everybody Who Needs One

Should the government guarantee a job for anyone who wants to work? During the 'good old times' of state socialism this question sounded as rhetoric. It was a time of total employment, and the Soviet law prosecuted those who did not want to work. Since 1992 there is no such law and the situation on the labour market has drastically changed. Today, like in many countries, in post-Soviet Russia there are three groups of people with different views on this vital problem. A significant part of the Russian people up to nowadays believes that the answer to the question must be positive despite the radical changes in Russia's social and economic system. The minor part stands on the directly opposite position. And, of course, there are people without any definite opinion.

A very small number of the unemployed in our sample (8.0 percent) agreed with the opinion "Unemployment is good for our economy", while the vast majority (73 percent) accorded with the opinion "Unemployment is harmful for the economy". We feel the observed proportions reflect the balance of views in the society as a whole, yet we have no survey data to prove this hypothesis.

Most Russians believe that there is hardly anything more inefficient for the national economy than the waste of the productive energy of millions of well-educated, professionally trained and willing to work people, who had been dismissed from their jobs. To make matters worse, many people believe that the rise of unemployment during the period of the transition to a market economy is likely to diminish the intellectual capital of the nation to a significant extent. In fact, many unemployed suffer a decline in self-esteem. Alcoholism increases sharply among the unemployed. Divorce rate increases, and children become victims to family disasters caused by the parent's unemployment. Criminals are often recruited among workers laid off their job.

[page-number of print edition: 136]

According to three-fourths of the interviewed in Tver, the society as a whole is primarily responsible for the very fact of unemployment of individuals who want to work. Such a fact should be considered mainly as a 'defect of society', and not as a 'fault of the concrete person who has become unemployed'. The majority of the unemployed maintained this point. A tiny minority, about 5% of the respondents, supported the opposite view. One may notice that the socialist attitudes towards the phenomenon of unemployment and the paternalist function of the state are deeply rooted in mass consciousness in Russia. But in reality the restructuring in transitional Russia was based on IMF receipts and macro-economic concepts drawn from theories of liberal economy, not from socialist ideals.

Adherents of Yeltsin's policy in early 1990s argued that the proposal to provide a job for everyone is just one of the old-fashioned socialist ideas, which sounds nicely, but simply cannot be implemented in practice. They emphasised the fact that officially unrecognised unemployment has existed during the previous decades despite the state guarantee of total employment.

Russian bureaucrats doubt whether unemployment can or should be eliminated, although they agree that the extremes of unemployment are a symptom of crisis in the economy. In their view, those unemployed who want to work must be provided with re-training and psychological help, so that they can find their place in the new Russia's capitalist economy and support themselves. The main point in this set of arguments is that unemployment is functional for society and economy, and moreover that some unemployment is necessary for the maintenance of a certain tension on the labour market. According to liberal economists' logic, the absence of a free workforce may 'undermine the self-reliance and initiative of the people'.

For those economists who run reforms in the 1990s, the rise of unemployment in the time of transition to a market economy

[page-number of print edition: 137]

is a predictable and inevitable consequence of a restructuring which the society must swallow. According to the Russian laws, the government should not attack unemployment by creating new governmental jobs, i.e. jobs in the non-private sector, but must support the development of private business.

In a popular weekly magazine Argumenti i Facti (January, 1999, N1) the readers met with the declaration that even in today's Russia 'anyone who really wants to work always can find a job'. In our view, such a general statement is based on misunderstanding of the real gravity of the situation on the national labour market. The situation on the regional labour markets is gloomy enough as well. In many regions finding a job adequate to one's demands is not an easy task. The predominant part of the interviewed in Tver have evaluated the capacities of both the state-owned firms and the private enterprises to provide extra jobs as very limited.

For the majority of long-termed unemployed, the basic duty of the government is a financial support of citizens in case of unemployment. Job security should be primarily a concern of the government or the federal law, not of the individual - this is an opinion expressed by more than half of the interviewed in Tver. Only about 11 percent claimed the opposite point of view, and approximately one-third supported the view that both the state and the individuals should be equally responsible for this issue.

As our Tver study has clearly demonstrated, the problem with many of the Russian unemployed is that they want to get well-paid office jobs and refuse the lower-level and manual jobs that are available. Some bureaucrats, advocates of liberal reforms, asked in public: Why should taxpayers subsidise this kind of arrogance? And, indeed, there were and are grounds for such a position.

But the ordinary people say: Why do bureaucrats blame the women with higher education, who form the relative majority of

[page-number of print edition: 138]

long-term unemployed, for their aspiration to get a job adequate to their experience and qualification? In fact, these women are genuine victims of the politics of economic restructuring. They are responsible neither for the current economic crisis, nor for the industrial policy of the previous authorities. And they suffer more than other people, both economically and psychologically.

