7 million Russians suffer from wage arrears

Around 7 million people in Russia are not paid on time. According to the Russian President's press office, the total wage backlog stood at 34.1 billion roubles (USD 1.1 billion) on April 1, 2003. Of this total, 4.2 billion roubles (USD 136 million) was the result of budget shortfalls both locally and nationally. Experts from the presidential administration say that, in the first quarter of 2003, Russian regions received 49.9 billion roubles (USD 1.6 billion) in subsidies and 1.6 billion roubles (USD 51.9 million) in loans to ease their financial situation. This allowed wage arrears to be cleared in over half the regions. However, in 34 regions the federal assistance failed to change the situation substantially. In these regions the backlog rose by an average of 15.8% in the first quarter.

The presidential administration says that the main reasons for the absence of funds for paying wages are a lack of integration between different budgets, and ineffective attempts by the regions and local government to improve the economic situation. Despite the limited availability of budgetary funds, some are diverted for other purposes or used inefficiently.

The experts also note that breaches of the Russian Labour Code increase social tension. 3,900 people went on strike last year in protest at not being paid, and in the first quarter of this year there were 2,300 people on strike. The absence of funds for paying wages also leads to other breaches of the Code: enforced switches to part time work, enforced unpaid leave, and non-payment of benefits.

The presidential administration's experts believe that the government must take additional measures to mobilise resources into a consolidated budget and to clear existing wage arrears. The Federal Labour Inspectorate should do more to ensure that legislation regarding the workplace is enforced.