Jobless Figure Likely To Spike by Year-End

The number of registered unemployed is likely to rise 18 percent by the end of the year, Federal Labor and Employment Service head Yury Gertsy said Wednesday, a figure that calls into question the efficacy of the government's multibillion-dollar anti-crisis plan.

As many as 2.6 million people will be registered as unemployed by the end of the year, Gertsy said at the presentation of a joint report by the service and the World Bank. The report called the situation on the labor market difficult but in the process of stabilization.

Registered unemployment dropped 0.8 percent in the third week of June, Gertsy said, bringing the number of registered unemployed to 2.18 million.

Total unemployment rose to 10.2 percent in April from 6 percent a year ago, while the number of jobs in the economy fell 21 percent year on year in May, the report said. Total unemployment rose from 4.5 million to 7.7 million people in April, the report said.

April's real wages were down an average of 4 percent from the same period last year, while the fall in construction wages reached 13 percent.

Labor markets in wealthier regions have seen a sharper fall, narrowing income disparities among regions. Unemployment has risen the most in the Vologda, Nizhny Novgorod and Chelyabinsk regions.

Moscow remains the job center of the country with an unemployment rate of 0.83 percent in June -- the lowest in the country. It is followed by the Krasnodar region and St. Petersburg. The republic of Tuva still has the highest unemployment rate at 8.9 percent.

Government officials have been expressing optimism on the improvements in the job market since April, when registered unemployment dropped for the first time this year.

After seeing the April figures, Deputy Prime Minister Alexander Zhukov said in May that regional programs will prevent a second wave of the crisis.

"In general, we have reversed the situation on the labor market, and it will keep improving," he said

The government is funneling 25.4 billion rubles ($816 million) this year into programs aimed at boosting employment.

But recent improvements are largely caused by seasonal trends, and the summer drop in unemployment is "not as prominent as in recent years," the report said.

Registered unemployment figures can fluctuate by about 300,000 jobs over the course of a year, said Vladimir Gimpelson, who directs the Center of Labor Studies at the Higher School of Economics. The slight improvement seen right now is entirely seasonal, while the effect of government measures will "most likely be zero, and possibly negative," he said. Government measures to keep unemployment down amount to "people sweeping the factory courtyard rather than standing next to their machines," which does not improve the economic situation.

The vast majority of the anti-crisis money, nearly 80 percent, was poured into organizing public and temporary works, according to the report.

Even government officials are acknowledging that state support has not lived up to its promise. In the Northwestern Federal District, anti-crisis measures seem to be ineffective, as only 14,000 people were employed through regional anti-crisis programs instead of the planned 95,000, Yevgeny Lukyanov, presidential envoy to the district, said last week, Baltinfo agency reported.

"These efforts are like gargling to cure a serious illness," Gimpelson said. If the government is serious about improving the economy, it should rethink its strategy of heavy intervention in the economy, he said. "The crisis was worsened by the government's interference in business agreements, as well as the monopolized economy and dependence on raw materials," Gimpelson said.