6 Sep 2023 14:14

'Anomalous' low unemployment in Russia holding back economic development, is 'a serious challenge to the system' - Reshetnikov

MOSCOW. Sept 6 (Interfax) - Extremely low unemployment in Russia has put the brakes on economic growth, with human capital becoming the most scarce resource, and this is a "serious challenge to the system," Maxim Reshetnikov, Russian Minister of Economic Development, said at a forum for social innovations in the regions.

"It's hard to argue with the fact that human capital, the human resource, has become the scarcest resource in the economy. Not investments, not finance, and not even technology, which are all difficult issues. The main problem is the human resource. This is also reflected in the extremely low unemployment rate: 3% is abnormal for us," the minister said.

"This is definitely holding back the development of the economy, and is not some kind of plus. This is reflected in the huge growth in wages - generally not a bad thing if it were not for the shortage of personnel, the shortage of specialists," Reshetnikov emphasized.

The deficit is both quantitative and qualitative, he said.

"This is a very serious systemic challenge," the minister said.

To solve this problem, Reshetnikov specifically suggested the more active involvement of migrants in the economy, replicating the mechanisms of the national project to increase labor productivity to a greater number of enterprises, and the active introduction of artificial intelligence into production processes.

"We will have to solve the migration issue. We are in the Eurasian economic space; we have an open labor market. Of course, the challenges of the last year-and-a-half indicate that there is a large outflow of population. We must work more actively to attract migrants to the economy. Right next door, Central Asia is an actively growing region with a lot of workers, and we are now actively investing in Russian schools there, but all this needs to turn into a conscious policy to keep the best talents from neighboring countries here, because these workers are effective, and the economy needs them. No one should assume they will come here regardless. In fact, we are in very tough competition for this labor pool with China, Southeast Asia, and other countries," Reshetnikov said.

As reported, unemployment in Russia in July 2023 revisited its historical low since tracking began in 1991, falling to 3.0% after 3.1% recorded in June. In previous months, the country's unemployment rate was 3.2% in May, 3.3% in April, 3.5% in March, 3.5% in February, and 3.6% in January.