Feb 20, 2021
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Benefits are over: Mass layoffs start in Russia from March 1

Benefits are over: Mass layoffs start in Russia from March 1

Photo: Rostislav Koshelev / TASS

As soon as the business writes off the preferential loans received under the obligation to preserve jobs in a pandemic, massive staff reductions will begin. This opinion was expressed by the President of the All-Russian public organization of small and medium-sized businesses “OPORA RUSSIA” Alexander Kalinin

“There are serious concerns that businesses are now keeping people to write off these (concessional) loans, but in March, having received these write-offs at 2%, they will begin to lay off staff, because our RSBI HR Index shows that conservative entrepreneurs have taken a stance. That is, they are not yet considering the possibility of increasing the number of their employees, ”Kalinin said.

The fact is that the credit program for supporting employment in the affected industries and socially oriented non-profit organizations with a preferential rate of 2% per annum is ending. Under this program, Russian banks in 2020 issued over 400 billion rubles to entrepreneurs, which made it possible to pay salaries to 5.4 million employees. Loans, along with interest, will be written off from the budget, provided that by April 1, borrowers will retain 90% of the number of employees (while maintaining from 80% to 90% of the state, half of the debt will be covered by the budget).

And, since Alexander Kalinin is well aware of the real state of affairs in small and medium-sized businesses, he knows that entrepreneurs are pessimistic about sales, that they are worried about the growth of production costs, he has no illusions about keeping jobs.

Under these conditions, entrepreneurs not only will not recruit personnel, but will in every possible way get rid of “extra” employees, who are considered “ballast”, preventing them from reaching the required level of profitability. Simply put, to survive.

What is the government doing in this situation? Does it support existing businesses and create new jobs? Nothing like this.

Nevertheless, the authorities are preparing to meet a new wave of unemployed. With its peculiar features. At the initiative of the United Russia party, already, by the way, already approved by the President Vladimir Putin, legislative amendments will be introduced that will build employment centers into a new vertical. For example, the powers of employment centers will be transferred to the federal level.

“Employment centers should start working in a new way, and from“ labor exchanges ”, where a person applied first of all for benefits, they should turn into convenient, client-oriented centers. We propose the development of an electronic form of provision of public services in the field of employment. It is also necessary to expand the functionality of the Work in Russia platform. This will reduce the list of documents that must be submitted to the employment services, “said the head of the United Russia faction in the State Duma. Sergey Neverov

Unemployment with conveniences. The effect is about the same as if you cover the inside outhouse with expensive wallpaper from the inside. The initial cost of this redecorating employment service is already known. As previously reported by “SP”, earlier, on January 28, at a meeting of Putin with members of the government, the Minister of Labor and Social Protection of Russia Anton Kotyakov stated that almost 21 billion rubles were allocated for measures to restore employment in the programs of the budgets of the Russian regions.

According to officials, the creation of a single digital platform in the field of employment and labor relations will also contribute to the comfortable stay of Russians in the status of unemployed. The cost of the costs for this event has not been announced, but it will obviously cost a pretty penny: in 2021, employment centers in 61 Russian regions are being modernized – they are planned to be completely re-equipped, as well as retraining of all employees. Isn’t it busy?

At the same time, from 1.5 to 10 million people may be left without work if anti-crisis measures to support business are not continued, he believes chief analyst at Solidarity Bank Alexander Abramov:

– The situation on the labor market remains difficult despite the fact that some progress has been outlined since about the fourth quarter of last year. But here it should be borne in mind that we did not have large-scale economic closings, lockdowns, such as in Europe. And our unemployment grew until the fall. This shows that the problems in the labor market are structural in nature. And if in the West, say, they are canceling restrictive measures, they have a certain increase in employment in this regard, then we should not expect such a sharp increase in employment, since we did not introduce such strict restrictions.

The anti-crisis measures that were taken in the spring and summer of 2020 are due to expire in the near future, but the way out of them should be very gradual, and the government should constantly assess the situation on the labor market. Because until now the number of officially registered unemployed is several times higher than a year ago. This despite the fact that a significant number of people have already expired their unemployment benefits, but this “respite” did not help them find a new job. Many of them have remained in the unemployed category and no longer receive benefits.

“SP”: – But the pandemic seems to be on the decline …

– This should not be a criterion that it is time to scale back measures to support the economy and business. Not. The criterion here should be significant progress in reducing labor market tensions. But since we see that the situation on the labor market remains very difficult, then if we abruptly stop these measures now, since the deadlines are running out, then several million people will find themselves unemployed, and this will exacerbate the already difficult socio-economic situation.

“SP”: – And how large-scale can be layoffs? Will it be a serious wave?

– I think this is about 15% of employment, something about 10 million people. If they cut every fourth or fifth after the end of these measures, without support. Yes, the employer kept these workers as long as the anti-crisis measures were in place. Now that they are over, he has fulfilled his conditions, the soft loans have been written off, and it is no longer profitable for him to keep these people any longer, he fires 20-25%, even 15%, reduces. Let’s say there will be the very minimum – from 1.5 to 2.5 million people. Obviously, this is not 10 million, but it is still very significant for the labor market, given the already difficult situation …

“SP”: – Yes, and hidden unemployment …

– Of course. In addition, many workers were transferred to part-time employment. It seems that they are not yet unemployed, but they have already significantly lost their salaries. This is also a cost. And prices are going up. And now, given that oil has approached $ 65 per barrel, and our state budget has a base price of $ 43 per barrel, it is obvious that the state has both resources and reserves in order to preserve some of the anti-crisis measures.

I think that this is a wrong situation, when the state is swelling with an excess of money, and at the same time people find themselves almost on the verge of starvation. There must be a balance. And when the Ministry of Finance and the Federal Tax Service in our country declare that tax collections in the country are growing several dozen times faster than the economy, then there is probably a feedback in this – maybe the economy is growing too slowly precisely because the tax burden is rapidly increasing ? Well, well, you collected the money, but then you return it to the economy – prolong the anti-crisis measures, introduce some other forms of support.

Recently, it was reported that the level of non-repayment on preferential loans is 2.5 times higher than for ordinary loans. Well, this is about 4%, but it should also be borne in mind that this figure will grow as the maturity of these loans approaches. That is, this indicator of “preferential” non-return may increase to 6-8%. And this shows that even with the support, not every business has coped with its obligations. And in most cases this is due to quite objective reasons, with the fact that demand has not fully recovered. It’s hard to blame the business owners here. On the contrary, this shows that the situation in the economic sphere remains difficult and heterogeneous. And, of course, support measures need to be further revised, taking into account the state of affairs, and prolonged.

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