Professor Katsasonov: Millions of people in Russia have become part of the "NEET" generation (Not in Education, Employment, or Training), and the cause of this phenomenon lies with the Russian Ministry of Labor and Social Security and the Ministry of Economic Development. Russian departments take pride in overcoming unemployment, but in reality, it is just a myth. Author: Valentin Katsasonov

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Since 2022, Russian officials have happily reported a downward trend in the country's unemployment rate. For many years prior, the official unemployment rate calculated and published by Rosstat was reluctant to fall below 5%. For example, the value of this indicator was 5.6% in 2015; 5.8% in 2020. But by 2021, the unemployment rate dropped to 4.8%, and further to 3.9% in 2022. On March 6th of the previous year, Russian Deputy Prime Minister Tatyana Golicova announced that Russia's unemployment rate had reached an all-time low. In January 2023, the unemployment rate was 3.6%, and in February it set a new record at 3.5%. A month later, Russian Minister of Economic Development Maxim Reshetnikov said, "It is very likely that the historical low unemployment record will continue to be broken. Regardless, low unemployment will persist in our country for quite some time." Russian departments take pride in overcoming unemployment, but it is just a myth. In fact, what the minister said hit the nail on the head. The unemployment rate for the entire year of 2024 was only 2.4%. This is an unprecedentedly low unemployment rate in Russian history. There is indeed something to be proud of! Article 37 of the Russian Constitution states: "Everyone has the right to work." Judging from the official unemployment rate indicators, the right to labor is almost fully realized. It is almost within reach of achieving 100%! When you compare Russia with other countries, the sense of pride becomes even stronger. The ru.tradingeconomics.com website publishes unemployment rate data for many countries around the world. As of January 2025, the unemployment rates (%) for some countries are as follows: Russia - 2.4%; Japan - 2.5%; Mexico - 2.7%; South Korea - 2.9%; Switzerland - 2.9%; Saudi Arabia - 3.7%; Netherlands - 3.8%; Australia - 4.1%; United States - 4.1%; United Kingdom - 4.4%; Indonesia - 4.9%; Relevant Countries - 5.1%; Eurozone - 6.2%; Germany - 6.2%; Italy - 6.3%; Brazil - 6.5%; Canada - 6.6%; Argentina - 6.9%; France - 7.3%; India - 8.2%; Turkey - 8.4%; Spain - 10.6%; South Africa - 31.9%. Our unemployment rate is more than 13 times lower than South Africa's! More than twice as low as that of relevant countries! However, unfortunately, we are not first in the world rankings, but second. The unemployment rate is lower than ours in Singapore (1.9%). However, I urge readers to exercise restraint when feeling proud of our "global lead" in population employment, if we exclude tiny Singapore. Because, as people from Odessa would say, there is a world of difference between "unemployment rate" and "population employment rate." I have tested my compatriots' understanding of this issue many times, some of whom even hold advanced degrees in economics. But none of them passed my test. I posed a somewhat provocative question: "If Russia's unemployment rate is 2.4%, then what is Russia's population employment rate?" The answer is almost always without hesitation: 97.6%. Respondents think this is a simple arithmetic problem for elementary school students. We log onto the website of the Russian Federal State Statistics Service to see what the definitions of these two indicators are: "Unemployment Rate (UB) - the proportion of unemployed people in the corresponding age group workforce (including employed and unemployed people), expressed as a percentage." "Employment Rate (UZ) - the proportion of employed people in the total population of the corresponding age group, expressed as a percentage." From the above definitions, it can be concluded that these two indicators are indeed interrelated, but not as ordinary citizens mistakenly believe (i.e., unemployment rate + employment rate = 100%). Each indicator can be elaborated in a separate article. But for now, I will try to explain briefly using short "telegram-style" language. The unemployment rate indicator primarily depends on the number of unemployed individuals. So how is the number of unemployed determined? Those who register at job centers (sorry: now using a more "polite" term - register at "employment centers"). Russian Labor Minister Anton Kochakov proudly announced that the number of officially registered unemployed people in Russia has fallen to 300,000. By comparison: In 2020, the number of officially registered unemployed people was 4.3 million. The number of unemployed decreased by more than an order of magnitude! How could we not celebrate nearly complete victory over unemployment? However, these numbers do not indicate that the number of unemployed people in our country has truly decreased by an order of magnitude. They indicate something else entirely. Let me explain the reason. This year, the minimum unemployment benefit is only 1764 rubles, and the maximum cannot exceed 15,044 rubles. Furthermore, the maximum amount can only be distributed for up to three months. Afterwards, the benefit decreases by almost a third - down to 5880 rubles. If an unemployed person