Feb 18, 2021
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Migration trap: Russia without migrant workers will not be able to build, sow and deliver pizza

Migration trap: Russia will not be able to build, sow, and deliver pizza without guest workers

Photo: Anton Novoderezhkin / TASS

The Russian economy faced a severe labor shortage against the backdrop of the crisis, Bloomberg said. In the implementation of large investment projects, from construction to gold mining, the state and private companies have always relied on guest workers, especially from post-Soviet countries. Labor migrants usually made up about 7% of the Russian labor force and created about 6% of GDP.

Now, when there has been a recovery in economic growth, it is extremely difficult to attract new guest workers because of the borders closed for almost a year. Many employers had to raise wages to lure local residents.

By the spring, when the demand for labor in agriculture will grow against the background of warming, the problem of labor shortages may become critical, Bloomberg notes.

How the Russian authorities will solve this problem, experts told the Free Press.

Sergey Karimov, Advisor to Stroykom I am sure that the picture painted by Bloomberg is too dark in comparison with reality.

– Firstly, American analysts exaggerate the fall in GDP. The decrease in the indicator will certainly be, but not so significant. Moreover, the market needs some time to adjust to new conditions. Accordingly, at first there will be a rebound back, but then the domestic labor market will begin to gain momentum, which will be facilitated by an increase in wages.

If we talk about the field of construction, which is well known to me, then the heads of large organizations come up with new and new ways to attract personnel, including replacing guest workers with workers from other regions. And in a couple of years, the share of such replacement may be 60% -70%. But in the near future it is impossible to exclude the failure of the construction deadlines for large-scale projects, since the market has not yet adapted to the new conditions.

In general, change will happen more quickly if the authorities support organizations dealing with internal labor migration. In addition, the development of outstaffing (provision of labor for workers) will reduce the unemployment rate in Russia.

General Director of the Rocket Work platform Anastasia Uskova

– In different regions of the country, the situation with the reduction of foreign labor is developing in different ways: somewhere the shortage was up to 20%, somewhere up to 50%.

The capitals suffered the most: Moscow and St. Petersburg, where the share of foreign labor has always been higher. If we consider the spheres, then these are services (33.5%), housing and communal services (25.8%) and construction (22.2%).

In total, according to the Ministry of Internal Affairs, as of early November, 1.798 million foreign citizens were employed in Russia. Last year there were 2.353 million.

The data of the Ministry of Internal Affairs also show a decrease in migration registrations – from 14.9 million to 7.5 million.The number of issued work permits and patents also decreased by more than a third, from almost 1.5 million in 2019 to 935.5 thousands in 2020.

“SP”: – Yes, it is clear that the number of guest workers is declining. But is this really a big threat to the economy as a whole and to individual companies?

– Migrants are very closely involved in the Russian economy: if you make a cut in the industries where the most migrants are employed, it will turn out that, according to my estimates, about 15% -20% of the country’s GDP is under attack.

For the economy, the outflow of labor means a drop in production rates and, as a result, a decrease in the revenue of enterprises, which reduces the overall business dynamics, the volume of tax revenues and slows down the process of economic recovery as a whole. And the main reason for the outflow was, of course, the epidemic.

Many decided to wait out this time with their families and returned to their homeland, many of them, due to the current situation and the closure of borders, cannot enter Russia. Mass vaccination can speed up the return of foreign forces, but this will not be done quickly due to the fact that access to vaccines in the CIS countries is still difficult, and on our side, regulation is required at the level of legislation.

“SP”: – Seasonal work in the fields will begin very soon, will there be enough workers? And if not, how will this affect the harvest and, of course, the prices for agricultural products?

– As I already said, the biggest blow from the shortage of foreign labor is felt by the spheres in which a large number of labor migrants are traditionally involved: first of all, construction and housing and communal services, courier services, the agricultural sector, public catering, etc. also suffer from a shortage of labor. the sphere of consumer services.

They will probably try to solve the lack of hands on the ground by internal migration, so that the vacant vacuum in the labor market will be occupied by unemployed Russians. However, without raising wages and improving working conditions, introducing a system of benefits for migrants, it is hard to believe in reality.

At the same time, an increase in the cost of labor in these areas will definitely lead to an increase in the cost of manufactured products. People can also be registered as self-employed – while reducing the tax burden on enterprises will increase wages and will not cost companies too much.

We are already witnessing an increase in the number of self-employed in the construction sector, it is possible that agrarians will also take up this experience.

“SP”: – Can the state by some methods stimulate an additional influx of guest workers?

– This way out of the situation may be a “preferential” entry already for guest workers. But business needs to resolve such issues directly with the government.

Perhaps federal significant large companies could be allowed to do this, provided, of course, sanitary and epidemiological control is ensured, compliance with the rules for registering a foreign worker, and the conclusion of an employment contract with him.

Part of the headaches for business in this case can also be solved by self-employment – the new tax regime is applicable to citizens of some CIS countries and former Soviet republics, and specialized services allow mass registration of workers as self-employed, form and sign contracts, report to the tax office without unnecessary operational troubles.

“SP”: – Can Russia do without migrants at all?

– Without raising wages, improving working conditions, modernizing production facilities and thereby increasing the attractiveness of low-skilled labor among our compatriots, the economy will continue to experience staff shortages in places where migrants used to work.

Moreover, the rise in the cost of labor will inevitably lead to an increase in prices. It is difficult to predict how prepared the top officials are for this, especially when prices for pasta and sugar are regulated by the president. Exactly as there is no certainty that the government is subsidizing the costs of entrepreneurs on wages – both the package of business support last year and the measures to support this year look rather modest.

Moreover, no one, even the most developed countries, can do without the labor of migrants. After all, it is corny cheaper.

However, in our opinion, self-employment may indeed become a temporary measure.

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