The variety of co-existing views reflects the ideological cleavage of the Russian public mind, the breaking value conflict concerning the ultimate societal goals and means of economy's transformation that split the entire society (See also Rukavishnikov, 1994; Ester et al., 1997; Rukavishnikov et al., 1998). In fact, unemployment is as much a political problem as a problem of economy and society. It is hard to imagine effective solutions to such mutually correlated social problems as unemployment, poverty and crime without effective political actions. In this respect the debates concerning the fight against unemployment in post-Soviet Russia resemble the ones in other societies.

7. Concluding Remarks

Today's post-Soviet Russia belongs to the middle-income countries and according to its GDP per capita actually looks like a developing nation. Is Russia really transforming into a Third World country? Making comparisons and measuring changes and trends depends on the point of view.

The relatively large share of people with semi-high and higher education diploma among those who lost the job is the first important trait of present-day Russia's unemployment, that drastically differentiates it from the Third World countries. The large portion of well-educated and qualified white-collar women among the unemployed is the second significant feature by which Russia differs from many other nations. In the Third World countries, as well as in many industrial societies, the majority of unemployed workers is formed by low-educated men who used to perform low prestige jobs in manufacturing indus-

[page-number of print edition: 139]

tries or construction. There are effective mechanisms in this country for financial support of the unemployed, for retraining them, for encouraging and helping them set up small businesses. And this is the forth principal point of discrepancy.

Thus, Russia is still very different from the Third World economies at least with respect to unemployment risks. However, one cannot be absolutely sure that the answer to the above set question will be negative in the future, if the present line of developments continues. The way of ruling and restructuring, together with the lack of hard-currency resources to overcome the crisis, are crucial points that make the answer uncertain.

Russia's economy is in a very difficult situation. The memory of the crash of the national financial system in August 1998 when many foreign investors lost huge amounts of money is fresh enough to prevent most Western bankers from new adventures in Russia. The burden of state foreign debts is extremely heavy too. In 1999 Russia has to start paying for the earlier postponed debts of the former USSR, and for this reason the economic situation in the country may become worse than expected.

Oversimplifications should be avoided when speaking about the relations among unemployment, labour market and the restructuring of economy in post-communist Russia. It appears reasonable to assume that if the government takes action to stimulate economy, business will boom and more jobs will open up. However, the real relations between the governmental intentions and their direct and indirect efforts are more complex and far from this simple scheme.

The best way to deal with unemployment is to re-organise the economic system in Russia so that it operates more efficiently. In the recent years the governmental policy of economic restructuring had harmful effects on the living standard of the nation and created the rise of unemployment, although most former state property was privatised.

[page-number of print edition: 140]

Today Russia looks more like a market-type economy, than a state-run one. Governmental intervention into economy is lim-ited. Any attempt to provide jobs for millions of unemployed people would require great investments in the economy. The right and left politicians are now united around the point that more money must be invested in the so-called 'real economy', i.e. in industry and agriculture, to reach an increase in productivity and competitiveness of Russian products on the world markets, and eventually to reduce unemployment. They have different opinions on where and how to get money and how to use them.

The principal point to be emphasised here is that any economic recovery strategy needs a political will on behalf of the government and a strong support of both the parliament and the nation to be implemented in practice in a full scale. Most Russians are concerned about revitalising the national economy. Most Russians, like the overwhelming majority of the interviewed in Tver, do not believe in the capability of the federal government to reduce the scale of unemployment because of the chronically poor Russia's budget, and due to political reasons.

On the other side, capitalism in this country is often called "bandit or robber capitalism". The state of democracy is poor. It takes the country back to the eternal problematic of democracy and capitalist economic development. Although many people think about inflation, unemployment, and huge state debts as the most important economic problems of the present-day Russia, they are actually symptoms more than causes of economic problems.

Resuming, we want to argue again that unemployment in Russia cannot be understood or dealt with solely in economic terms. Political and cultural dimensions of Russia's policy of transformation are equally important as the economic one. If examined in this context, the current labour-related troubles in Russia are not just short-term economic problems of non-paid in time wages and rising unemployment. They are mainly political

[page-number of print edition: 141]

issues, because they are related to the future goals, to the strategy of reforms, and to popular support for the power.

Thus, the principal point of the struggle against unemployment is: should the government guarantee jobs for those who want to work, should the state give jobs to those who are unable to find them in the private sector, or not. For the newly emerged Russian oligarchy any attempt for greater intervention of the federal government in the economy would be unacceptable.