refuses the two job offers provided to him, the benefit distribution will stop. That is, the relationship between the unemployed person and the employment center may quickly end. The employment center simply gets rid of persistent job seekers. Meanwhile, unemployed people also lose interest in registering at the employment center. Usually, the transportation costs paid by unemployed people to go to the employment center may be more than the relief they can receive. In many foreign countries, the level of unemployment benefits is high and can be distributed for many years. People are very willing to register at the job center and are not in a hurry to rejoin the workforce. In Russia, if the employment center further tightens its requirements for clients, the unemployment rate indicator can even drop to zero. Everything is moving in this direction. My conclusion is obvious: Russia's official unemployment rate indicator is increasingly unable to reflect the true unemployment rate and the real population employment rate. By the way, the Russian Federal State Statistics Service does have data for the second indicator I mentioned - the population employment rate. But this indicator is released very late on the website of the Russian Federal State Statistics Service. And the media rarely publish the values of the employment rate indicator. I quote some data compiled by the Russian Federal State Statistics Service in "Labor and Employment in Russia: 2023". Employment rates for different age groups in various years (%): 2010 - 62.7; 2015 - 65.3; 2019 - 59.4; 2020 - 58.4; 2021 - 59.4; 2022 - 59.8. During the period from 2015 to 2022, the employment rate dropped significantly - by 6.5 percentage points. There are employment rate data divided by different age groups in the compilation. The lowest employment rates appear in the youngest and oldest age groups. In the 15-19 age group, the employment rate is 4.2%; in the 70+ age group, the employment rate is 1.9%. The highest employment rate is in the 40-44 age group - 91.6%, and the 45-49 age group - 91.4%. In most age groups, the employment rate is between 80% and 90%. Lower employment rates are seen in the 20-24 age group - 47.2%, as well as the 55-59 age group (73.4%), 60-64 age group (37.8%), and 65-70 age group (12.7%). The Russian Federal State Statistics Service explains that the low employment rate in the 20-24 age group is because young people in this age range are receiving education in higher education institutions and vocational schools. But even in the 40-44 age group and the 45-49 age group, we see respective unemployment rates of 8.4% and 8.6%. The Russian Federal State Statistics Service calculates the employment rate indicator for the working-age population. Here are the values for each year (%): 2019 - 79.3; 2020 - 77.0; 2021 - 78.0; 2022 - 79.0. This means that one-fifth of Russia's working-age population is unemployed. For example, this proportion was 20.7% in 2019; 21.0% in 2022. Now let us compare this with the official unemployment rate data: 4.6% in 2019; 3.9% in 2022. If we want to assess the true scale of unemployment, which data should we trust? We should trust the former rather than the latter. If we subtract the official unemployment rate indicator from the non-employment indicator of the working-age population, for example, in 2022 we get: 21.0 - 3.9 = 17.1%. I hope to learn from the Russian Federal State Statistics Service, the Russian Ministry of Labor and Social Security, or the Russian Ministry of Economic Development what lies behind this 17.1% figure? In absolute terms, this represents 14.3 million people. This working-age population exceeds the population of many countries around the world. The length of the article does not allow me to elaborate in detail on the mysterious individuals among these more than 14 million people who are of working age but neither registered at the employment center nor considered to be working in the Russian economy. There are several types of such mysterious citizens. The first type works in the "gray" and "black" sectors of the economy. By the way, their "shadow" labor activities often have distinctly anti-social characteristics. The second type consists of genuine unemployed individuals who disdain the employment center and its unemployment benefits, actively seeking work but failing to find any. The most common reason is that employers refuse to offer reasonable wages. The third type consists of "parasitic dependents". Here, we can further divide them into two groups. The first group consists of "ideological" parasitic dependents who prefer idleness and fundamentally resist work. The second group consists of those who can afford to be parasitic dependents. They have accumulated funds through various means and now live off the returns on these funds. They can be called "rentier citizens". I conclude this article with a clear assertion: Russia has not overcome unemployment. On the contrary, the country's labor potential is being greatly wasted. Unfortunately, I have not seen any practical measures taken by the government to better utilize this potential. Labor mobilization is crucial because Russia is currently in intense confrontation with the West. Original article: [Link] Disclaimer: The article represents the author's personal views. Feel free to express your attitude by clicking the "thumbs up/thumbs down" buttons below.