On all four sides – Newspaper Kommersant No. 50 (7495) dated 03/24/2023

The Institute for Social Policy of the Higher School of Economics (HSE) presented four possible scenarios for the development of the Russian labor market and changes in living standards in the period up to 2030. They describe various combinations of the degree of sanctions pressure on the Russian Federation and the prospects for the development of the global economy. An improvement in real income and poverty levels, according to experts, can only be ensured by a combination of global GDP growth and the easing of sanctions. In other scenarios that seem more realistic, the population of the Russian Federation will face an increase in unemployment and poverty, with a reduction in income and wages. The consequence of these processes will be a decrease in the share of the middle class.

The four possible scenarios for the development of the Russian labor market and changes in living standards, prepared by the HSE Institute for Social Policy, are based on a survey of 25 specialized economists from various scientific institutions of the Russian Federation. In the course of a survey conducted according to the foresight methodology (expert assessment of the strategic directions of socio-economic and innovative development), the respondents gave their forecasts about the possible trajectories of changes in unemployment and employment levels, poverty indicators and the share of the middle class. All scenarios are also based on the macroeconomic forecast prepared by HSE analysts.

The first of the resulting scenarios – “New Engagement” – involves the simultaneous easing of sanctions and the growth of the global economy. According to it, many industries that provide the basic needs of the economy and the population will show a moderate increase in the share of employees as the shocks of 2022 are overcome. These industries include construction, industry, agriculture, and tourism. Under such a scenario, the dynamics of employment in transport, logistics and trade may be relatively favorable. Until 2025, experts expect an increase in the number of entrepreneurs and the self-employed (however, by 2030 this process will begin to slow down). Due to the positive dynamics of the labor market, household incomes under this scenario will exceed the level of 2021 by about 2%, wages will increase in real terms by 2% by 2025 and by 5% by 2030. The expected poverty rate under such a positive scenario in 2026-2030 could be 9.8% (in 2022, according to Rosstat, it was 11.8%). The share of the middle class, most likely, will first decline from the current approximate 28%, and then by 2030 will grow to 30%.

The second scenario, “out of work,” is based on the assumption that the world economy will grow and sanctions against Russia will intensify. In this case, experts expect the unemployment rate to rise to 6% by 2025 and to 5.4% by 2030, and a reduction in real incomes and wages by about 7% by 2025. The poverty level will rise to 14% of the population, and the middle class will shrink to 15% and change its composition – the share of law enforcement officers, IT specialists and entrepreneurs will increase in it.

The third scenario, which experts called “Warehouse on fire”, assumes that sanctions against Russia will weaken, but the global economy will enter a phase of stagnation or recession. In this case, the unemployment rate will rise to 5.8% by 2025 and remain at almost the same level until 2030. Employment will decrease in the areas of catering, in the hotel and tourism business, in finance and insurance, and will grow in the field of information technology, transport and logistics. Forecasts of real money incomes, the dynamics of the poverty level and the reduction in the size of the middle class are almost the same as in the second scenario.

Finally, the fourth scenario – “Turbulent Lost Decade” – paints the most pessimistic picture of the development of the labor market and the economy as a whole. It is being implemented with increased sanctions pressure, combined with the global crisis and the stagnation of the world economy. The unemployment rate by 2030 may reach 6.8%, the risks of unemployment may manifest themselves in relation to large groups of the population, the indicators of real incomes and real wages will decrease. The poverty rate in 2026-2030 will be 18.7%, and the share of the middle class will be reduced to 10-15% of the population – to the levels of the 1990s.

Anastasia Manuylova