Russia is seeking ways to cope with chronic labor shortages. Russia's Central Bank conducted extensive interviews with employers in the non-financial sectors of the economy and found that the labor shortage was at record levels. The shortage is compounded by the increasing burden on industry. Defense industries are working round the clock for the first time in post-Soviet history, and the rest of the industries have to plug the hole left by the departure of foreign companies. In agriculture, some enterprises are on the verge of closing due to labor shortages since the outbreak of hostilities. Igor Mukhanin, president of the Russian Gardeners Association described the situation thus: "Finding a normal agronomist, for example, is very difficult. There is also a deficit among managers. Among tractor drivers, 50-60% are pensioners. If five or seven young tractor drivers are removed from the enterprise, it can be closed. People are taken away, but tractors, which cost 20-30 million rubles each, remain."[1]
Not only is the labor market encountering shortages but it is also increasingly growing older. Based on the government statistics, the number of employees under 35 decreased last year by 1.3 million people. Part of the reason for the decline is the catastrophic decline in birth rates that followed the collapse of the Soviet Union in 1991, which was accompanied by severe economic privations. Young workers now constitute 30% of the country's employees. This is an all-time-low. The recent mobilization, and the flight from it, compounds the shortage of younger employees.
Economist Nikolay Korzhenevsky estimates the painful impact on the Russian economy:
"The problem of labor shortages will eventually lead to a sustained lower potential growth rate for the Russian economy. Some of these assessments already exist. I would say that Russia will miss about 0.5% of GDP in the next five years solely because of the situation on the labor market and the reduction in supply in 2022."[2]
Nikolay Korzhenevsky (Source: Radiokp.ru)
The problem has caught the eye of officialdom that seeks solutions to meet the growing need for specialists. The Labor Ministry has tried to stimulate the employment of minors by encouraging employment during summer holidays. There was also a proposal to abolish the need for a guardian's consent for youths over the age of fourteen to be able to work. Labor Minister Anton Kotyakov wants to create conditions for young people to work in the industries prioritized by the state by encouraging their choice of specialization during the higher education and at the stage of seeking employment following the completion of training.[3]
Minister of Labor Anton Kotyakov (Ria.ru)
In the current atmosphere of crisis, it was perhaps inevitable that proposals for more coercive intervention by the government would surface, including a return to the Soviet practice of assigning graduates to jobs that needed to be filled.
The State Council (legislature) of Tatarstan has presented a bill to the State Duma under which students whose studies are covered by the state would sign an agreement for compulsory employment for a period of three years. According to the draft bill, four months prior to receiving the diploma, a special commission under the aegis of the university administration will determine the specialist's workplace for his first three years of employment. The bill is described as a win-win – the graduates will be guaranteed a job and companies will be provided with trained personnel.
Professor Alexander Safronov of the government's Finance University is skeptical. First of all, such targeted admission already exists upon the request of a government department or enterprise. However, under the Russian Constitution forced labor is forbidden. Forcing the graduate who refuses to work at the job assigned them to repay the tuition will not be effective either: "Why don't students want to work after university under an allocation policy? Because of low wages and inadequate social infrastructure. Naturally, such a student will still work for three years. But the quality of his work (assuming he will be poorly motivated) will be poor as well. Does the state need an employee to fulfil his professional duties in this way? I doubt it." Safronov favored an incentive policy to attract workers.[4]
Aleksandr Safronov (Source: Radiokp.ru)
In contrast, Associate Professor Mikhail Gundarin of the Russian Social University claimed that the bill was not unfair to the students and that the number of state-funded places in higher education was not that high anyway. There was some degree of fairness in asking for reimbursement of tuition: "If we look at where former state-funded students with technical degrees work, we see that they often choose job positions unconnected with their education (for instance, in commerce or elsewhere). And there is some logic, some justice here, as the state has the right to say to them: we have been educating you for several years to be an engineer, and you are choosing trade in pantyhose sales. On the other hand, a student may argue: 'I'm ready to work as an engineer if it is a good modern enterprise with decent wages and normal working conditions.'"
Some students could find the system advantageous. "A lot of people are ready, because finding a job is a difficult and tedious task. Sometimes employers need specialists with experience, which, for obvious reasons, former students do not have. This means, naturally, that there is a problem with finding employment according to the qualifications obtained. For example, a pharmaceutical and biotechnology company might hire one student from an entire course, while the rest would have to 'sink or swim' on their own."[5] Despite this, Gundarin felt that a job fair format where the element of choice was preserved would be superior.
Dmitry Drize, senior columnist for the Russian daily Kommersant, felt that the Tatarstan proposal smacked of serfdom. Unfortunately, the blast-from-the-Soviet-past proposals would keep cropping up. Drize wrote:
"The State Council of Tatarstan has prepared a draft law, which proposes a return to the old Soviet system of allocating [students to workplaces] in Russia. The bottom line is that when a student applies to state-funded spots at universities, he signs a contract, i.e., an obligation to work for three years within his specialty, at a workplace the Motherland dictates (rather than where he or she would want). Otherwise, such a student would have to pay back the tuition fees for all the years of study.
"A similar mechanism is already in place in Belarus. There are parallels to serfdom, but the logic is as follows: the state has spent money on you, be good enough to return it. The idea is not novel. It has been proposed at different times but has not been passed. Why, you ask? Because it contradicts the capitalist system, or, for that matter, simply the system of [sound] economic management.
"Demand for specialists is determined by the market: if a certain specialist is needed, he will be in demand; if not, either he is a poor employee, or there is something off with his education, as it does not correspond to current [labor market] realities. And this is an issue for the general education system, not of a specific graduate.
"As for repaying debts to the state, the employee repays them in the form of taxes and benefits he brings by developing the economy and attaining achievements at his particular workplace. Meanwhile, the type of company (be it state or private) where he works is totally irrelevant. You can even work abroad and then come back and apply the experience gained at home.
"Be that as it may, enough of the mundane truths. You are probably concerned with why the document has reappeared in the information and legislative space. The answer is quite simple: because some graduates (even talented ones) are looking in the direction of unfriendly countries, they want to work there. Meanwhile, the Russian Federation is in a difficult situation and needs specialists.
"True, there is a problem: the Russian state is not always prepared to pay young talents as much as they think they are worth. Why do [our] satellites sometimes crash and various other devices not work? For many reasons, including the fact that [generation of] old specialists leave and new ones, alas, do not arrive. Well, sometimes new specialists come to work, but not the right ones. The money is not enough, or the conditions are not suitable for them, thus they do not see any prospects for themselves.
"It's clear that under the conditions of students' distribution policy such a specialist will earn as high a salary as set [by the authorities], and don't you dare protest, otherwise you will have to repay for studies from your own pocket.
"In the USSR, young specialists, those who went to work after university under the allocation policy, were usually sorely needed. A metal worker and a lathe operator were paid many times more than a person with a diploma, even a diploma with honors.
"However, the initiative of the State Council of Tatarstan has been criticized. First of all, it's not clear how to distribute the students in conditions of an economy like no other, though [it is] still a market one. And second, there is also targeted recruitment in universities, which provides the state with specialists without any sort of coercion, guaranteed.
"But, as one can see, the desire to 'hold and not let go' hasn't gone anywhere. This proposal is, no doubt, not the first nor will it be the last. Unfortunately, things from our past reappear, if it's the policy of allocating the students, then [it will be] something else."[6]