At the threshold of the new millennium Russia is probably coming to the next turning point in its history, but we do not share the view that the present line of development can be altered virtually overnight. The fundamental question is whether Russia will be a Third World country in the 21-century, or it will restore its former position as an advanced nation and will be able to maintain itself as a powerful player on the international scene. In our view, despite today's huge decline in GDP per capita, the ranking of Russia on the list of nations will improve in the next century, because of its giant intellectual, natural and technological potential.

Thus, we may conclude that the struggle against unemployment in Russia will be endless like in the Western world. Genuine state wisdom and governmental skill need to shield the unemployed from undue distress while reorienting the economy to reintegrate them. As far as the future development is concerned, the formula "put men before money" may be the only way for the Russian elite to answer the revolutionary challenge of the 21st century.

[page-number of print edition: 142]

NOTES

¹The question formulated as "Which of the problems existing in today 's Russian society makes you most anxious ?" Response 3 - "Rising unemployment".

Source: Ekonomicheskie I sozialnie peremeni. Monitoring obschestvennogo mneniya. Informazionnyi bulleten.( Interzentr). Rossiiskii zentr izucheniya obschestvennogo mneniya (VZIOM)(Economic and Social Change. The Monitoring of Public Opinion. Bulletin of Information. (InterCentre). The Russian Centre for Public Opinion Research (VCIOM) (Bi- Monthly, in Russian), 1993, #4, p. 60-61; 1994, #5, p. 58; 1995, #4, p.57; 1996, #4, p.58-59; 1997, #5, p. 47-48; 1998, #5, p.57.

²The city of Tver is located to the north-west of Russia's capital on the banks of the Volga river, 167 kilometres from Moscow and 485 kilometres from St. Petersburg. The total population of Tver is over 460,000 people, including 187,000 economically active persons. 63% of the labour force are working in material production sectors, the rest - in other sectors of economy. One-third of the working population is employed in industry. The non-state sector of the city economy, emerged as a result of privatisation, gives jobs to about 90 percent of those working in the sphere of production of material goods. 92 large and medium-size industrial enterprises with different forms of ownership compose the core of the economy of the city. Together they produce about one-quarter of the total industrial production of the region. Main branches of industry are machine building (36% of the total volume of production), food industry (21%), electric energy industry (15%), light (12%) and chemical (7%) industry. Currently 18 percent of the economically active population are working in the informal sector, which is expanding. About two thousand small private enterprises are registered by the city authorities. According to the official statistics, the share of the small private firms in the total volume of industrial production of the city is nearly 10 %, in construction works - 23%, and 69% - in retail trade. The number of commercial banks operating in the city is close to 20. There are 5 higher education institutions, including university, several colleges and vocational schools, and over 50 scientific research

[page-number of print edition: 143]

institutions and design and planning organisations, which are also giving jobs to citizens. Since the very beginning of the 1990s, the entire city economy is in deep crisis. However, the official rate of unemployment is relatively low - 1.4% of the economically active population.

³ The UNESCO- MOST sponsored this survey as a part of the international project headed by Professor Nikolai Genov from the Institute of Sociology of the Bulgarian Academy of Sciences. Prof. Genov supplied the questionnaire used in the Tver survey to the Russian team. Mr. Yuri Veremeenko supervised the fieldwork, organised with the kind assistance of the leadership of the Tver City Department of the FSES. The Tver university students served as interviewers. Mrs. Tatiana Rukavishnikova administrated the computer works. The author greatly acknowledges all persons engaged in this study.

⁴The duration of individual unemployment depends on plenty of subjective and objective reasons. By the end of 1994, more than half of the unemployed had had this status for more than 4 months, each sixth or seventh of them had had no job for more than a year (Socialno-economicheskoe polozhenie Rossii, 1995: 142). In 1994 the average time spent in search of a new job was about 7 months, in 1995 it was nearly 8 months (Socialno-economicheskoe polozhenie Rossii, 1995: 248). The overall figures also vary from region to region and from month to month due to the stand of economy.

⁵By keeping students off the labour market until they are young adults, the educational system, i.e. universities, colleges and schools, absorbs many of those who are actually not needed in the economy and reduces unemployment.

⁶According to data from a special survey carried out by the Russian Centre for Public Opinion Research (VCIOM) in June 1993, about one-fifth of the registered unemployed have not had a job previously. Two-fifths were dismissed on grounds of redundancy or liquidation of their enterprise. And another two-fifths left voluntarily, mainly because of low earnings and hard working conditions.

[page-number of print edition: 144]

⁷Public opinion reflects contradictory combinations of attitudes and beliefs spread among the population. The transition involves changes of the value-attitudinal system of the nation, which we did not discuss in this paper. Basic pillars of the mind of "homo sovieticus" are eroded but the entire value system is not totally destroyed. An ideological split of society is not a simple expression of a 'generation gap'. It is the result of a conflict of different sets of orientations and world-views.

