Poverty drove Russian in the informal sector: millions of working informally

photo: Natalia Muslinkina

In the last decade, Rosstat recorded informal employment is stable at around 20% of the total working age population. The only exception is 2010, when this percentage has risen in price on the background of oil and economic growth slowed down to 16.4%.

Meanwhile, the informal sector is heterogeneous. Rosstat refers to the informally employed those who work in organizations that are not registered as legal entities. For example, employees in the individual enterprises and self-employed, farmers, family members who neoficialni help their relatives in the business. In other words, informal employment, Rosstat considers small economic units. Statistical office nonconformists thinks so: one of those who by his own admission he is working somewhere subtracted the number of jobs replaced in ulicah. People working in legal entities without registration of the contract or with salaries in envelopes, Rosstat does not include in its statistics. Thus, in understanding the Agency, informal employment and the shadow economy — different concepts.

On this basis, Rosstat does not take into account the millions of people who work in organisations to mouth — bypassing labor laws. And it is precisely this category of workers most vulnerable: they can be fired under any pretext, they are not protected by labour laws, their salaries are not charged taxes and contributions do not go, is not formed future pension. Such employment is called the shadow market. The number of participants does not assess state statistics, and calls only the hidden payroll is 25.9% of the “white” of the Fund or 11.4 trillion according to 2017.

Independent estimates of the shadow labour market are staggering population included Russians: the Center for socio-political monitoring of the Ranepa showed 30 million people working in the shadows. Of these, 21.7 million people — those who receives part of the salary in envelopes or have informal jobs if you have a main place of work. Accordingly, the remaining 8.3 million of Russians work without any clearance.

“Rosstat recorded growth of informal employment does not mean that more people were working for individual entrepreneurs. Mostly it means that the company-legal entity – LLC, JSC and JSC – are now increasingly conclude the employment contract with title companies, and other companies affiliated with them, small entities that are not registered as official employers. This allows these companies to avoid full liability of the employer, that is not paid in full overtime, sick leave, vacation Neuguinea, LCA. This often saves employers an average hand in the name of General cost reductions,” explains the expert “International financial centre” Vladimir rozhankovsky.

As for those who work or moonlighting in the informal sector, they are becoming more because the “white” income people life is not enough. “To find a formal job for good money is very difficult. However, everyone needs money. So, for example, students often work without registration. Pensioners and is not beneficial to get officially. Teachers for a part-time tutoring, and sometimes leave schools when they realize that they get more working for yourself”, – says head of analytical Department of company “Finist” Katya Frankel.

The expert notes that with such a low minimum wage level, as in Russia, informal employment grows by itself. “Employers must pay wages not less than the minimum wage than they do. However, on 11 thousand roubles a month is unrealistic to live. Therefore people agree on the wages in envelopes and put in priority not the status of the work, and the amount you receive. While utilities in Russia index with a higher rate (4.1%) than increasing the minimum wage (by 1%). If it goes on, “gray” and “informal” will be much more,” concluded Frankel.

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