Unemployment

   In the Union of Soviet Socialist Republics (USSR), unemployment, a social “evil” associated with capitalism, was officially declared to be absent in Soviet society, despite clear evidence to the contrary. The right to employment was considered sacrosanct, and failure to work was viewed as a crime against the state. However, perestroika inevitably turned many Soviet citizens out of work, while others came to suffer from chronic underemployment. After the dissolution of the Soviet Union, the problem was exacerbated as the economy shrunk dramatically, particularly in heavy industry and the public sector. Boris Yeltsin’s combination of rapid privatization and the elimination of mass subsidies quickly led to a rise in joblessness. In 1997, the official statistics registered a rate of 10 percent; however, actual figures were estimated to be much higher. The state’s inability to pay unemployment benefits, combined with wage arrears, proved devastating to the economy; the 1998 ruble crisis only worsened the situation.

   Under Vladimir Putin, the economy improved significantly, mainly thanks to oil and natural gas exports, but also as a result of hitting rock bottom in 1998, after nearly a decade of industrial rationalization. Upon taking office, Putin inherited a country with a joblessness rate of more than 12 percent; by 2002, this had dropped to 8 percent, where it would remain for the next three years. In 2005, unemployment began another period of steady decline, reaching 6.2 percent in 2008. As a result of the 2008–2009 global economic crisis, the rate rose to 8 percent in early 2009. President Dmitry Medvyedev responded by announcing a $1.3 million package to create new jobs and fund retraining programs.