⁸In 1995, according to World Bank data, Russia was 56th in the list of 150 nations ranked by gross national product (GNP) per capita measured in US dollars (Russia's GNP per capita was $2,240). Russia's GNP per capita adjusted for purchasing power parity (PPP) was $4,480, and according to this measure Russia ranked 52nd. Russia stood behind all welfare Western-European nations as well as USA, Japan, 'young Asian tigers', Canada, Australia, United Arab Emirates, Kuwait, Israel, New Zealand, Republic of Korea, Argentina, Uruguay, Brazil, Mexico, etc. Central European ex-socialist states are positioned higher than Russia.

REFERENCES

DANOVSKY, S.L. (1994) ‘Sotciologicheskaya i psyhologicheskaya characteristica bezrabotnich’ (Sociological and psychological characteristic of the unemployed). - Sotciologicheskie Issledovania (Sociological Studies Monthly), N 5, p. 82 - 89 (in Russian).

ESTER, P., L.HALMAN, V. RUKAVISHNIKOV (1997) From Cold War to Cold Peace? A Comparative Empirical Study of Russian and Western Political Cultures. Tilburg: Tilburg University Press, 1997

KARTASHEV, S.A., S. L. DANOVSKY (1998) ‘Socialnaya dinamika bezrabotitsi v Moskve’(Social dynamics of the unemployment in Moscow) Sotciologicheskie Issledovania (Sociological Studies Monthly), # 12, p. 44 -47 (in Russian).

[page-number of print edition: 145]

KARTASHEV, S.A., T.R. Danilova (1997) Sotsialnya tipologiya bezrabotnich i ich psichologicheskii portret ( Social typology of the unemployed and their psychological portrait). Moscow: Finstatinform, (in Russian).

KHASAEV, G. (1998) ‘Osobennosti regionalnoi bezrabotitsy (Features of regional unemployment). Sotciologicheskie Issledovania (Sociological Studies Monthly), N 4, p. 41 - 48 (in Russian).

KUPRYANOVA, Z. (1998) ‘Otsenka rabotnikami ich polozhenia na rynke truda’ (Working People Assessing of Their Situation in the Labour Market). - Ekonomicheskie i sotsialnye peremeny. Monitoring obschestvennogo mneniya. Informazionnyi bulleten. Rossiiskii zentr izucheniya obshchestvennogo mneniya (VZIOM)(Economic and Social Change. The Monitoring of Public Opinion. Bulletin of Information. The Russian Centre for Public Opinion Research (VCIOM) (Bi- Monthly ), N 6, p. 22 -25 (in Russian).

LABOUR AND EMPLOYMENT (1998) Bulletin. The Tver City Department of the Federal Employment Service. N 11 (73)

MESENTSEVA, E. (1998) ‘Outsiders in the Labour Market: Russian Men and Women Facing Unemployment’. In: N.Genov, Ed.. Central and Eastern Europe. Continuing Transformation. Paris-Sofia: UNESCO-MOST, Fridrich Ebert Stiftung, p.164-182.

MITEV, P.-E., V.A. Ivanova, V.N. Schubkin (1998) ‘Katastroficheskoe soznanie v Bolgarii i Rossii, (Catastrophic Consciousness in Bulgaria and Russia). - Sotsiologicheskie Issledovaniya (Sociological Studies Monthly), N 10, p. 111 - 117 (in Russian).

PEROVA, I. (1998) ‘Skrytaya bezrabotitsa’ (Disguised Unemployment). Ekonomicheskie i sotsialnye peremeni. Monitoring obschestvennogo mneniya. Informazionnyi bulleten.( Interzentr). Rossiiskii zentr izucheniya obschestvennogo mneniya (VZIOM)(Economic and Social Change. The Monitoring of

[page-number of print edition: 146]

Public Opinion. Bulletin of Information. (InterCentre). The Russian Centre for Public Opinion Research (VCIOM) (Bi- Monthly ), N 6, p. 25 - 28 (in Russian).

ROSSIISKII STATISTICHESKII EZHEGODNIK (1997) Moscow: Goskomstat RF.

RUKAVISHNIKOV, V., L. HALMAN, P. ESTER (1998) Politicheskie kultury i sozialnye izmeneniya. Mezsdunarodnye sravneniya (Political Cultures and Social Changes. International Comparisons). Moscow: Sovpadenie (in Russian).

RUKAVISHNIKOV, V (1994). ‘A Split Society: Political Crisis and Popular Support for Transition to a Free Market and Democracy in Russia’. Sociale Wetenschapen (The Netherlands), N 2, p. 30-65.

SOCIALNO-EKONOMICHESKOE POLOZHENIE ROSSII (Social and Economic situation of Russia) (1998) Moscow, N12 (in Russian).