Issue 4353. Last Updated: 03/20/2010

Wage Arrears Hit 8.3%

Reuters
Wage arrears rose 8.3 percent last month to a new three-year high, affecting half a million people, the State Statistics Service data showed Friday.

Arrears, an indicator of stress for companies and a cause of mass protests in 1998, stood at 8.76 billion rubles ($262 million) on April 1, compared with 8.09 billion rubles a month earlier.

After the 1998 crisis, companies resorted to paying workers in goods, and wage arrears reached $3.8 billion. Unpaid wages sparked social unrest, and the payment of arrears was an issue in Vladimir Putin's 2000 presidential campaign. This time, protests have been relatively small scale so far.

The lion's share of arrears, 94.5 percent, was attributed to companies not having enough cash. The rest was because of not receiving local, regional or federal budget funds on time.

Of the sectors, manufacturing accounted for nearly half of the wage arrears. Russia's manufacturers have slashed production because of slumping domestic and global demand while lower commodity prices have further strained their resources. About one-fifth of the unpaid wages were in the transportation sector, where freight volumes and passenger numbers have slumped. Construction accounted for 12 percent of arrears and agriculture for 7 percent.

Some 30 percent of the current wage arrears date back to last year, while 8 percent were accumulated even earlier.



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