Major Companies Have Left Russia, And Huge Sanctions Have Been Imposed, Yet The Russian Unemployment Rate Is Lower Than The European Union’s

Despite all of the sanctions imposed upon, and all the companies withdrawing from Russia, the Russian unemployment rate is beating that of the EU. As we read in Radio Free Europe:

Western nations have imposed sweeping financial and technological sanctions on Russia, battering a range of economic sectors from auto production and information technology to travel and pushing the nation into recession.

At the same time, a slew of Western companies employing hundreds and in some cases thousands of Russian citizens have pulled out to protest the invasion of Ukraine.

Despite the severe economic headwinds, Russian unemployment fell to a post-Soviet low of just 3.9 percent in May – far below the European Union average and not far above the U.S. figure of 3.6 percent — and remained at the same level in June.

But while few experts believe the official Russian jobless figures are watertight, many say the main explanation for the low rate is not dubious statistics.

Instead, they argue, it’s a combination of downward demographic trends, a government with a long-standing preference for cutting hours or wages over jobs — in part to keep politically risky unemployment in check — and extensive experience in handling economic upheaval.

The mass exodus of working-age people from Russia following the invasion of Ukraine in February, the large proportion of vulnerable jobs held by Central Asian migrants, and growing demand for bodies for the war — in which the lower Western estimates of Russian deaths exceed 15,000 — are also playing a significant role in keeping unemployment down.

Job losses are expected to increase starting in the autumn as seasonal work in agriculture, construction, and tourism dries up and the sanctions-stoked recession grinds deeper.

But they are still forecast to end the year lower than in many European countries and remain stable next year as these trends continue to play out.

“The fact is that the Kremlin, employers, and people are well used to economic crisis,” Chris Weafer, founder of the consultancy group Macro-Advisory, told RFE/RL.

“There is a well-developed system of employment and social supports which is again kicking in” and keeping unemployment low, he said.