As always, there were many supporters and opponents of the new legislative package. The supporters believed that liberalization of the migration legislation provided the migrants with an opportunity to compete relatively free for work places with the local workforce, and such completion could eventually improve the labor productivity. They stressed the main issue – a possible removal of at least a portion of migrants from “the shadow”, some guarantees of human rights protection and a larger transparency of the labor market. To a certain extent, all these targets have been achieved: according to the experts, the number of migrants legitimately employed grew from 10–15 to 30–40%2. The opponents of the new legislation mentioned damping prices on labor that could emerge in separate segments of the labor market A. Arefiev. Russian education for export// Demoscope Weekly. 2010. ¹ 441–442. http://demoscope.ru/ weekly/2010/0441/tema05.php E. V. Tyuryukanova, Zh. A. Zayonchkovskaya. Immigration: the way to escape or the Trojan horse// Russia faces demographic challenges. Report on the development of the human potential in the Russian Federation for 2008. General editor: A. G. Vishnevsky and S. N. Bobylev. M.: 2009. p. 104.
Social Sphere pushing the national workforce out from the labor market, criminality and disease issues, inability of the infrastructure to accept a workforce surplus, increasing conflicts 1.
A review performed by M. Rimmer and P. Dikson for the USA showed that tightening of control and reduction of a flow of low-qualified migrants would make a considerable negative impact on revenues of the US households. A small saving in the government expenditures would be overridden many times by decreasing production volumes and reduction of jobs designed for more qualified US workers. The actions to reduce the number of low-qualified migrants by 28.6% as compared to the “normal” forecasted figures would cut down the aggregate income of the US citizens approximately by 0.5% or by $80 billion. On the contrary, legalization of such migrants would sufficiently increase incomes of the US workers and their family members. As a result, payments to smugglers and middlemen and other costs of the migrants connected with their illegal entry would be removed. Besides, the migrants’ labor efficiency will improve, and new jobs for highly-qualified Americans will be created. In the context of the legalization and introduction of a visa fee, the US GDP might increase by 1.27% (equal to $180 billion).
No such estimates have been made for Russia. The financial and economic crisis that formally broke out late 2008 most likely strengthened the position of the “restrictions” lobby.
However, the attack on the liberal course began even before the crisis2. The liberalization policy has never been accomplished.
For the first turn, this was manifested in the introduction of norms, under efforts of protection of the labor market for the national workforce and unemployment actions during the crisis, according to which foreign citizens having arrived and registered in Russia were entitled to get a work permit for the period up to 90 days, and only after that, having submitted a draft contract with the employer who could earlier (before July 1st of the previous year) receive a quota for his/her company to employ foreign workforce, to renew the employment term in Russia for the period up to 12 months.
There is a lot of obstacles in this business: employers are not interested and for them it is economically inefficient to hire workers for a short period of time; the procedure of dual execution of contracts takes too much time without any compensation for the efforts; finally, the employer must have a quota on the foreign workforce employment. The application for the quota for 2010 should have been made in summer 2009 (the year of crisis). Even with no recession, it is difficult to assess needs in workforce for the next year, while in the time of crisis to do this is much more complicated. Only major and financially stable business entities were able to estimate their needs realistically. Besides, inter-departmental commissions of the subjects of the Russian Federation refused giving quotas to the employers or made various cuts in the quotas.
In December 2008, when the crisis in Russia formally began, the national government elected to transform like a charm the earlier planned 30% reserve of the quota to a 50% reserve (Fig. 11). Practically it meant that the regions would suffer a real cut in their potential employment of foreign workforce. What was developed for 6 months (collection of requests Ex-mayor of Moscow addressing General Council of the Independent Trade Unions of Russia declared that the “migrants are prostitution of the economic system” // V. Kozlov. Right for hardships. News Time. September 23, 2010.
See O. Vykhovanets, S. Gradirovsky, Migration policy of Russia for the last years: summary of results (2007 – 2009). // Network project of the Russian World. Russian Archipelago. http://archipelag.ru/ authors/vykhovanets/library= RUSSIAN ECONOMY IN trends and outlooks from employers) was cut down to 4 weeks 1 – either for the formation of the quota request not so much efforts and time was required (in this case all spring and summer actions had been wrong and ineffective) or the December decision was premature and formalistic.
In spite of the officially announced end of the crisis in 2010, there has been no return to the pre-crisis law enforcement. This situation was reflected in statistical reports on labor migration (Form 1-RD); that year the reports were supplemented with such lines as “work permits for employment of foreign citizens who have come under a visa-free procedure, for the period up to 90 days – issued in total” and the same “….. renewed for up to 1 year”.
There is another example of extra difficulties associated with the quotas” in the Krasnodar Krai, where sports facilities have been built for the Olympics: the employers submitted requests for 70,000 people for 2010, however, “according to the instructions from “above” to make as many cuts as possible, the interdepartmental commission reduced the required number down to 25,000” 2. O. V. Popova, Deputy Head of Labor Migration Section, FMS Division of the Krasnodar Krai, said that “the commission responds favorably to the needs of Olympic organizations by not cutting their requests by two times: e.g. if you ask for two thousand workers to build an Olympic facility, most likely you will get one and a half thousand”3, which means that the quotas of other employers could be cut by two times – now this has become a common practice. Besides, though the second permit is issued in addition to the established quota, a fee must be paid for the second time (RUR 2,000 instead of RUR1,000).
The “quota fight” is reflected in official statistics: for 8 months of 2010, there were 1,cases of refusal to issue work permits for foreign workforce employment while in the similar period of 2009 this figure was 317 only 4.
Regardless of a post-crisis growth of the economy and therefore a potential increase of the demands for labor force, in 2010 the reduction of the number of issued work permits was officially recorded (almost by 20% vs 2009). It means that we are facing either an unprecedented increase of labor productivity which Rosstat has not informed us about5, or the increased use of illegal workforce which strictly speaking should not obligatory include migrants.
