How record low unemployment affected the economy

Abnormally low unemployment is slowing down the country’s economy, Economic Development Minister Maksim Reshetnikov said on September 6 at the regional social innovation forum. “The main problem is the human resource. This is also reflected in the extremely low unemployment rate: 3% – after all, this is abnormal for us. This is definitely a brake on the development of the economy, and not some kind of plus,” he said. The Minister noted that the shortage of personnel – both quantitative and qualitative – is a “serious systemic challenge.”

The unemployment rate in July this year again updated the record and amounted to 3% – this is the lowest figure on record since 1991. The previous low (3.1%) was recorded a month earlier. More than half (60%) of Russian employers surveyed by the Bank of Russia in August reported a shortage of employees, according to a recent report by the Regional Economy regulator. At the same time, 75% of companies are trying to solve the problem by raising salaries for employees, follows from the document. Experts call wage growth a pro-inflationary risk and a serious challenge for the country.