Changing dynamics of the number of unemployed as a mirror of the Russian economy

Key economic indicators in Russia in the 1st quarter of 2015 showed a decrease within 4% -10%, as predicted back in 2014. According to experts of the Information Agency Credinform, the Russian economy is significantly affected primarily by internal problems. This situation is aggravated by such factors as: the mutual sanctions of Russia and the Western countries; falling prices for oil and other natural resources; weakening of the ruble against the US dollar and euro; capital outflow from Russia; decline in investments; business recession etc. Along with that, preliminary results of economic development in the 2nd quarter of 2015 show that, in spite of slowdown, the decline rates of the main indicators have been slowing from month to month.

Mentioned negative trends in the Russian economy appear mirror image in the domestic labor market. Thus, the number of unemployed, according to the Federal State Statistics Service (Rosstat) in accordance with the methodology of the International Labour Organization, has already exceeded 4 mln people in the 1st half of 2015 (s. Table). Though in 2014 this indicator made slightly less than 3,9 mln people. And starting from 2010 through 2014 there was a significant decrease in the number of unemployed, which reached almost 30% in 2014 compared with 2010. However, following the results of the 1st half of 2015 the growth of the average value of the number of unemployed amounted to more than 10% against the indicator of the year 2014.

Table. Dynamics of the number of unemployed in May-June 2015
  Total number of
Number of officially
registered unemployed
(as of the end of month)
  in % to   in % to
ths people corresponding period of the
previous year
previous period ths people corresponding period of the
previous year
previous period
January 4167 97,9 1) 103,0 1) 924 97,3 1) 102,6 1)
February 4410 101,5 1) 105,8 991 102,1 1) 107,2
March 4503 108,7 1) 102,1 1001 104,7 1) 101,1
April 4420 108,8 1) 98,2 1017 107,4 1) 101,5
May 4292 113,5 1) 97,1 1004 109,6 1) 98,8
June 4091 2) 108,6 1) 95,3 974 110,9 1) 97,0

The data of the Federal State Statistics Service:
1) In order to ensure the statistical comparability of data, the relative indicators of the Russian Federation are calculated without taking into account the information on the Republic of Crimea and Sevastopol.
2) Preliminary data.

Peak number of unemployed in the 1st half was in March-April 2015, when it reached 4,5 mln people in March, that made 5,9% of the economically active population, in April – 4,4 mln people (5.8%). Although in January 2015 there were 4,2 mln unemployed people (5,5%) noticed. Such way the labor market reacted to the negative trends of the Russian economy of the 1st quarter. Because the rates of economy decline have slowed in the 2nd quarter, forecasts for the improvement have appeared in the estimates of experts. It has certainly resulted in the reducing dynamics on the labor market. In June, according to preliminary results, the number of unemployed reached only 4,1 mln people (5,4%).

Similar trends are appropriate to the indicator of the number of officially registered unemployed in the 1st half of 2015 (s. Table). Also, the peak number of officially unemployed persons was in March-April 2015. In March the number of officially unemployed amounted to 1001 ths people, in April - 1017 ths people. As percent of the previous month the highest increase in the number is registered in February – 7,2%, in March and April the growth rate slowed down to 1,1% and 1,5% respectively, and in June the decrease amounted to 3%. On the other hand, the experts believe that the trend of decline of the number of unemployed is of seasonal nature.

The largest number of layoffs, according to experts, is noticed among lending managers; specialists in loans; securities analysts; sales managers, development managers; real estate brokers and others. It is believed that the current situation in the Russian economy has changed the balance of power in the labor market – employers have become dominant in it. Such situation allows them to dictate their conditions by recruitment of employees.

Against this background, the Ministry of Labour has fixed a stringency on the market in 19 regions of Russia. Thus, by the order dated May 27, 2015 the Ministry of Labor has formed a list of areas classified as areas with the tense situation in the labor market in 2015. Most of territories are located in the Siberian Federal District (8 areas) and the North-Caucasian Federal District (6). The rest areas are in the Southern Federal District - 2, in the North-Western FD - 1, Ural FD - 1, Far-Eastern Federal District - 1.

In the current economic conditions 52 bln RUB were allocated by the state for the fight against unemployment within the anti-crisis plan. It will allow to direct state subsidies for public works; temporary employment of citizens; creation of additional work places; to organize citizens, who has lost the job, for using them in infrastructure and other sectors.

Changes in state registration procedure of legal entities

By the Federal Law as of 30.03.2015 N 67-FL “On introducing amendments to certain legislative acts of the RF in terms reliability of data filed under the state registration of legal entities and sole entrepreneurs” the amendments are inserted to the Criminal Code of the RF, Administrative Violations Code of RF, Fundamental Principles of the Legislation of the RF on the Notaries, Federal Laws “On limited liabilities companies”, “On state registration of legal entities and sole entrepreneurs”.

The made adjustments will significantly influence on the day-to-day operations of business entities.

On the whole, the amendments are designed to tighten the control of the firms incorporated by dummy entities. It is referred to figure-head managers which occupy the position on paper only. They don’t take part in administration of the company. After the introduction of amendments, making any entries on dummy entities into Unified State Register of Legal Entities (EGRUL) is now criminally liable. Delivery and appropriation of documents for incorporation through a counterfeit is treated as a crime apart from comprehending the consequences of the further use of this legal entity.

The verification procedure of add-in or already contained in EGRUL data will be introduced starting January 1, 2016. Corresponding examination will be initiated by reasonable distrust of registration authority in its verification, including delivery of protests of concerned parties in reference to the future amendments registration. In such cases the termination of registration proceedings for less than 1 month is provided.

The general reason for abandon of registration will be failure to follow the procedure of liquidation or reorganization of legal entities or other statutory requirements, set by regulation of the RF for state registration.

Moreover the registration authority is authorized to make entries concerning unreliable data about legal entity by itself excluding notification of legal entity and performance of judicial act.

Change of legal address will put dishonest entrepreneurs to certain troubles. The registration of the new address will be carried out by the Federal Tax Service Inspection at the new place of company’s registration and upon prior notice. Introducing of changes in location of the legal entity will be possible in 20 days from the date of making corresponding entry in EGRUL. In such a case it will be necessary to represent the decision on change of legal entity location as well as documents giving right to use a real estate item situated at the new address.

From the moment of law coming into effect, i.e. from March 30, 2015 it is possible to make entry on liquidation into EGRUL only after 2 months from the moment of making entry on liquidation process beginning. It is forbidden to make state registration of company’s liquidation before termination of court case on the corresponding claim or before the moment of irreversible decision based on results of field tax inspection.

Besides, it became possible to prosecute administrative investigations against violation of state registration law. In addition, the period of limitation for the institution of proceedings is raised up to 1 year. The possibility to disqualify the violator for the term from 1 to 3 years for delivery of unreliable data to EGRUL or repeated failure to deliver the data is enacted by the Code of Administrative Procedure. Fine at the rate of RUB 5 to 10 thousand is charged for a single violation. Furthermore the shareholders (participants) of legal entities might be held administrative liable.

Customers of Information and Analytical System Globas-i® have an opportunity to control the changes concerning contactors, including their registration documents, with the help of «Monitoring service».