Russia: Education, Personnel and Labor Market
As already during the last years, the inflation target of the government, which was set at ambitious 8%, was missed again in 2007. There was acceleration towards years end to about 12% and also in 2008 this high inflation continues.
The massive increase of the nominal and real salaries continued in 2007, and there were actually 15% higher, nominally about 25% higher salaries until the end of November compared to 2006. After the actual salaries had already increased by 13.4% in 2006, the Russian companies are increasingly feeling the massive increase in personnel costs, which is especially visible in the larger cities like Moscow and St. Petersburg.
The unemployment rate for Russia is currently at 6.1% according to ILO-Standard, but it is spread very different regionally. While there is a massive labor force deficit already now in the larger cities, the unemployment rate in some rural areas continues to be relatively high. From 142 mio. inhabitants, about 74 mio. are at an age able to work. 67.2 mio. of them are employed workers. 48.2% are active in the industry sector, and 51.8% are active in the service sector.
The average wage level is at 330 EUR with an increase rate compared to the previous year amounting to approx. 25%. Still, approx. 22 mio. people are living underneath the minimum wage. The salaries have developed very different branch-specifically and regionally. The highest wages are paid in export-oriented raw material companies, in »oligarchic« holdings, in production-companies for mass goods, and in telecommunication companies. The lowest are found in agriculture, education, and health care. The differences between national and international companies are increasingly disappearing. Moscow and St. Petersburg are 100 to 150% higher than all other regions.
53% of the population are women with a higher level of education; they own 40% of the smaller companies. Only 10% of the top manager positions are filled with women, who earn up to 37% less than men.
The employer's contribution to the legal social insurance, the so-called »social tax«, amounts to 26% of the annual income subject to income tax of the employee with regressive tax rate, decreasing to 2% for annual salaries over RUR 600.000. This means that income parts over currently yearly approx. € 16.600 are only burdened with payroll taxes of 2%. The income tax of employees (withheld by employer or self-declared) is set at 13% flat tax on the entire income (= »world income«), but at 30% for foreigners subject to »limited« tax in Russia (the so-called »183 day-rule« is to be considered here). Regulations for »general« and »individual« timely (meaning prior to employment) procurement of employment authorizations for foreigners need to be strictly adhered to, as also the regulation for limited taxability, timely tax declarations, and tax deduction. It is recommended to employ professional help in advance.
The labor market in Moscow is a special world. Of the 10.4 mio. inhabitants, 6.3 mio. have work, 38% possess higher education at an unemployment rate of only 0.5%(!) 2,500 representatives of foreign companies and more than 7,500 companies with foreign capital contribute to the business life of this city, in which approx. 215,000 job advertisements are posted every week.
The current educational system is based on an 11-year school system with 5-6 year duration for achievement of a university diploma. The tendency to a harmonisation between the Russian and the European educational system is clearly visible: approx. 4,000 students absolve MBA-Programs per year.
