Oct 22, 2021
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Moscow in lockdown: Business will pay from the last money

Moscow in lockdown: Business will pay from the last money

Photo: Valery Sharifulin / TASS

October 20 the President of the Russian Federation Vladimir Putin after several days of high-level discussion, officially announced a non-working week from October 30 to November 7. He also instructed the government to work out measures to support small and medium-sized businesses in connection with the new restrictive measures. The President noted that wages will remain for the entire period of non-working days. But, as the experience of previous lockdowns shows, only those who work officially, and, best of all, in the public sector, can count on this, while the rest are left asking the question “At whose expense is this banquet?”

The president, however, acknowledged that this decision, first of all, will fall on the shoulders of employers. According to the calculations of the first deputy prime minister Andrey Belousov, business losses from the introduction of non-working days may amount to about 60 billion rubles. Therefore, he proposed, as in the spring of last year, to make a lump sum payment in the amount of one minimum wage (the minimum wage, 12,792 rubles on average throughout the country) for each employee.

This will require about 27 billion rubles, coverage will be about 2 million people. Enterprises in the field of sports, hotel business, catering, additional education, consumer services, culture, leisure and entertainment and some others will be able to apply for grants.

But, again from previous experience, we can say that not everyone will receive payments, especially for small businesses, not to mention the self-employed. Ombudsman of Russia for Small and Medium Business Anastasia Tatulova in a conversation with “SP” she said that if we are talking about the complete closure of enterprises in the service sector, then the planned payments will not be enough to compensate for a significant part of the losses. However, it is not yet clear how large-scale and lengthy the upcoming lockdown will be, perhaps the authorities themselves have not yet made a final decision.

– We are in constant dialogue with the city authorities and hope that today we will receive some clarifications. When the final decisions are announced, we will be able to substantively discuss them. So far, we do not understand anything at all. One gets the impression that we are talking about complete closure.

“SP”: – If the situation develops according to this scenario, how big will the business’s losses be and will the support of the authorities compensate them?

– It depends on what decisions will be made. If we are talking about the fact that people will be closed for two weeks or, God forbid, for a month, the payment of the minimum wage will not cover even a hundredth of the losses. And this cannot be considered compensation.

If I pay a person a salary of one hundred thousand rubles and 40 thousand more taxes from it, then the payment of the minimum wage in the amount of 20 thousand will not even be enough to return taxes to the state. This is just a mockery.

If we are talking about a three-day closure, such compensation is acceptable, but no one believes that the lockdown will be so short, and it would not make sense. I believe that the state should fully compensate business for salaries for the entire period of closure, this is my firm position.

We have been sacrificed many times during these one and a half years. They experimented with QR codes on us, we were told that everything will be fine if we strain and vaccinate 60% of employees, and we persuaded people, paid them money, vaccinated foreign workers at our own expense. And when it turns out that all this did not help, and they tell us: “Let us close you again,” I can answer: “Come on, but please pay us all the costs associated with this.”

After this conversation, at about 12:00, the city authorities clarified the parameters of the non-working week. As stated in the message on the official website of the mayor’s office, from October 28 to November 7, the activities of enterprises and organizations in the sphere of trade, services, catering, sports, culture, recreation and entertainment, film screenings and others are suspended, with the exception of the sale of medicines, food and goods. necessity. Restaurants and cafes can operate takeaway and delivery of ready-made meals.

Alexey Korenev, leading analyst of the Finam group of companies believes that a non-working week will lead to a drop in incomes of the population and a slowdown in EAP, especially if it goes into a long lockdown.

– Like the previous two lockdowns, this one leaves the impression that the decision was made spontaneously and no serious calculations were made at the top. If the decision was taken carefully and slowly, the press would know about it, and it would be possible to prepare enterprises and people for this idea in advance, to develop support programs. One gets the feeling that it was just that somewhere at the meeting they decided that once a short week, then you can drive people home again, maybe it will help fight the disease.

“SP”: – What will the non-working days turn out to be for the economy?

– You can look at previous lockdowns. The first, which was in the first quarter of 2020, cost 0.49% of GDP. The next lockdown in the second quarter of 2020 was much more difficult, because the enterprises were already drained of blood and survived with their last bit of strength. It cost the economy 7.53% of GDP. This is a very serious blow.

Since then, many have managed to recover, but not all, and here is the third lockdown. In addition, the failed companies have been replaced by new ones, which are only spinning up the business, they have only collected loans that need to be repaid. And why give them away, if the enterprise stops, and at the same time it is necessary to pay salaries to employees? Companies will somehow get out. Most likely, those who will be sent on full-fledged vacations will not receive a salary or will receive it partially. And trying to “run into” businessmen and fine them is useless, they will throw up their hands and say that there is no money, and there is nothing to pay from, both salaries and fines.

I think there will be problems in the labor market, the incomes of citizens will fall, because some part of the population will be without wages at this time. Business has largely managed to adapt in the year and a half that we have been living with the coronavirus. The first lockdown came as a shock; a huge number of enterprises did not know how to work remotely. Now the business has gained experience in such conditions – this is online sales, which are rapidly developing, and remote work, and stocks in warehouses, formed in case of such a situation, and experience of intra-corporate interaction and work with counterparties.

The downside is that many companies have not had time to fully recover from past restrictions, and many do not have the resources to survive another blow. It seems to me that when the government announced a non-working week, it hoped that during it it would become clear what to do next. If everything is really bad in the economy, the restrictions will be lifted; if it breathes, they can be extended.

“SP”: – How justified is the new lockdown now?

– We see a lot of illogical in the fight of the authorities against the coronavirus. It is forbidden to go to work, although during the pandemic, many enterprises have developed strict sanitary standards, up to the point that you need to walk along the corridors in masks. And in a crowded subway and bus, where people are packed and breathing on each other, please, you can ride. That is, where it is possible to get infected, restrictions are not introduced, but in safer places like offices with sanitizers and regular cleaning, they are.

Moreover, I doubt very much that during the non-working week people will stay at home. Most likely, they will go somewhere and will be packed into the same transport. Therefore, it is difficult to say what the third lockdown will turn out to be. I think that the GDP and incomes of citizens will suffer anyway, and inflation will whip up.

“SP” reminds that just a few weeks ago, representatives of the authorities said that there were no plans to introduce a new lockdown in the country. This was announced on October 1 by the head of the operational headquarters, Deputy Prime Minister Tatiana Golikova. Meanwhile, even then, the daily mortality record was updated daily – on October 1, it amounted to 887 cases, the number of new patients amounted to 24.5 thousand.

On October 20, the number of new cases of the disease amounted to just over 34 thousand, 1028 deaths were recorded. It is also worth noting that parliamentary elections were held in the country in September, and many political analysts assumed that no serious restrictions would be introduced before the vote, so as not to worsen the social well-being of the population. However, it is possible that this decision and the weakening of sanitary measures, including, could result in an October surge in morbidity.

Immunologist Vladimir Bolibok in the commentary “SP” suggested that the decision to introduce a non-working week right now may be due to the exhaustion of the bed capacity in the country. Another reason may be to encourage people to get vaccinated.

“The most important thing is that lethality literally rolls over in our country – no other country has such a level. This is, in fact, a failure in the vaccination of the elderly contingent and, accordingly, now it is the pensioners who die in the first place. However, a non-working week is unlikely to affect the decrease in mortality. After all, retirees are sitting at home anyway, for them there is no difference – working days or not. But to get older people to get vaccinated does not solve the problem, ”the doctor said.

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