Is it possible to compare the pandemic and the current crisis? What was worse?
It’s possible. The pandemic was initially seen as a very short crisis. And although some production was stopped, it was stopped for a short time. Everyone looked at the crisis like: “the acute phase will pass and everything will work again.”
The current crisis means the severing of many economic ties. It looks more like the 1992 crisis after the collapse of the USSR, when the ties between firms located in different regions of the country and in different former Soviet republics actually ceased to exist. This is what’s happening now, only it’s not ties within the country, but between countries, being broken.
This crisis will be longer than the pandemic crisis. A crisis in the labor market was actually felt only in the second quarter of 2020. In the third quarter, it was already less tangible, and in the fourth it was almost gone. But the current crisis is constantly growing. I think that we haven’t yet seen its main effects, they are ahead.It seems like many people are worried about inflation and the fact that the indexation (if any) of wages isn’t keeping up with it. What are the chances that this could escalate into protests or strikes?
There are two things here. First, can inflation, unemployment – in a word, economic difficulties – spur unrest? The answer is clear: they can. Another question is what forms the discontent can take. For the discontent to take on mass, collective forms, there must be certain conditions. People should be able to organize in some way. Any protest must have a leader. The penalties for protest shouldn’t be too harsh. But in Russia there are no such conditions. Almost the entire opposition has been destroyed, the repression is quite severe. The protests have neither organization nor organizers.What about the unions?
There are practically no trade unions in Russia, except for the official ones. And the official unions are rubber stamps. They’ll do everything to confine discontent to “the kitchen.”Russian workers seem to have limited mobility. But in this crisis, some regions will suffer more than others. Will we see a migration of workers within the country because of this?
The notion that the Russian workforce is immobile is, in my view, wrong. Russian workers are very mobile
. This can be seen in the labor turnover data (in terms of hirings and separations) and the share of workers less than a year on the job. Meanwhile, generally we get the idea about low interregional mobility from Ministry of Internal Affairs data, which in turn is based on changes of residence. When people move, however, they often don’t make it into the statistics, as far from everyone deregisters in their "native" region and reregisters in their new one, plus they don’t always sell their apartments. It seems to me that we greatly underestimate the scale of interregional mobility. Of course, the mobility of some people is limited: they may have relatives who need care, they may not have the money or health to move. But try to do a renovation in Moscow, find a nanny or a nurse. You’ll encounter migrants not only from other countries, but also from other regions of Russia. The same is true in the sphere of taxis and retail.Russia is a world leader in terms of the share of people with a higher education. In one of your materials, you noted the problem of “over-education” in the Russian labor market – there are more highly educated people than there are suitable jobs for them. Given that the “quality” of jobs is getting worse, will the problem of “over-education” persist, or will people become less likely to get a higher education before entering the labor market?
The rise in demand for higher education is quite a long track. It’s attributable to both purely economic considerations (higher education provides the highest pickup in earnings; in a word, it pays and pays off) and the fact that higher education is becoming a kind of social norm. When everyone around has it, then not having it becomes a little uncomfortable. And parents with a higher education would hardly want their children to go without it. And the same goes for those who didn’t get a higher education: they say that times were hard, but now they’ve saved up and did everything so that their children graduate from university. And then life changes. But it’s really hard to get rid of such thinking.
Another thing – even when the job doesn’t require higher education, most applicants will still have it. Why would an employer take a person without a higher education if he can get someone with it? That person, from the employer’s point of view, will do better because she’s learned something. Even if she didn’t learn anything, having a higher education suggests that she has some kind of motivation, that she’s better in some senses than those who didn’t try to get it. Thus, the drive to get a higher education – this trend will continue, it’s very difficult to stop.Graduates who enter the labor market during a crisis face headwinds in terms of both employment prospects and income. What advice would you give to those who are just finishing their studies and going to work?
It's hard to give advice here. Indeed, those who enter the labor market during a recession face lengthy headwinds. We just went through the pandemic crisis, and those who entered the labor market “into corona” ran into big problems. Now there’s a new recession, new problems. Not much advice can be given: try to use all the opportunities available, try to acquire the skills that are in demand. Of course, in any crisis some professions suffer more, some less. You should look at what areas or professions have more opportunities and go there. Retrain, complete your education... Moreover, retraining concerns not only graduates, it concerns everyone. Life is continuous retraining. If a person stops retraining, she “leaves” this life. And the more intense the technological race, the more important it is to quickly retrain, otherwise you’ll very quickly find yourself on the sidelines.What is the outlook for the labor market?
The answer depends on the time frame. Throughout the rest of the year, little will change fundamentally. The labor market will increasingly become an employer's market and well-paid job opportunities will dry up. Wages won’t rise, and in real terms they’ll go down. In the medium term, a restructuring of employment will play out – toward simplification, primitivization and higher demand for blue instead of white collars. The process will be gradual, but long. At the same time, demand for new professions could emerge. For example, if the car fleet ages and new cars become rare, then old ones need repaired. And the demand for mechanics who can turn old tin cans into working cars could grow. The same is true for airplanes and computers.You mentioned that the labor market will become an employer's market. What does that mean and what are the implications?
It means that there will be many more jobseekers than vacancies. And employers who are hiring will dictate the terms. If the supply of labor doesn’t decrease and the demand for labor falls, then wages will go down. This is what always happens in a crisis.And what will happen to the Russian labor market if the hostilities continue for another six months or a year?
In any case, I think that all the trends that we’ve been discussing will continue. I think it’s going to be a very long story. Links have been severed that can’t be restored quickly. Therefore, it doesn’t depend on whether the hostilities end tomorrow, in three months or six months. I think everything will move in the same direction no matter what. Everything’s already in place.