Resolution of the RF Government of 07.11.2008, ¹ 835”On the approval for 2009 of the quota for issuance work permits to foreign citizens” (published on 14.11.2008).
Resolution of the RF Government of 08.12.2008, ¹ 916 “On making amendments in the Rules of determination by the executive government authorities of the demand for employment of foreign workforce and the formation of quotas for labor activities exercised by foreign citizens in the Russian Federation”.
Quotas is a painful subject. Presentation by O. Popova at the “round table” discussion “Russian migration policy during a demographic decline”// Russian migration: Information and Analytical Journal. ¹ 4–5 (43–44) September–October 2010. p. 28.
Same. p. 29.
For January - August 2010, 460 work permits for foreign workers employment were cancelled against 25 permits for the respective period of the previous year. Though this is not a big number for the entire country, it is the trend that attracts attention.
According to Rosstat, the labor productivity in the Russian economy from 2005 through 2009 has never increased more than by 7.5%. A greater increase was observed in some sectors. In 2009 vs 2008, the labor productivity in the key sectors with migrants was: in construction – 96.1%, wholesale and retail trade– 92.1%, processing industries -– 96.1% and in the agricultural and forestry sectors only – 105%// Social and economic situation in Russia, 2010, Rosstat, 2010.
Social Sphere 60 2007 2008 2009 Visa-free countries, total visa countries, total Visa-free countries, Moscow visa countries, Moscow Source: Resolution of the RF Government on the approval of quotas for issuance of work permits to foreign citizens (2006, 2007, 2008, 2009); Resolution of the RF Government on the approval of quotas for issuance to foreign citizens of entry invitations to exercise labor activity (2006, 2007, 2008, 2009 ).
Fig. 11. Quotas for issuance to foreign citizens of work permits established by the RF Government and communicated to the subjects of the Russian Federation (no reserve), 2007–For 10 months of 2010, 986.6 thousand of work permit forms were issued against 1,222.thousand for the similar period of 2009 1. Almost all indicators characterizing the internal labor migration decreased: the number of issued permits to free-visa migrants dropped by 24.4%; to visa migrants by 20.4%. The level of notices on the engagement of visa-free foreign workers received from the employers remained almost unchanged: 65% in 2010 against 62.6% in 2009. It is the number of issued work permits to foreign citizens who have permits for temporary residence that grew by 65% vs January through October 2009. However, the number of permits for temporary residence reduced by 1/3. The reasons behind such opposite trends are still unclear. Anyway, the share of foreign workers with the temporary residence status makes not more than 3–5% of all types of permits.
FMS of Russia statistical data. http://www.fms.gov.ru/about/statistics/data/ In thousands of people RUSSIAN ECONOMY IN trends and outlooks If to assume that the number of work permits in November-December 2010 will remain at the level of September – October (mind that in “normal” conditions there must be a reduction in November and especially in December as the labor migrants prefer spending the New Year and the winter months back at home), then for the year the number of the issued work permits will exceed the level of 2006 (1,014 thousand) by 10% - 15% only, being considerably lower vs 2007 (1,717 thousand), the first year when the new migration legislation was effected.
Such comparison is relevant only to a certain extent since the 2010 data refer to the number of issued work permits while the data for the previous period describe “the number of foreign employees engaged in labor activity in the Russian Federation”. Meanwhile, work permit forms can be issued to one and the same migrant one and more than one time during a year.
The indicator of “the number of foreign employees engaged in labor activity in the Russian Federation” estimated by the Federal Migration Service and published by Rosstat is incorrect in terms of statistics as it counts both migrants who arrived in Russia during the year and migrants who have stayed in the country as of the given date 1.
Thus, the data for comparison do not reflect accurately at least the “visible” portion of the external labor migrants, they seem to outline a certain trend which sends us directly to the migration data before the liberalization of the migration legislation i.e. to the period of the “shadow” migration. As for the number of work permits issued to foreign workers (such indicator appeared in the form 1-RD in 2010), this number is lower than the number of issued forms by 25,000.
The quota of 1,944.3 thousand permits approved for 2010 (from them 1,361 thousand were “communicated” down to and distributed among the regions and 583.4 thousand (30%) were reserved) will definitely remain unused. Thus the government authorities were given additional opportunities to sequestrate the quota of 1,745.6 thousand work permits approved for 20112. The number of invitations to foreign employees from visa countries to enter Russia was also reduced (from 611,000 in 2010 to 499,700 in 2011).
The current distribution of migrants by sectors shown on Fig. 12 also demonstrates a “shift to shadow” of the Russian economy: for the last years the employment of migrants in the construction sector did not fall lower than 40% (of the entire labor force) while in two other sectors – construction and trade - at least 60% was engaged. In 2010, in line with the notices from the employers on the employment of foreign workers from visa-free countries, the engagement of migrants both in the construction and the trade sector dropped considerably. We believe this is an artifact: firstly, not all the employers comply with the legislation requirements and submit to the FMS their employment notices for workers from the CIS countries.
Thus, this year the FMS received only 85% notices vs all issued permits to visa-free employees, and this is the highest figure for the entire period of the action of the new legislation.
Secondly, according to the survey data, the employment in the construction and the trade sectors was least subject to documentation even in the best years of the liberalization (Table. 6).
For details, see O. S. Chudinovskih. Migration statistics does know everything. Demoscope Weekly 2008.
No 335–336. http://demoscope.ru/weekly/2008/0335/tema04.php Resolution of the RF Government of 12.11.2010 No 895 “ON definition of the demand in attracting foreign employees to the Russian Federation and approval of the respective quotas for 2011”.